Endogenous Growth and Property Rights Over Renewable Resources

We analyze the general-equilibrium e§ects of alternative regimes of access rights over renewable natural resources ñnamely, open access versus full property rights ñon the pace of development when economic growth is endogenously driven by both horizontal and vertical innovations. Resource exhaustion may occur under both regimes but is more likely to arise under open access. Under full property rights, positive resource rents increase expenditures and temporarily accelerate productivity growth, but also yield a higher resource price at least in the short-to-medium run. We characterize analytically the welfare e§ect of a regime switch induced by a failure in property rights enforcement, switching to open access is welfare reducing if the utility gain generated by the initial drop in the resource price is more than o§set by the static and dynamic losses induced by reduced expenditure