The Dilution of Rights as a Stage in the Development of the Institution of Property

The work is devoted to the consideration of two trends in the development of property relations – the trend towards greater specification of individual rights, which is characteristic of the market economy model, and the trend of dilution of rights and incompleteness of obligations that is typical for the network model of relations. For a long time, the prevailing point of view in economic research was that a high certainty of property rights is a necessary condition for the effective development of the economy. The article presents the main arguments of the supporters of this position. At the same time, within the framework of the new institutional theory, the two trends casting doubt on this postulate emerged – the theory of property regimes and the economic theory of contracts. The article justifies that under certain conditions strict certainty of property rights may create some barriers to improving the efficiency of economic interaction. Such ways of organizing economic interaction as cooperation and partnership can be based on a system of implicit expectations, which are a classic example of a fuzzy specification of rights and obligations. The authors note that the dilution of rights is characteristic not only for a stationary state – the determination of rules for accessing resources, the order of its use, and the order of changing both of them. The dynamic perspective of the property problem is no less important – the dilution of obligatory rights associated with contractual relations. In real practice incomplete contracts characterized by a fuzzy specification of mutual rights and obligations are common. Thus, in the modern economy, a fuzzy specification of rights is characteristic of both the static (property rights) and dynamic (obligatory rights) aspects of the distribution of rights and obligations.