Privatized Federal Land Would Yield Better Environmental Quality
Market, not Clinton's desire for a "legacy," should determine ownership of public lands

Included in this year's budget bill was $470 million requested by President Clinton for his "Land Legacy" program that will provide funding to state, local and federal agencies to preserve more open lands. However, current federal landholdings have been pervasively mismanaged from both an economic and an ecological standpoint, according to a study released today by the Cato Institute. Therefore, giving more land-management responsibilities to the government is not a solution—instead, over the next 20 to 40 years, land should be auctioned, not for dollars, but for certificates to be distributed equally to all Americans.

In "How and Why to Privatize Federal Lands," authors Terry L. Anderson of the Political Economy Research Center, Vernon L. Smith of the University of Arizona and Emily Simmons of PERC note that the federal government is already the owner of one-third of all U.S. land. "Analysts on the left and the right agree that the federal government has done an exceedingly poor job of stewarding those resources," they write. "Both environmental quality and economic efficiency would be enhanced by private rather than public ownership."

The authors note that, from an ecological standpoint, the government has done a substandard job: only one-third of wildlife-related action items have been implemented; lands have been seriously overgrazed; at least 39 million acres of forest are at risk for catastrophic wildfires; and the ecosystems of national parks have been destroyed, not preserved. Remarkably, the federal government loses money managing land assets worth billions—in 1996 alone, the Park Service lost more than $1.2 billion, the Forest Service lost $260 million and the Bureau of Land Management lost $41 million, according to the study.

The authors believe that "it is time to get beyond superficial market failure theorems that ignore the role of property rights and intrusions in a market economy." They argue that public land management is rife with conflicting political interests and "creates common property–like incentives to overgraze grassland, overcut some forests (but undercut others), or overcrowd many parks."

Instead of the president's plan for the government to buy up even more land, the authors suggest four criteria to guide land-reform efforts: Land should be allocated to the highest-valued use; transaction costs should be kept to a minimum; there must be broad participation in the divestiture process; and "squatters' rights" should be protected.

"How and Why to Privatize Federal Lands,"