property, Peru, South America, mining


Why and how is property created? Through a historical analysis, this paper proposes that property is created not out of ideology, but by chance. Depending on the resources encountered by newcomers, a rising civilization will establish property through a centralized controlling government (a top-down system) or through people’s recognized possession (a bottom-up or Lockean system). In the former, the government will create and allocate property at its own discretion, while in the latter, the government will recognize and provide protection for the property of individuals.

When the Spaniards conquered Peru in the 1528, they found immense amounts of gold and silver. Years later, when the British came to North America, they found ice and empty land. The search for bullion by the empires pushed the Spanish Crown to implement a top-down property regime over its colonies, in order to protect and exclude any third party from its resources. A disappointed British Crown, however, permitted colonizers to maintain more autonomy and to establish a livelihood for themselves in the new land, creating a bottom-up property regime. Out of these fortunes, two distinct societies were born, and with each, values that created long-standing biases. After centuries, these property regimes evolve and yield idiosyncratic social conflicts, causing property systems to decay.

Studying three Peruvian mining projects (Tambo Grande [1999], Conga [2011] and Tia Maria [2015]) canceled due to social conflicts, this paper approaches how an implemented property regime may evolve and decay. Using behavioral law and economics and property theory approaches, this paper proposes to redesign the system and reconcile the parties in conflict by giving rural communities the right to decide about their immediate environment. This paper attempts to provide an analogue for dealing with conflicts in other jurisdictions (such as opposition of the Standing Rock Sioux tribe to the construction of the Dakota Access Pipeline in North Dakota).