Abstract
Public policy often regards pollution and other measures of poor environmental quality as public bads that result from market failure and require government intervention through regulatory policies and more stringent environmental standards. In this article, the researcher argues that pollution and environmental quality should instead be regarded from a property rights perspective, in which institutions of clearly defined and enforced property rights create incentives that lead to reduced levels of pollution and an overall improvement in environmental quality. Using cross-country data, the researcher examines the relationship between property rights and environmental quality. Environmental quality may be undervalued and underprovided by the market when property rights are not effectively used to coordinate the incentives of individuals. To empirically examine the effect of the structure of property rights across countries on environmental quality, the researcher implements cross-sectional regressions in order to maximize observations due to data limitations. Using average protection against risk of expropriation as the property rights measure, the research shows the impact of property rights on indicators of air quality.