Economic Theory of Infrastructure and Commons Management
- Article: Brett Frischmann, "An Economic Theory of Infrastructure and Commons Management, (89 Minnesota Law Review 4, April 2005)
URL = http://papers.ssrn.com/sol3/papers.cfm?abstract_id=588424;
Brett Frischmann, a professor at Loyola University Chicago School of Law has published an essay that is “a rigorous, clear-headed explanation of the economic and social benefits of commons-based infrastructures".
Description
“The basic problem with relying on markets to allocate access to common assets, Frischmann explains, is that the market mechanism exhibits a bias for outputs that generate observable and appropriable returns at the expense of outputs that generate positive externalities [public benefits that cannot be captured by market players]. This is not surprising because the whole point of relying on property rights and the market is to enable private appropriation and discourage externalities. The problem with relying on the market is that potential positive externalities may remain unrealized if they cannot be easily valued and appropriated by those that produce them, even though society as a whole may be better off if those potential externalities were actually produced. “Positive externalities" are precisely those “goods" that benefit all of us, as commoners – clean air, access to information, an open Internet, functioning ecosystems. Yet neoclassical economics and the laws based on it generally discount or ignore these types of value; they assume that monetized forms of individual property are the only important types of value worth maximizing. By looking at “infrastructure" through the lens of the commons, however, we can begin to appreciate the positive, non-market externalities that a resource actually generates – and begin to design public policies to protect these benefits on their own merits."
More information
- (Commentary from On the Commons blog, at http://onthecommons.org/node/613;
- a bio on the author at http://www.luc.edu/law/faculty/frischmann.shtml)
- Infrastructure Commons in Economic Perspective, First Monday, vol. 12, num. 6 (June 2007) (peer reviewed), at http://firstmonday.org/issues/issue12_6/frischmann/index.html