Reconsidering Institutional Change: Property Rights in Northern Spain



For about fifty years, from the turn of the twentieth century until the 1950s, farmers in the region of the Orbigo River in northwestern Spain lifted groundwater for irrigation. Two quite different forms of property rights emerged during this period. In the Orbigo valley, small groups of farmers held the majority of water-lifting devices and groundwater as common property. Water was divided into timeshares and shares were taken in rotation. On a high plain above, farmers held waterlifting devices and groundwater as private property. Why did two different forms of property rights emerge in this place at this time? In addressing this question, a new approach to understanding institutional change is proposed, based on a synthesis of schema theory and the economics of institutions, [institutional change, property rights, schema theory, transaction costs, Spain]