The Economics of Property Rights and Human Rights

Abstract. Human rights and property rights are rights of the person, with the former being numbered among the latter. The property rights school of economics analyzes the impact of maximizing behavior within alternative sets of institutional structures defined in terms of the definition and distribution of property rights. Property rights are tools or parameters, not goals of economic policy in themselves. It is useful to view human rights in the same way. The ‘optimal’ structure of human rights in an exchange economy, like property rights, depends on the nature of market imperfections such as transactions costs. The views of Rawls, Arrow and Sen can be interpreted in the light of this analysis. It makes a tentative case for some communal human rights (aimed at moderating the effects of an unequal ditribution of resources) within a system of private human rights vested in individuals rather than the State. This conclusion depends, however, on the distribution of transactions costs in human rights and the chosen role of human rights as tools of public policy.