Jump to ContentJump to Main Navigation
The Natural Resources TrapPrivate Investment without Public Commitment$
Users without a subscription are not able to see the full content.

William Hogan and Federico Sturzenegger

Print publication date: 2010

Print ISBN-13: 9780262013796

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262013796.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 01 July 2022

Denying the Temptation to GRAB

Denying the Temptation to GRAB

Chapter:
(p.197) 6 Denying the Temptation to GRAB
Source:
The Natural Resources Trap
Author(s):

Nils Wernerfelt

Richard Zeckhauser

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262013796.003.0009

This chapter is part of the general literature on insecure property rights and their consequences for economic efficiency. The literature points out that there are other modes of expropriation or partial expropriation beyond merely taking over the firm. Sharp rises in taxation play this role, and so do regulations that say labor must be paid far above its competitive wage. In this literature, the tools of modern contract theory have opened the door for analyses of contracts that are optimal given unavoidable expropriation risk should certain conditions arise. Since one of the prime factors promoting expropriation is higher net returns to the government if the asset is in its hands, counter-threats may prevent expropriation in a number of instances. Therefore, the country whose firm has been expropriated can retaliate by blocking assets or imposing trade sanctions or other forms of international pressure.

Keywords:   insecure property rights, economic efficiency, expropriation, partial expropriation, taxation, competitive wage, expropriation risk, counter-threats, trade sanctions, international pressure

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.