By Jody Lipford, Jerry Slice,
and Bruce Yandle
In 1997, the state of South Carolina acquired from Duke Energy Corporation 33,000 acres of undeveloped land known as the Jocassee Gorges. The $54 million property is part of the Blue Ridge Escarpment in the southern Appalachian mountains, an area known for abundant rainfall, spectacular waterfalls, biodiversity, and lack of commercial development.
State acquisition of the Jocassee Gorges was celebrated in many circles. On February 3, 2002, however, less than five years after the transition to public property, the South Carolina Sierra Club included the Jocassee Gorges in its list of “special places”—a list that highlights beautiful but threatened lands. The Sierra Club concluded that poor management by the state’s Department of Natural Resources endangered the preservation of the property.
This paper explores the reasons why government ownership of a large portion of Jocassee Gorges has not met expectations. The paper begins with a description of the spectrum of property rights ownership options and their incentive effects, followed by a history of the Jocassee Gorges ownership.
Public ownership of the Jocassee Gorges property brought with it greater publicity and more voices involved in decision making. The authors hypothesized that public ownership would lead to 1) greater use of the property, 2) more abuse of the property (holding enforcement constant) and 3) conflicts between user groups as they attempt to assert their preferred uses of the property.
The paper reports on their research examining these issues. Through interviews, the authors found evidence of greater use; through records of violations of laws and regulations, they found evidence of abuse (harmful use); and through analysis of responses at a public meeting and survey-based interviews, they found evidence of conflicts between user groups.
The authors conclude by offering three alternatives for better management, each of which would change the incentives facing owners. The authors’ preferred choice would be to adopt an auction approach to determine the use of the property. A board of trustees would establish allowable rights (and constraints) on the property and would then auction the rights to user groups. These groups could use them or retire them. Once allocated, these rights would be transferable.
An alternative proposal would be for the board to issue contracts with users for a specified period of time—with rights transferable under some constraints. The third option would maintain the current management structure but require current managers to finance the use of the Jocassee Gorges property through entry and activity fees.
Jody Lipford is an associate professor of economics and business administration at Presbyterian College, Clinton, South Carolina. He received his B.S. degree from Francis Marion College and his M.A. and Ph.D. from Clemson University. His articles have appeared in such journals as the Journal of Economic Behavior and Organization, Independent Review, and the European Journal of Law and Economics.
Jerry Slice is professor of economics and business administration, as well as department head, at Presbyterian College, Clinton, South Carolina. He has a B.S. degree from Clemson University and an M.S. and Ph.D. from Mississippi State University.
Bruce Yandle is a PERC senior associate and professor of economics emeritus at Clemson University. He has served as chairman of the South Carolina State Board of Economic Advisors, senior economist on the President’s Council on Wage and Price Stability, and executive director of the Federal Trade Commission. Yandle is author or editor of fourteen books, including Environmental Use and the Market, The Political Limits of Environmental Regulation, Regulatory Reform in the Reagan Era, Taking the Environment Seriously, Land Rights: The 1990s’ Property Rights Rebellion, Common Sense and Common Law for the Environment, and The Market Meets the Environment. Yandle received his A.B. degree in economics from Mercer University and his master’s and Ph.D. degrees from Georgia State University.
PERC Research Studies, written by PERC fellows, associates, and colleagues, are designed to give scholars and policy analysts background for understanding today’s environmental policy issues. These studies illustrate PERC’s ongoing commitment to high-quality, policy-relevant research. PERC’s Research Studies are edited by Jane S. Shaw and produced by Dianna Rienhart.