Trouble in Paradise? An analysis of Barbuda’s transition from owning land in common to private property rights

Written by Maria Kisker | May 2021 |

I. Introduction

In the 17th century, British slave traders established an extractive economy on Barbuda, purposing the island as a food source for the slaves on the sugar plantations of Antigua (Nicholls, 2001). After the British departed, no private property rights were formed. Instead, norms were established for land to be “owned in common by the people of Barbuda.”[1] The Barbudian Land Act of 2007 codified this arrangement, specifying sections of the island for residential, fishing, and agricultural use. Barbudians were entitled to exclusive rights over several plots and access to communal grazing land. Property was not bought or sold, and leases had to be renewed at least every ten years. Leases for major property development required approval by a majority vote of Barbudians and were restricted to 50 years. Though the island was not considered by economists a true common property regime, but rather a proprietorship, this form of common ownership deviates significantly from private ownership (Ostrom and Hess, 2007).

In September 2017, hurricane Irma decimated the 62-square mile island[2] When hurricane Jose was predicted to strike the island again that month, the government of the twin-island state of ‘Antigua and Barbuda’ used military force to relocate Barbudians to Antigua, the more developed neighboring island.[3],[4] This natural disaster and forced evacuation enabled Prime Minister Gaston Brown to seize the land and insist on the passage of the Barbuda Land (Amendment) Act in January of 2018.[5] This act forced Barbudians to transition from proprietary ownership to private, and the land  was declared “hereby vested in the Governor General on behalf of the Crown.”[6] According to this act, Barbudians must purchase property rights from the government for the land on which they have historically lived in order to obtain full possession and transfer rights. The remaining land may be sold or leased by the government to interested parties willing to pay an additional ten percent of the property’s sale price in government fees, legal fees, and licensing fees.[7] Barbudians have described this as a government land grab because the government stands to gain from land sales, increased tax revenue, and tourism.[8]

This transition provides an opportunity to study the environmental effects of proprietary versus private property ownership. Barbuda’s change to private ownership was not due to poorly functioning proprietary systems, but rather because factors exogenous to the system’s performance. Furthermore, the island of Antigua, with otherwise identical government institutions, provides opportunity for direct comparison. Given the four possibilities for future property management, this paper proposes that Barbuda preserve its ecology by either keeping private property but differentiating its regulatory framework from its neighbor Antigua or reverting to the prior system of proprietary ownership rights.

II. Related Literature

The tragedy of the commons, where actors benefit personally from actions detrimental to the collective, came to the forefront of economic literature through the work of Hardin (1968). Ostrom and Hess (2007) summarize economists’ assumptions of the causes of the inefficiencies of common ownership as stemming from a race to obtain a resource before it is captured by others, high transaction costs incurred from communal owners having to devise their own rules, and low productivity as an increase in individual’s work does not directly yield increased private returns. Lack of property rights, or holding property in common, is “considered by most as prima facie evidence of market failure,” and numerous economists have argued private property rights help solve environmental problems (Libecap (2008), Blewett, (1995)). Contrastingly, some economists claim that even without private property the “tragedy” can be avoided (Dietz, Ostrom, and Stern, 2003). An analysis of history provides conflicting conclusions.

Two well-known property studies are relevant to the Barbudians situation. Some historical events lead to the conclusion that private property rights are necessary, as in the case of Easter Island (Dalton and Coates 2000). Others, like the in the case of the Maasai’s experience, lead one to determine that private property rights can be damaging (Blewett, 1995). In these examples, whether or not natural resources were allocated in such a way that promoted sustainable investment and population size were key determinants of which property regime was, or would have been, the most fruitful.

This paper examines a new example of unconventional property rights in Barbuda, in order to provide an understanding of incentives and inform the debate on the merits of common property versus private property.  Unique to the Barbudian economy is the presence of a direct tool for comparison, the island of Antigua, Barbuda’s neighbor with otherwise identical institutions. Finally, this paper sets the stage for further research to be done on Barbuda’s transition after one of the potential outcomes detailed below has manifested. The events are unfolding in an age where data collection is low cost which can lead to quantitative analysis on island-specific institutions, the effects of living where land was held in common on preferences, and technology’s impact on the point of population equilibrium.

III. Analysis

Incentives in Barbuda, pertaining to both the public and private sector, will likely evolve as changes in property rights reshape the relationship between people and land. Antigua is one of the richest islands in the Caribbean on a per income capita basis (Nicholls, 2001). Its economy is mainly based on trade and tourism, and the growth in these areas is primarily due to private sector foreign investment in the hotel and tourism industries. Because of its shift to private property rights, Barbuda can be expected to experience a dramatic growth in income per capita in the next few years due to increased tourism and the migration of high-income individuals to the idyllic island, just as Antigua experienced when its economy opened up in the 1960’s and 70’s (Nicholls, 2001). Resource exhaustion permeates both islands of the nation; as of 1989, approximately 50 percent of the coral reefs in Antigua and Barbuda were dead (Nicholls, 2001). Without changes to the current model, the influx of tourists expected to result from new development will cause further damage to Barbuda. What remains to be determined is whether, the new system of property rights will incentivize ecological protection, and if so how. Previous work on property rights shows us four possible paths forward.

Scenario 1: Private Property Rights Incentivize Good Stewardship of the Land

Land on the coast is not typically occupied by native Barbudians, who prefer to build inland where they are protected from harsh weather. The coast, however, is prime real estate for luxury hotels and mansions. One possibility is as property appears on the coast, owners will have an incentive to protect it and the financial means to do so. Private property rights may solve the tragedy of the commons for Barbuda, as they might have had they been implemented on Easter Island.

Starting in 400 AD Easter Island was owned in common. Property distribution was highly egalitarian, and consumption was considered the right of every society member (Dalton and Coates, 2000). This strategy proved unsustainable as the forest that supported life had a growth rate far below that of the population. In 1400 AD, the advanced society that crafted the famous heads was replaced by a warring and cannibalistic one, as people fought for resources on an island whose ecology had been exhausted to the point it could not support its population (Dalton and Coates, 2000). Dalton and Coats use statistical modelling to argue that, were Easter Island to have transitioned to private rights, they would have been able to sustain their development.

As globalization allows advances in nutrition and healthcare to become more accessible and travel increases, it is likely Barbuda’s population would have expanded even if the island’s land had not been privatized. If a proprietorship had remained, residents may have been faced with a prisoner’s dilemma; though cooperation when apportioning resources helps the community, individual gains accumulate when one harvests in excess, and personal losses are felt when others exploit resources (Hardin, 1958). Under a private property regime, conservationism would be encouraged because owners can control both today’s level of consumption and future access to the resource. For example, if a hotel’s income is directly tied to the surrounding natural beauty, they have an incentive to protect the coral reefs and keep beaches pristine. Scenario one suggests that property ownership rules would benefit Barbuda. By transitioning, Barbuda is avoiding Easter Island’s fate because property owners will be isincentivi to protect the environment.

Scenario 2: Private Property Rights Incentivize Resource Exploitation

The above hypothetical assumes property owners will be concerned about the sustainability of their investment, yet it ignores common resources. Water, for example, will remain susceptible to the tragedy of the commons. Pollution externalities are difficult to internalize because a rational actor will realize their share of harm incurred from pollution released is less than the cost of purification (Hardin, 1958).  Though the incentive is to maintain one’s own property, exploiting the common resources of clean air and water is not incentivized without a government that sets regulations and makes the price of a violation more costly than savings accrued from not adhering. The exploitation of Antigua’s environment to accommodate tourists, the islands massive debt, and unproductive bureaucracy in place on Antigua, demonstrates such institutions do not exist in the nation. Also, when resources previously controlled by local users are nationalized, state control tends to be less effective if not disastrous (Ostrom and Hess, 2007). Scenario two is that the tourism industry takes off in Barbuda, but governmental regulatory institutions are insufficient to protect the environment from increased human population and consumption, leading to resource exploitation.

Scenarios 3: Restoring Proprietorship Rights leads to Collective Care

There is a possibility that Barbuda will succeed in its legal attempts to challenge the government-imposed change to private property. Already, a case against the construction of an airport on land formerly owned in common has been won on appeal.[9] The prior proprietorship may have created optimal incentives, as in the case of the Masai, so reverting to this arrangement may protect the environment.

When the Masai, a pastoral tribe living in present-day Kenya and Tanzania, were forced by the British to change from their transient common-property-holding way of life to a privatized system, their society crumbled. In the 1890’s, drought and bovine pneumonia devastated the Masais’ cattle herds, prompting the British to impose their cultural notions of private property as an attempted solution.[10] This caused a few Masai to become rich while the majority suffered. The ambiguity of common property had enabled the Maasai to adapt to the uncertainty of weather conditions and graze wherever land was good rather than only in one specific area. The transaction costs induced by forcing there to be explicit transactional arrangements created externalities that were not present when a market was avoided and access to resources regulated by social institutions in a Coasian manner (Blewett, 1995).

Similarly, in Barbuda the switch to private property rights has increased transaction costs.  Native Barbudian, Natalia John, told NPR reporter Sarah Gonzalez that to mark her plot of land, she placed some sand and a stone on it. There was “no paperwork, no lease, no rental agreement, no title.”[11] Everyone benefited from being able to live inland, where building was inexpensive, while still having unfettered access to beaches, which were unoccupied and free for all to use. According to Ostrom and Hess (2007), proprietorships create incentives that promote “long-term investment and harvesting from a resource,” and levels of productivity and investment are not lower than those of private property regimes. Scenario three is that a proprietorship incentivizes collective care of the land and limited tourism infrastructure prevents competition for coastal property, leaving reefs and wetlands healthy. Reverting to a proprietorship will allow for long term economic and environmental stability.

Scenarios 4: Restoring Proprietorship Rights Leads to Resource Exploitation

Ostrom and Hess (2007) have a caveat to their claims about proprietorships: the above is only true in sparsely populated areas. Were Barbuda to be successful in their court challenges and revert to what they called owning land in common, whether this would continue to be an efficient way to allocate resources would be determined by the island’s population. Scenario four is that, even without the private property induced migration, the Barbudian population levels expand to the point where people must compete for resources in the same manner as Easter Island, leading to the tragedy of the commons.

IV. Conclusion

Before the forced change, residents on Barbuda lived under what Ostrom and Hess (2007) would classify as a proprietorship. They had the right to access and withdraw resources, the “collective-choice right of management,” which includes decisions on construction and the ability to determine who had access to the resource (Ostrom and Hess 2007). Anyone could use the beaches or set up a house, a vote determined construction, and non-Barbudians needed permission to use land. According to Ostrom and Hess, arrangements like this promote long term investment in low populated areas, as Barbuda currently is. Given this evidence, the arrangement was likely efficient in the years leading up to the natural disaster. Unfortunately, property is already for sale, making it unlikely Barbuda will revert to its old ways.[12]

Though equilibrium level of consumption and resources are predetermined by island ecology, the path to this equilibrium is dictated by institutions (Coats and Dalton, 2000). These will determine whether the island can develop incentives that avoid the fate of Easter Island, the Masai, and Antigua. Barbuda will either experience economic growth fueled by resource overconsumption, only to be eventually be forced to equilibrium by dramatic natural consequences, or an economic expansion that naturally levels off at the maximum level of sustainable consumption (Coats and Dalton, 2002). The current institutions are insufficient to allow for the preferred latter scenario. ‘Antigua and Barbuda’ has “no central agency for the management of the environmental assets. Legislation pertaining to environmental concerns is dispersed… and existing laws are often not enforced.”[13]

There are three avenues of hope for Barbuda. The first is that Barbuda’s culture will differ from Antigua’s to the extent that Barbuda creates and enforces island-specific institutions. The second possibility is that foreign nationals import institutions that incentivize sustainability. Third, there is the hope that public support of conservationism makes environmentalism lucrative. Though this analysis only presents a limited range of possible futures, the examination of the connection between property rights, resources, and incentives can be applied to places such as Liberia and South Africa who are debating forming common property laws.[14] Regardless of how events unfold in Barbuda, this twin island nation will be an informative case study property rights’ effects on incentives and natural resource use.

[1] “Barbuda Land Act, 2007” (The Government Printing Office, Antigua and Barbuda, 2007).

[2] Linda Pressly, “‘Why I Don’t Want to Own the Land My Business Is Built On,’” BBC News, August 15, 2019, sec. Stories, https://www.bbc.com/news/stories-49210150.

[3] “Episode 969: The Island No One Owns,” NPR.org, accessed February 9, 2020, https://www.npr.org/2020/01/31/801645818/episode-969-the-island-no-one-owns.

[4] “Antigua and Barbuda | History, Geography, & Facts | Britannica,” accessed February 8, 2020, https://www.britannica.com/place/Antigua-and-Barbuda.

[5] Pressly, “‘Why I Don’t Want to Own the Land My Business Is Built On.’”

[6] “Barbuda Land (Amendment) Act 2017” (Government Printing Office, Antigua and Barbuda, 2017), http://laws.gov.ag/wp-content/uploads/2019/03/No.-41-of-2017-BARBUDA-LAND-AMENDMENT-ACT2c-2017-For-Assent-1.pdf.

[7] Marcelle Sussman Fischler, “House Hunting in … Antigua and Barbuda,” The New York Times, July 31, 2019, sec. Real Estate, https://www.nytimes.com/2019/07/31/realestate/house-hunting-in-antigua-and-barbuda.html.

[8] Pressly, “‘Why I Don’t Want to Own the Land My Business Is Built On.’”

[9] “John Mussington et al v Development Control Authority et Al,” Eastern Caribbean Supreme Court, May 22, 2019, /john-mussington-et-al-v-development-control-authority-et-al/.

[10] Robert Blewett, “Property Rights as a Cause of the Tragedy of the Commons: Institutional Change and the Pastoral Maasai of Kenya,” Eastern Economic Journal 21 (Fall 1995): 477–90.

[11] “Episode 969.”

[12] “Property for Sale in Antigua And Barbuda – 115 Properties – A Place in the Sun,” accessed April 18, 2020, https://www.aplaceinthesun.com/property/antigua-and-barbuda.

[13] Nichols, 122.

[14] Liz Wiley, “A Land Rights Storm Brewing in Barbuda?,” Rights + Resources (blog), accessed April 11, 2020, https://rightsandresources.org/en/blog/land-rights-storm-brewing-barbuda/.

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