What Have Americans Paid (and Maybe the Rest of the World) for Not Having a Public Property Rights Infrastructure?
The U.S., unlike most developed countries, does not have a public federal or state property rights infrastructure. In a paper written in 2002 titled "What Do Americans Pay for Not Having a Public Land Registration System?" Bengt Kjellson estimated the costs of this weakness in the U.S. economy at $20 billion annually (Kjellson 2002). In the new context of the mortgage crisis in the U.S. and the economic crisis it has triggered worldwide, we can reformulate the question this way: "What have Americans (and maybe the rest of the world) paid for not having a public property rights infrastructure?" In effect, we believe that a good property rights infrastructure could have mitigated the effect of the land market crisis and thereby avoided the loss of many hundreds or even thousands of billion dollars. This paper indicates that the lack of a sound property rights infrastructure in the U.S. has contributed to the collapse of its land market. Of course, this is not the only cause of the mortgage crisis. The negligence of the government to control the banking system and the fact that banks have been too loose in their loan controls is obvious. But in crisis times, good, reliable, and accessible information available on time is of critical importance. When this information is missing or hard to obtain without any guarantee of reliability, the crisis will act as a storm traveling over warm waters to become a hurricane. This is precisely what happened last year in the U.S. In his Inaugural Address, U.S. President Barack Obama said, "Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America" (Obama 2009). So, why not remake America and its land market on more sustainable basis?
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