The Ability to Exclude and Institutional Change in Property Rights∗

This paper investigates institutional change in property rights. I argue localized knowledge plays a central role in the ability to exclude others from property. This ability makes individual property rights less costly to define and enforce because it encourages an informal property rule of individual exclusion. In order to operationalize this theory, I take advantage of a natural experiment on crop production technologies. Building on this variation, the model maps production technologies to informal property norms: as crop technologies increasingly rely on localized knowledge, norms of exclusion become increasingly individual – that is, members of the same group are more likely to be able to exclude each other. Using a household survey of pineapple, maize and cassava farmers in Ghana, I show pineapple farmers have more individual rights than cassava/maize farmers. Since pineapple farming depends more heavily on localized knowledge than cassava/maize farming, pineapple farmers have a greater ability to exclude and, consequently, are more likely to operate under the informal property rule of individual exclusion, which raises the likelihood that they possess individual rights t