Evaluating the Economic Performance of Property Systems

How should the economic performance of property systems be evaluated? Benefit-cost analysis is widely used to evaluate non-market based regulation when prices are not available. Market prices provide better information for property systems, but market prices are not necessarily socially optimal when proper; rights are imperfect. This paper discusses two practical approaches to evaluating the performance of properly systems, one based on an analysis of institutional performance, the other based on measuring incentives. As an illustration, I show how these approaches might be used to evaluate the US patent system.