Dean Lueck
Dept. of Agricultural & Research Economics
University of Arizona

Abstract

We examine the economic effects of an important institutional innovation, the systematic demarcation of property boundaries relative to indiscriminate land claiming and bounding. The former results in a uniform grid of rectangular surveys (RS), whereas the latter results in haphazard localized bounding of properties, referred to as metes and bounds (MB). Metes and bounds are used throughout the world. In the U.S. they are found in the original 13 states, Kentucky, and Tennessee, as well as in the Spanish and Mexican land grants in the Southwest. The rectangular survey outlines boundaries in terms of a centrally-controlled grid of square plots. In the US, widespread use was implemented by the Northwest Land Ordinance of 1785, which divided federal government frontier lands into square mile ësectionsí that were further divided into smaller uniform allotments for individual claiming or purchase. We develop an economic framework for examining land demarcation systems, focusing on a comparative analysis of the rectangular survey and metes and bounds. We begin by considering how a decentralized system of land claiming would generate patterns of land holdings that would be unsystematic and depend on natural topography and the characteristics of the claimant population. We then consider how a centralized system generates different ownership patterns and incentives for land use, land markets, investment, and border disputes. The rectangular survey is likely to lead to more market transactions, fewer border disputes, greater investment, higher land values, and more infrastructure investment than metes and bounds. In our initial analysis, we compare two adjacent parts of central Ohio which used the metes and bounds system (the Virginia Military District) and the rectangular survey which was used in the rest of the state. Our primary data include U.S. census manuscripts, court opinions, and various state reports on infrastructure, legal disputes, and productivity. The results indicate that in Ohio the rectangular survey led to fewer legal disputes over land title and land boundaries and led to more transactions in land compared to the metes and bounds system. Our data also suggest that the metes and bounds region of Ohio saw less net economic growth over the history of Ohio because of the comparative limitations of the metes and bounds system.

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