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Date: Friday, April 7, 2017 at 3 p.m.
Room: Saunders 515
Title: Creating Anticommons: Historical Land Privatization and Modern Natural Resource Use
Speaker: Dominic Parker
School: University of Wisconsin
We explain how subdividing the commons to promote efficient use of one resource (agricultural land) inadvertently discourages efficient use of another, larger-scale resource (shale oil). We test for the presence of this ‘anticommons’ problem by exploiting a natural experiment on the Bakken, one of the world's largest oil fields. Before oil was discovered, U.S. land allotment policies created a mosaic of private, tribal, and fragmented ownership to shale on and around the Fort Berthold Indian Reservation. We compare horizontal drilling patterns across over 40,000 parcels on and off the reservation during the 2005 to 2015 fracking boom and bust. We find that subdivision and fragmented ownership delayed and reduced the probability of drilling projects, whereas parcels surrounded by contiguous tribal lands were more quickly and fully exploited. The evidence demonstrates how land privatization can inadvertently impair spatially coordinated resource use and suppress rents that would otherwise accrue from an unanticipated resource boom.