COLE_FINAL_PAGEPROOF2 09/13/00 8:56 AM View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Duke Law Scholarship Repository CLEARING THE AIR: FOUR PROPOSITIONS ABOUT PROPERTY RIGHTS AND ENVIRONMENTAL PROTECTION* DANIEL H. COLE** INTRODUCTION Privatization is sweeping the globe.1 Since the Reagan-Thatcher revolution of the 1980s, governments around the world have been selling off public assets to private owners in order to improve effi- ciency and increase production. Between 1985 and 1994, $468 billion worth of state enterprises were sold off to private investors.2 But pri- vatization so far has been limited to state enterprises. Governments have not, with a few notable and highly controversial exceptions,3 be- * This article combines and elaborates on ideas developed in two previous works: Daniel H. Cole, Property Rights on Environmental Goods, in 1 ENCYCLOPEDIA OF LAW AND ECONOMICS (Boudewijn Bouckaert & Gerrit de Geest eds., forthcoming Sept. 2000); and DANIEL H. COLE, INSTITUTING ENVIRONMENTAL PROTECTION: FROM RED TO GREEN IN POLAND (1998). ** M. Dale Palmer Professor of Law, Indiana University School of Law—Indianapolis. J.S.D., Stanford Law School; J.D., Northwestern School of Law, Lewis & Clark College; A.M., University of Chicago; A.B., Occidental College. Please direct questions or comments to
[email protected]. This article is also available at <http://www.law.duke.edu/journals/10DELPFCole>. 1. The term “privatization,” as used throughout the law and economics literature, encom- passes a wide variety of activities by which some public entity conveys property rights to some private entity or entities—everything from outright giveaways or sales of public lands to the granting of licenses or concessions under which private firms finance, construct, or manage ho- tels, airports, wastewater treatment plants, highways, prisons, and schools.