Citation

Harris E. Econ. Pap. 2008; 27(2): 135-145.

Copyright

(Copyright © 2008, Economic Society of Australia, Publisher John Wiley and Sons)

DOI

10.1111/j.1759-3441.2008.tb01032.x

PMID

unavailable

Abstract

Scholars argue that violence will not occur in the presence of efficient property rights institutions. Empirical evidence from the Riverina district in New South Wales between 1855 and 1870 contradicts this claim. This paper provides a preliminary analysis of evidence to explain this apparent inconsistency. Violence was directed at upstream users who dammed rivers, preventing flow to downstream users. Evidence suggests violence was a form of social control referred to as self-help employed to enforce conventions of fairness. Dams were perceived as unfair because they reduced the distributive equity embodied in the common law of riparian rights that established water-use rules to allocate water between competing users. Violence in the form of dam destruction occurred primarily during drought years and was the preferred over common law remedies because of the lag time between seeking court intervention and obtaining a remedy. Coasean bargaining was not possible because of high transaction costs. The findings suggest that violence may occur in the presence of efficient property rights institutions if actors violate conventions of fairness. Violence may be more likely if property rights themselves embody these conventions.