The ideas in this paper were developed during a visit at the John Fleming Research Centre, Australia National University in December 2008. I am grateful to the John Fleming Research Centre and to the Law Foundation of Ontario for funding. An earlier version of this paper was prepared for a special panel on Hernando de Soto and Mature Market Economies at AALS, January 2009. I benefited from discussions with audiences at the AALS, Queen's/McGill Junior Scholars Forum and a McGill Legal Theory workshop. I am especially grateful to Lee Fennell, Evan Fox-Decent, Amnon Lehavi, Oskar Liivak, Eduardo Peñalver, James Penner, Chris Serkin and Malcolm Thorburn for their careful and insightful comments.

1. De Soto initially studied informal property rights in Peru but has since successfully Pressed his prescription for more formal private property with governments around the world. See de Soto, Hernando, The Other Path: The Economic Answer to Terrorism (New York: Basic Books, 1989)Google Scholar [de Soto, Other Path]; de Soto, Hernando, Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Basic Books, 2000)Google Scholar [de Soto, Mystery]. In fact the wealth-maximizing benefits that de Soto anticipates from formalizing property rights have not always materialized. See Platteau, Jean-Philippe, Institutions, Social Norms and Economic Development (Amsterdam: Harwood Academic, 2000)Google Scholar; Ferguson, Niall, The Ascent of Money: A Financial History of the World (New York: Penguin Press, 2008) at 274–78 Google Scholar (questioning the link between formal title and increased access to credit). Further, there is evidence that, after the initial wave of formalization and privatization, there is often a return to informality. See, e.g., Fitzpatrick, Daniel, “Evolution and Chaos in Property Rights Systems: The Third World Tragedy of Contested Access” (2006) 115 Yale L.J. 996 CrossRefGoogle Scholar; Arruñada, Benito & Garoupa, Nuno, “The Choice of Titling System in Land” (2005) 48 J. L. & Econ. 709 at 710-12.CrossRefGoogle Scholar What was not anticipated by de Soto is the evidence that formalizing title does enhance owners’ security. See Field, Erica “Entitled to Work: Urban Property Rights and Labor Supply in Peru” (2007) 122 Q. J. of Econ. 1561 CrossRefGoogle Scholar (showing how formal title frees women and children from monitoring the household’s assets and so to join the workforce).

2. See infra notes 24-27 and accompanying text.

3. See Heller, Michael A., “The Tragedy of the Anticommons: Property in the Transition from Marx to Markets” (1998) 111 Harv. L. Rev. 621 at 639CrossRefGoogle Scholar [Heller, “Tragedy of the Anticommons”]; Heller, Michael A., “The Boundaries of Private Property” (1999) 108 Yale L.J. 1163 CrossRefGoogle Scholar [Heller, “Boundaries”]; Heller, Michael A., The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives (New York: Basic Books, 2008)Google Scholar [Heller, Gridlock]. Heller attributes the term “anticommons” to Frank Michelman, and was obviously influenced by Michelman’s economic analysis of the anticommons in “Ethics, Economics and the Law of Property.” See Michelman, Frank I., “Ethics, Economics, and the Law of Property” in Roland Pennock, J. & Chapman, John W, eds., NOMOS XXIV: Ethics, Economics, and the Law (New York: New York University Press, 1982) 3 Google Scholar [Michelman, “Ethics, Economics”].

4. I take up a discussion of two of these kinds of hurdles below in Part I.B.

5. Heller’s initial work on the anticommons did more than simply provide a useful shorthand to describe the costs associated with assembling veto-rights. It added a distinct form of ownership to our “property lexicon,” as he calls it. See Heller, Gridlock, supra note 3 at 23-49. See also Munzer, Stephen R, “The Commons and the Anticommons in the Law and Theory of Property” in Golding, Martin P. & Edmundson, William A., eds., The Blackwell Guide to the Philosophy of Law and Legal Theory (Malden, MA: Blackwell, 2005) 148.Google Scholar

6. See Buchanan, James M. & Yoon, Yong J., “Symmetric Tragedies: Commons and Anticommons” (2000) 43 J.L. & Econ. 1 at 11-12CrossRefGoogle Scholar (modern bureaucracies are every bit as tangled in the anti-commons as transitional countries).

7. This is what Heller has called the tragedy of the anticommons. See Heller, “Tragedy of the Anticommons,” supra note 3. Frank Michelman first developed the idea that there are symmetrical tragedies in commons and anticommons in a 1985 address to the AALS Property Panel: “If users in a common must fail to regulate their use activities with due regard to the costs of using a resource, rights-holders in an anti-common must fail, and for the same reasons, to act on applications for use permission with due regard for the costs of idling the resources when permission is denied.” Frank Michelman, “Is the Tragedy of the Common Inevitable?” (1985) [unpublished on file with the author]. I am grateful to Lee Fennell for sharing this document with me.

8. Heller would identify an anticommons even in cases where some uses of the object of property are possible, but where its highest-value use is not. Thus, under-use (rather than non-use) occurs in a typical tragedy of the anticommons. But see footnote 34 and accompanying text on the relationship between an anticommons and under-use and a commons and over-use.

9. I will argue below in Part II that, in emphasizing the highest-value uses of resources as a guide to the proper definition of property rights, Heller’s view of ownership looks very much like a bundle of rights approach constrained by a numerus clausus principle. Heller has criticized the mainstream bundle of rights approach insofar as it sweeps aside the numerus clausus principle and so invites judges to treat low-value use-rights as constitutionally protected property rights. See Heller, “Boundaries,” supra note 3 at 1202-03. See also Penner, J.E., “The Bundle of Rights Picture of Property” (1995) 43 UCLA L. Rev. 711 at 777Google Scholar (criticizing the idea that we have discrete property interests in the various specific uses we can make of a thing).

10. The misapplication of the concept is reflected in the increasingly wide-spread skepticism that an anticommons refers to a form of ownership at all. See AnneFennell, Lee, “Commons, Anticommons, Semicommon” in Ayotte, Kenneth & E. Smith, Henry, eds., Research Handbook on the Economics of Property Law [forthcoming in 2009] at 10 Google Scholar [Fennell, “Commons, Anticommons, Semicommon”] (“The term ‘anticommons’ has since become a shorthand for a broad class of problems requiring the assembly of permissions or entitlements ….”)

11. Katz, Larissa, “Exclusion and Exclusivity in Property Law” (2008) 58 U.T.L.J. 275 at 277-78CrossRefGoogle Scholar [Katz, “Exclusion and Exclusivity”] (“[Ownership, like sovereignty, is an exclusive position that does not depend for its exclusivity on the right to exclude others from the object of the right What it means for ownership to be exclusive is just that owners are in a special position to set the agenda for a resource.”) I distinguish between ownership and property, which includes subordinate interests relating to the use or value of an object, such as an easement or mortgage.

12. See Coase, Ronald’s chapter “The Problem of Social Cost” in Coase, R.H., The Firm, the Market and the Law (Chicago, IL: University of Chicago Press, 1998).Google Scholar For a classic statement of the bundle of rights view, see Grey, Thomas C., “The Disintegration of Property” in Epstein, Richard, ed., Modern Understandings of Liberty and Property (New York: Routledge, 2000) 291.Google Scholar Law and economics has largely followed the legal realist view of property as a bundle of rights. See Merrill, Thomas & Smith, Henry, “What Happened to Property in Law and Economics” (2001) 111 Yale L.J. 357 at 359-60CrossRefGoogle Scholar (describing the influence of the Coasean view that rights ought to follow bargaining costs).

13. A modern locus classicus of the boundary approach is Penner, J.E., The Idea of Property in Law (Oxford: Clarendon Press, 1997).Google Scholar See Katz, “Exclusion and Exclusivity,” supra note 11 at 279-85 (describing the features of a boundary approach).

14. By “object of property,” I mean a resource which is subject to agenda-setting control within our property system. An “object” can be tangible or intangible.

15. The law in many circumstances imputes a default agenda to an owner, e.g., the home is assumed to be a place dedicated to private activities and so not open to the public. See Katz, “Exclusion and Exclusivity,” supra note 11 at 298.

16. For an example of a “true” anticommons in a non-ownership context, see my example of a parliamentary filibuster at page 107 below.

17. By complementary goods, I mean goods which are often most productively used in combination. A good example is pendant paintings, often religious paintings or portraits, which were initially meant to hang side by side. While best viewed together, many fine examples of pendant paintings are now separately owned by different institutions or collectors. See Hand, John Oliver, Prayers and Portraits (New Haven, CT: Yale University Press, 2006) at 9 Google Scholar (describing separation of pendant paintings as secularization obscured the religious significance of certain pairings.)

18. See Heller, Gridlock, supra note 3 at 43 (describing the core of an anticommons problem as: “too many uncoordinated owners or regulators blocking optimal use of a single resource.”) [emphasis added].

19. Heller acknowledges as much at one point in the “Tragedy of the Anticommons.” See Heller, “Tragedy of the Anticommons,” supra note 3 at 639 (“Because multiple parties may hold the same right, almost any use of the storefront requires the agreement of multiple parties.” [emphasis added]).

20. Just as there is an analogy between ownership and sovereignty when it comes to the preservation of authority, so too is political and ownership authority vulnerable to sterilization in a similar way: the existence of multiple, overlapping authorities risks preventing the exercise of authority in both contexts. It makes sense, on my own understanding of ownership in relation to sovereignty, that a political anticommons is analogous to an ownership anticommons. See Katz, “Exclusion and Exclusivity,” supra note 11 at 278.

21. This is a question about the role of government and the value of government intervention even in the absence of clear market failure.

22. See, e.g., Heller, “Tragedy of the Anticommons,” supra note 3 at 644-45, n. 115 (“‘[I]nformals suffer … from the absence of a legal system that guarantees and promotes their economic efficiency— in other words, of good law. … ‘I would place bundling property rights coherently at the same level as de Soto’s examples.”) [emphasis added]. The internal quotation is to de Soto, Other Path, supra note 1 at 158.

23. This projects-driven approach to evaluating regulation would justify now widely recognized instances of under-regulation, such as the failure by the Bush administration to regulate the market in asset-backed securities. The absence of regulatory hurdles in the development of markets in asset-backed securities is a major cause of the current economic crisis. And yet the regulation we now see was required would have contributed to what Heller would call a regulatory anti-commons when seen through the lens of the investment bank’s project of re-bundling mortgages for the purposes of selling them off as collateralized debt obligations. The additional value that investment banks were able to extract from security interests by packaging them as they did could not have been possible had investment banks been subject to anywhere near the kind of regulatory obstacles that banks themselves would have faced had they tried to achieve the same debt to capital ratio. See Ferguson, supra note 1 at 230-82. See also infra note 103 and accompanying text (further explaining the anti-regulatory slant to Heller’s work).

24. See de Soto, Mystery, supra note 1 at 18-28; de Soto, Other Path, supra note 1 at 132-51.

25. See de Soto, Mystery, supra note 1 at 22-27 (figures 2.2, 2.3, 2.4).

26. Ibid. at 22 (figure 2.2 (Philippines)).

27. Ibid. at 22-24 (figure 2.2 (obtaining formal title to land in Philippines); figure 2.3 (obtaining formal rights to build in the desert in Egypt)).

28. See generally Larissa Katz, “Governing Through Owners” [unpublished on file with the author] [Katz, “Governing”].

29. See the sources in note 1 (suggesting that formalization projects have not in fact delivered on their promise).

30. Heller’s work on the anticommons thus aims to do more than simply provide a useful shorthand to describe the costs associated with assembling veto-rights. He aims to add another concept to our property lexicon, as he calls it, by explaining how private property is bounded by commons on one side and anticommons on the other. See Heller, “Boundaries,” supra note 3 at 1166-67 (setting out the boundaries between different forms of ownership and completing the spectrum by adding the “anticommons”); Heller, Gridlock, supra note 3 at 37; Munzer, supra note 5 at 153-54 (discussing Heller’s contributions to property theory).

31. For an example of a political anticommons, see Fitzpatrick, supra note 1 at 1002-03 (describing the “property rights failures”—the failure of any one system of private property to emerge—where more than one level of government or more than one source of authority has the power to define property rights).

32. See Ellickson, Robert, “Property in Land” (1993) 102 Yale L.J. 1315 at 1330CrossRefGoogle Scholar, n. 56 [Ellickson, “Property in Land”] (describing hold-out problems in “bilateral monopolies”). Note that Heller treats these as anticommons problems too. Heller, “Tragedy of the Anticommons,” supra note 3 at 669 (an anticommons exists even when “a few actors have rights of exclusion in a resource that each wants to use.”). See also Heller, “Boundaries,” supra note 3 at 1187, n. 122 (“[a]s few as two regulatory bodies may create this type of problem when they resist coordination.”). See also Heller, Michael A., “Critical Approaches to Property Institutions” (2000) 79 Or. L. Rev. 417 at 424Google Scholar [Heller, “Critical Approaches”].

33. The anticommons looks a lot like a “negative community,” in which everyone in a state of nature has a veto power that must be extinguished before anyone can proceed The commons, to complete the analogy, is like Pufendorf’s “positive community,” in which the starting point is a use-privilege. See Schlatter, Richard, Private Property: The History of an Idea (London: Allen & Unwin, 1951) at 128.Google Scholar

34. Lee Fennell, Anne, “Common Interest Tragedies” (2004) 98 Nw U.L. Rev. 907 at 936-40Google Scholar [Fennell, “Common Interest Tragedies”].

35. Ibid. See also Fennell, “Commons, Anticommons, Semicommon,” supra note 10 at 11-12 (arguing that an anticommons problem is an assembly problem “nothing more and nothing less”). The quotation is to Fennell, “Commons, Anticommons, Semicommon,” supra note 10 at 11.

36. Katz, “Exclusion and Exclusivity,” supra note 11 at 311-15 (discussing the relationship between autonomy and property).

37. Not all hold-outs create inefficient or even socially undesirable results. See Fennell, “Common Interest Tragedies,” supra note 34 at 941 (discussing the distinction between “efficient” outcomes, where the subjective preferences of the owner prompt the hold-out, rather than an attempt to capture a greater share of the surplus wealth created by assembling veto rights, and distributionally unsatisfactory results).

38. See Ellickson, “Property in Land,” supra note 32 at 1330 (referring to the “consensus position that transaction costs tend to increase with the number of individuals involved …”).

39. This example was inspired by Baroness Deech’s lecture at the John Fleming Centre for the Advancement of Legal Research at the Australian National University. Deech, Baroness Ruth, “Modernising Reproduction” (December 11, 2008)Google Scholar [unpublished lecture].

40. This distinction is lost in the Moscow storefront case: Heller treats as “owners” agencies with the regulatory power to block a particular sale for public reasons, without however the right to sell, and the regulatory power to set prices, which influences a decision to sell by a person with the authority to do so. Heller, “Tragedy of the Anticommons,” supra note 3 at 638 (figure).

41. See Fennell, “Common Interest Tragedies,” supra note 34.

42. See, e.g., Rose, Carol, “The Several Futures of Property: Of Cyberspace and Folktales, Emissions Trades and Ecosystems” (1998) 83 Minn. L. Rev. 129 at 155Google Scholar (distinguishing between open-access and limited access commons).

43. See infra note 46 (describing the business of ownership as the setting of agenda. Owners are in charge of determining the character of a resource, its purpose in the world.). Shared agenda-setting authority usually emerges in situations where each owner owns an undivided share of the whole and so is entitled to participate either equally or in proportion to her share to the management of the resource. On this view, the co-ownership of farms that Heller describes does not create an anticommons but rather a commons.

44. See, e.g., Ostrom, Elinor, Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge: Cambridge University Press, 2005) at 71–76.Google Scholar

45. Joint-tenancies and tenancies-in-common are “mixed” property: commons with respect to use and enjoyment but exhibit anticommons problems with respect to disposition or transactions that affect title: co-owners are effectively prevented from disposing of or mortgaging their share without the consent of others. It was to respond to the costs of assembling concurrently owned shares in property that the English in 1925 introduced several changes into the law of real property that converted concurrent interests in land into interests in the proceeds from the sale of land. Whereas before January 1, 1926, there could be an unlimited number of tenants in common whose consent had to be obtained for a sale or mortgage, after that date, there could be a maximum of 4 joint tenants with legal title, holding on trust for sale for any number of beneficiaries. This limited the number of people at the bargaining table. The equitable owners who could be safely ignored by third parties because the interest of equitable owners was now only an interest in the share of any proceeds of sale. This innovation was limited in the more recent wave of land reform legislation of 1996. In recognition of the use-value, rather than just the exchange-value, of property, equitable owners have once again been accorded a say in any decision to alienate the land in English law. See Hon, The Rt.. Megarry, Sir Robert & Wade, Sir William, The Law of Real Property, 7th ed. (London: Sweet & Maxwell, 2008) at 115–45.Google Scholar I am grateful to James Penner for Pressing me to make this point explicit.

46. Agenda-setting authority, which I argue is the essence of ownership, is thus distinct from use-rights that, on a bundle of rights approach, are allocated case-by-case to reflect a balancing of interests and values.

47. See La Forest, AnneWarner, Anger & Honsberger Law of Real Property, 3rd ed. (Aurora, ON: Canada Law Book, 2006) vol. 1 at 14–12, 14-36Google Scholar (overview of the law of ouster).

48. The law of waste limits the changes that co-owners can make to the physical character of the land See Ziff, Bruce Principles of Property Law, 4th ed. (Toronto, ON: Thomson Carswell, 2006) at 165, 329 at 165Google Scholar (rules prohibiting voluntary waste “prevent the over-cultivation of timber estates, the destruction of buildings, the opening of new mines, and other conduct that will diminish the property in the long run.”) and at 329 (applying principles of voluntary and equitable waste to co-owners.) See Purdy, Jedediah, “The American Transformation of Waste Doctrine: A Pluralist Interpretation” (2006) 91 Cornell L. Rev. 653.Google Scholar

49. See supra note 47 and accompanying text (describing the effect of rules prohibiting ouster on the ability of members in a commons to preempt the agenda-setting process).

50. See, e.g., Ellickson, Robert C. & Been, Vicky, Land Use Controls, 3rd ed. (New York: Aspen, 2005) at 582–606 Google Scholar (discussing the residential community association). See also Ostrom, supra note 44 and accompanying text (discussing governing bodies for Spanish irrigation systems).

51. Of course it requires some further analysis to determine the kinds of property rights that confer agenda-setting authority. Although there is a concept of ownership in law, it is rarely explicitly invoked in statutes or cases. See Harris, J.W., Property and Justice (Oxford: Clarendon Press, 1996) at 68–72 Google Scholar (explaining much of property law addresses transactional or conveyancing problems and so we do not get many cases that focus squarely on the concept of ownership).

52. This is in keeping with Frank Michelman’s original articulation of the idea of the anticommons. Michelman pointed out that the use of a resource in an anticommons requires “near-simultaneous unanimous consent.” See Michelman, “Ethics, Economics,” supra note 3 at 6.

53. Put this way, the paradoxical nature of an anticommons, and indeed its incoherence, emerges much more clearly. See Heller, “Tragedy of the Anticommons,” supra note 3 at 644-45, n. 115 (referring to “bundling property rights coherently” [emphasis added] in contrast to the fragmentation of rights in an anticommons).

54. One difference between this articulation of the anticommons and Frank Michelman’s description of a regulatory regime in “Ethics, Economics and Property Law” is that it assumes as a starting point that all members have agenda-setting authority, which in turn generates a right that others abstain from using without their consent. The rule that constitutes a regulatory regime, according to Michelman, is just the right that “each of the others shall leave the covered objects alone except insofar as authorization is obtained.” Michelman, “Ethics, Economics,” supra note 3 at 6. The purely negative articulation that Michelman offers does not make sense as a form of property: through property rights, the law ensures that someone has agenda-setting authority over objects. The trouble of course in an anticommons is that too many people do.

55. Much as the conservationist and not the developer, enjoys a strategic advantage in an anticom-mons. Bell, Abraham & Parchomovsky, Gideon, “Of Property and Anti-Property” (2003) 102 Mich L. Rev. 1 CrossRefGoogle Scholar; Heller, “Tragedy of the Anticommons,” supra note 3 at 673 (strategic uses of anti-commons). In fact, the conservationist’s advantage is only possible where there is a true anti-commons and so where others are not able to set an agenda without her permission. This is not the case where there is no anticommons but separately owned parcels that the conservationist wants to assemble into a larger tract. In such a case of complementary resources, a failure to cooperate can foil the conservationist’s ends. This is another ground for distinguishing between a true anticommons that impedes the exercise of authority and the assembly problems that can foil an owner’s desired ends. I am grateful to Lee Fennell for Pressing me on this point.

56. Jedediah Purdy describes most “informal” property rights as possessory rights. See Purdy, Jedediah, “A Freedom-Promoting Approach to Property: A Renewed Tradition for New Debates” (2005) 72 U. Chicago L. Rev. 1237 at 1287.Google Scholar

57. See Ellickson, Robert C., Order Without Law: How Neighbors Settle Disputes (Cambridge, MA: Harvard University Press, 1991) at 126–27 Google Scholar (describing different systems of social control, with third party control provided by a state, an informal organization or social norms).

58. This is an acronym for “Build Absolutely Nothing Anywhere Near Anyone.” See Heller, Gridlock, supra note 3 at 131.

59. Others have questioned on different grounds whether this should be the canonical example of the phenomenon while others have endorsed it (for instance, Munzer, supra note 5).

60. Heller, “Tragedy of the Anticommons,” supra note 3 at 635-36, n. 77 (describing the informal but real influence of the bureau responsible for keeping track of physical and technical specifications of buildings and of the committee for the preservation of architectural and historical monuments).

61. Ibid. at 624-25, n. 13 (quoting Andrei Shleifer).

62. Ibid. at 634 (quoting Moscow Times).

63. De Soto, Mystery, supra note 1 at 20.

64. Or in this case contribute to the formation of an anticommons. The multiple private owners of storefronts in Moscow form an ownership anticommons with or without the regulatory overlay.

65. Heller for instance quotes Richard Epstein: “[Twenty] or more agencies … are given the power to veto new construction on grounds such as environmental protection, antigrowth or sewage. In principle these permits do not allow the regulator to hold out as if he were a private owner of some portion of the resource, but the ability to force zoning officials to behave … is … trick[y].” See Heller, Gridlock, supra note 3 at 132.

66. I argue elsewhere that there is a principle of abuse of right in common law property systems that regulates an owner’s reasons: an owner must actually act on the basis of what she subjectively determines is a worthwhile use of an asset and not just in order to cause harm, either as an end in itself or as leverage. See Larissa Katz, “A Jurisdictional Principle of Abuse of Right,” 2009 SSRN, online: Social Science Research Network http://ssrn.com/abstract=1417955 [Katz, “Abuse of Right”].

67. See, e.g., Waldron, Jeremy, “The Rule of Law in Contemporary Liberal Theory” (1989) 2 Ratio Juris 79 at 88.CrossRefGoogle Scholar

68. See Katz, “Abuse of Right,” supra note 66.

69. Katz, “Exclusion and Exclusivity,” supra note 11 at 293. Ownership and sovereignty or private and public authority are analogous but not identical. Both are preserved as supreme but not absolute positions through a system of rules that ensure the deference of others. The distinction between public and private authority over land, although long under attack by legal realists, is well-entrenched in the common law tradition. See London County Council v. Allen and Others (1914), 3 KB. 642 Google ScholarPubMed (C.A.) (distinguishing the Council’s power to control land from a property interest in land).

70. See Katz, “Abuse of Right,” supra note 66. I am grateful to Evan Fox-Decent for pushing me on this point.

71. Harrison v. Carswell, [1976] 2 S.C.R. 200 Google Scholar, 62 D.L.R. (3d) 68; PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980).Google Scholar

72. See Katz, “Exclusion and Exclusivity,” supra note 11 at 315.

73. Becker, Lawrence, “The Moral Basis of Property Rights” in Roland Pennock, J. & Chapman, John W., eds., NOMOS XXII: Property (New York: New York University Press, 1980) 187 at 206Google Scholar (“In Europe, as late as Grotius, one finds reference to an analogous principle of ‘innocent use’ with respect to land. (The origin and scope of the principle is somewhat obscure, but it seems to have come down from archaic law and to have prohibited owners from taking legal action against trespassers as long as they were in no way interfering with the owners’ use of the land.).”). In common law systems, owners are usually only protected with a liability rule or a right to the fair market value of the use in cases where it turns out that a use is consistent with the owner’s agenda (rather than property rule protection, which in some cases would require punitive damages. See, e.g., Jacque v. Steenburg Homes, Inc., 563 N.W. 2d 154 (Wis. 1997).Google Scholar See Katz, “Abuse of Right,” supra note 66 at 10-11 (citing crane cases). See Penarth Dock Engineering Co. v. Pounds (1963), 1 Lloyd’s Rep. 359 Google Scholar (Q.B.) (requiring owner of pontoon to pay fair market value for unauthorized use of dock).

74. Heller, “Tragedy of the Anticommons,” supra note 3 at 637.

75. In other respects, the Moscow storefront case remains a good example of an anticommons. To the extent that multiple owners in fact wield the “same” right, they may well find themselves locked in a limited anticommons with respect to the kinds of decisions or uses that the particular right controls. Heller, ibid. at 639 (acknowledging that an anticommons requires that multiple owners have the same right If there are multiple owners who in fact all have the same right to sell the property (rather than a regulator’s power to approve or to veto certain sale, which is not the same as the right to sell, or leverage over the sale because of power to regulate pricing, etc.), then we have the indicia of an anticommons).

76. De Soto’s analysis in Other Path, supra note 1, may lack any further overarching conceptual point But it does have one clear advantage over applying the concept of an anticommons to explain what about the relationship between people and public authorities that drives them informal. De Soto’s cost-based approach has the virtue of being open-ended with respect to the kinds of regulation that it draws into the analysis. By contrast the concept of a vertical anticommons draws certain kinds of regulatory costs into the centre of the discussion and marginalizes others which, from the perspective of the owner contribute to the overall costs of formality, e.g., regulatory hurdles at the end of which regulators are bound to say yes, such as building codes; informational obligations, including filing requirements and so on.

77. Heller, “Tragedy of the Anticommons,” supra note 3 at 651; Heller, Gridlock, supra note 3 at 6-9 (discussing assembly problems in spatial “anticommons”), 43 (discussing problems with separately owned complements).

78. Heller, Gridlock, supra note 3 at 131.

79. Heller, Michael A. & Eisenberg, Rebecca S., “Can Patents Deter Innovation? The Anticommons in Biomedical Research” (1998) 280 Sci. 698.CrossRefGoogle ScholarPubMed

80. Even if we posit a very tight relationship between liberty and ownership, a person can be free even if she lacks the inputs to successfully achieve all of her ends. Freedom requires just that she be left in charge of her means. See Katz, “Exclusion and Exclusivity,” supra note 11 at 313, citing Ripstein, Arthur, “Beyond the Harm Principle” (2006) 34 Phil. & Pub. Aff. 215 at 216.CrossRefGoogle Scholar

81. Whether or not the anticommons turns tragic will indeed depend on the project. Tragedy is avoided only where the owners in an anticommons all ratify a particular agenda, and presumably a decision to get on board or to hold out will turn on the desirability of the project.

82. See supra note 54 and accompanying text. Because of reciprocal claims of authority and obligations of deference, no one can get on with the business of ownership in an anticommons without ratification of their agenda by others.

83. See Ellickson, “Property in Land” supra note 32 at 1331 (“practitioners of transaction-cost economics stress avoidance of ‘excessive dependence of coordination on large-number transactions.’”), citing Michelman, “Ethics, Economics,” supra note 3 at 20.

84. See discussion supra note 80 and accompanying text, on the importance to the integrity of ownership of protecting means but not ends.

85. See Heller, Gridlock, supra note 3 at 26. See also Ellickson, “Property in Land,” supra note 32 at 1354.

86. See Ellickson, “Property in Land,” supra note 32 at 1330 (describing the consensus view that transaction costs rise as more people are involved in a project). See Fennell, “Common Interest Tragedies,” supra note 34 at 928-29 (hold-out problems are often treated as a class of transaction cost).

87. While de Soto is very attentive to what Heller calls gridlock in the regulatory sphere, he does not seem resistant to what Heller might identify as “ownership” gridlock. On the contrary, his famous exhortation to listen to barking dogs in formalizing title acknowledges the value of a diffuse distribution of land among many small landowners. De Soto, Mystery, supra note 1 at 178. What this points to is the importance of a full normative framework for evaluating when diffuse holdings are appropriate.

88. The distributional claim of gridlock in this context follows from the insight that transaction costs are higher the more people are involved in a project. See Ellickson, “Property in Land,” supra note 32 at 1330 (referring to the “consensus position that transaction costs tend to increase with the number of individuals involved …”).

89. The use of the anticommons in this context looks like an upfront application of Epstein’s single owner test. See Epstein, Richard, “Holdouts, Externalities, and the Single Owner: One More Salute to Ronald Coase” (1993) 36 J.L. & Econ. 553 at 557CrossRefGoogle Scholar (“Where resources are under the command of two or more persons, they seek to create that legal arrangement that induces all the parties to behave in the same fashion as would a single owner who owned all the relevant resources.”).

90. See Ellickson, “Property in Land,” supra note 32 at 1330-31 (reducing the number of people).

91. See Heller, “Tragedy of the Anticommons,” supra note 3 at 644-47, citing de Soto, Other Path, supra note 1 at 158 (good law is “efficient law”).

92. In fact Heller simply cites to de Soto on this. Ibid.

93. This brings Heller quite close to libertarians like Richard Epstein who suggest that the object of the law is to develop a set of rules that promotes the closest possible approximation to the world of zero transactions costs. See Epstein, supra note 89 at 566. Heller’s point, that once fragmented property rights are difficult to reassemble, is similar to Richard Epstein’s caveat about correction costs: “The rules of individual ownership therefore should be, and largely are, organized in a fashion that minimizes these correction costs. The usual articulation of the common-law rules—that ownership entails with it possession, use, and disposition—is an effort to overcome the problem of subsequent transactions costs by giving a single person the control over all relevant aspects of a single thing” (ibid. at 562).

94. There is some irony in this because Heller has been very critical of a bundle of rights approach on the grounds that it propertizes fragments. See Heller, “Boundaries,” supra note 3 at 1165-66. See also Heller, Michael A., “Property Rights: A View from the Trenches” (1994) 19 Yale J. Int’l. L. 203 Google Scholar; Heller, “Critical Approaches,” supra note 32 at 431.

95. Merrill & Smith, supra note 12 at 380-81 (describing commitment to a bundle of rights approach in law and economics and arguing that efficiency is better served by a boundary approach, given information costs). See Fitzpatrick, supra note 1 at 1006 (Coase’s treatment of a transaction-cost free world reminds us how important transaction costs are in our world); Alchian, Armen A. & Demsetz, Harold, “Production, Information Costs, and Economic Organization” (1972) 62 Am. Econ. Rev. 777 at 783Google Scholar (“Coase’s penetrating insight is to make more of the fact that markets do not operate costlessly” in explaining institutions). See also Williamson, Oliver, “The New Institutional Economics: Taking Stock, Looking Ahead” (2000) 38 J. of Econ. Lit. 595 at 598CrossRefGoogle Scholar (first-order choices [e.g. system of property rights] are “unarguably important to the economic productivity of an economy”).

96. Katz, “Exclusion and Exclusivity,” supra note 11 at 275-76.

97. Heller, “Boundaries,” supra note 3 at 1205-06 (arguing against constitutionally protecting these fragments as “private property” because of potential anticommons problems).

98. The term gridlock is much more prominent in Heller’s newest work, The Gridlock Economy, supra note 3. This is not surprising and is quite appropriate. Furthermore, projects, not rights, are gridlocked

99. See Michelman, “Ethics, Economics,” supra note 3 (distinguishing between ad hoc efficiency and market facilitation).

100. See Dagan, Hanoch, “The Craft of Property” (2003) 91 Cal. L. Rev. 1517 at 1519.CrossRefGoogle Scholar Dagan imports a fuller pluralistic notion of value right into the analysis of how best to “bundle” use rights. See also Alexander, Gregory S., “The Social-Obligation Norm in American Property Law” (2009) 94 Cornell L. Rev. 745 Google Scholar and Peñalver, Eduardo M., “Land Virtues” (2009) 94 Cornell L. Rev. 821.Google Scholar

101. Of course in practice, it might be that there is a highest value user of regulatory authority. Lee Fennell points out (in correspondence with the author) that regulatory decisions may well be the product of negotiations among regulators, who seek to capture the surplus of political capital created by a regulatory decision. To draw out the analogy, the highest-value user, in this context, would be the regulatory body that stands to gain the most political capital from a particular regulatory move. Whether or not this is a realistic description of the incentives that regulators have, such an understanding of “highest-value use” does not carry the same normative punch that the concept has when we are referring to the highest-value uses of owners. This is because no one, to my knowledge, suggests that political capital is itself valuable (whereas wealth-generating transactions arguably are).

102. Heller seems to recognize that he needs a notion of good or bad law but then circles back and cites de Soto: good law is cost-effective. See Heller, “Tragedy of the Anticommons,” supra note 3 at 644-45.

103. The existence of an anticommons, on this approach, is assessed from the perspective of the highest valued use, whether we are talking about the conservationist’s project to get a historic designation for a building or a developer’s building project. The more regulatory hurdles in the way of that project, the more likely that regulatory thicket is to be classed as an anticommons. This gives Heller’s work on the anticommons an anti-regulatory slant, although not necessarily a pro-development slant (however in most of his examples he does indeed take the perspective of the active or intensive user of land).

104. See Stewart, Richard, “Regulation in a Liberal State: The Role of Non-Commodity Values” (1983) 92 Yale L.J. 1537 at 1566.CrossRefGoogle Scholar

105. For example, giving residents a say in the kinds of projects that can go ahead might prevent backlash against otherwise efficient uses. See Roe, Mark J., (1998) “Backlash” 98 Colum. L. Rev. 217 at 220-21.CrossRefGoogle Scholar Of course, a more broadly democratic process may also have intrinsic value.

106. De Soto, Mystery, supra note 1 at 178 (recommending listening to the “barking dogs” to discern who owns what as a guide to formalizing property).

107. Ibid. at 33 (individual holdings are low-value: “Many of these dwellings are not worth much by Western standards.”). On the small scale of informal holdings, see, e.g., Mitullah, Winnie V & Kibwana, Kivutha, “The Tale of Two Cities: Policy, Law and Illegal Settlements in Kenya” in Fernandes, E. & Varley, A., eds., Illegal Cities: Law and Urban Change in Developing Countries (London: Zed Books, 1998) 191 at 202Google Scholar (reporting that over 1000 hectares of Nairobi’s land is held informally. In informal settlements there is an average of 250 dwellings and 750 persons per hectare. In contrast, in middle and upper income neighbourhoods the population density is between 10-30 units and 50-180 persons per hectare. Assuming all land in the hectare was used for housing, the average informal dwelling unit size would be just 40m². In contrast, the average size of a formal unit would be at least 120m²—three times the size.). Similarly, a study of rural property rights in Ecuador indicates that the lot size in invaded communities was “considerably” smaller than in formal settlements. See Lanjouw, Jean O. & Levy, Philip I., “Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador” (2002) 112 Econ. J. 986 at 993CrossRefGoogle Scholar (formal purchasers had an average lot size of 255.7m² while untitled squatters’ average lot size was 137.1m²).

108. See de Soto, Mystery, supra note 1 at 178-87 (advocating respect for existing extralegal norms that govern resources).

109. See Stewart, supra note 104.