Reading passage – Questions 14 to 23 (Res nullius and communal property)
Res nullius (Latin for “nobody's property”) refers to assets where no person or organisation holds the legal authority to limit entry, allowing them to be on a first-come, first-served basis. These unrestricted resources have led to an issue known popularly as the exhaustion of communal property.
The complications arising from open-access assets are clearly exemplified by the fate of the American bison. Throughout the early history of North America, bison populations remained abundant; unrestricted access for hunters presented no significant problem. [I] Frontier people requiring hides or meat could easily acquire whatever they needed; the aggressiveness of any single hunter did not negatively affect the time or effort expended by others. When there was no scarcity, efficiency was not threatened by open access.
Over time, however, demand for bison increased and scarcity became a significant concern. As the hunter population expanded, each additional unit of hunting activity increased the time and effort required to produce a specific yield. With multiple hunters sharing nonexclusive property rights to the animals, the resulting allocation proved inefficient. Without exclusive rights, individuals could continue to exploit the resource until profits were driven down to zero. [II]
Why does this occur? Unlimited access destroys the incentive to conserve. An individual hunter who could bar others from hunting a specific stock would have every reason to keep the herd at an efficient level, because the benefits of restraint would return in the form of lower costs and larger yields in the future. An individual hunter exploiting a common resource, on the other hand, has no such incentive: any benefit derived from personal restraint is seized, at least in part, by other hunters. Restraint becomes an act of charity toward strangers. [III]
Two key lessons are drawn. When sufficient demand exists, unrestricted access will lead to the overexploitation of shared resources. [IV] The scarcity rent, representing the value generated specifically by the resource's rarity, is dissipated; since no one appropriates it, the value is lost. In effect, what is owned by everyone is protected by no one; and whatever remains unprotected eventually tends to vanish.
(Adapted from Environmental Economics and Policy)
The complications arising from open-access assets are clearly exemplified by the fate of the American bison. Throughout the early history of North America, bison populations remained abundant; unrestricted access for hunters presented no significant problem. [I] Frontier people requiring hides or meat could easily acquire whatever they needed; the aggressiveness of any single hunter did not negatively affect the time or effort expended by others. When there was no scarcity, efficiency was not threatened by open access.
Over time, however, demand for bison increased and scarcity became a significant concern. As the hunter population expanded, each additional unit of hunting activity increased the time and effort required to produce a specific yield. With multiple hunters sharing nonexclusive property rights to the animals, the resulting allocation proved inefficient. Without exclusive rights, individuals could continue to exploit the resource until profits were driven down to zero. [II]
Why does this occur? Unlimited access destroys the incentive to conserve. An individual hunter who could bar others from hunting a specific stock would have every reason to keep the herd at an efficient level, because the benefits of restraint would return in the form of lower costs and larger yields in the future. An individual hunter exploiting a common resource, on the other hand, has no such incentive: any benefit derived from personal restraint is seized, at least in part, by other hunters. Restraint becomes an act of charity toward strangers. [III]
Two key lessons are drawn. When sufficient demand exists, unrestricted access will lead to the overexploitation of shared resources. [IV] The scarcity rent, representing the value generated specifically by the resource's rarity, is dissipated; since no one appropriates it, the value is lost. In effect, what is owned by everyone is protected by no one; and whatever remains unprotected eventually tends to vanish.
(Adapted from Environmental Economics and Policy)
Đáp án chính thức: D
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