Externalities arise when the full costs and benefits of actions are not borne by the actor and, in the absence of governance, self-interested individuals have an incentive to overexploit environmental resources, underprovide public amenities, and underinvest in conservation technology. This dissertation focuses on historical changes to natural resource property institutions and investigates their causes and consequences.

The first chapter presents joint work with Gary Libecap and Dean Lueck, which looks at the relative prevalence of rectangular grids and alternative demarcation systems in agricultural land, and investigates the economic factors that explain this variation. We develop a model and test its implications against data from temperate colonies of the British Empire. Three arrangements were implemented: individualized, idiosyncratic metes and bounds; a centralized, uniform rectangular system; and a centralized, non-uniform demarcation system. We find that centralized systems provide coordination benefits, but adoption is less likely when implementation is slow and controlling settlement is costly. Uniform rectangular demarcation lowers transaction costs, but its rigid structure is costly in rugged terrain.

The second chapter investigates coordinating effects of rectangular grids in cities. In 1811, Manhattan adopted its iconic rectangular street grid, contrasting with the decentralized, haphazard development of Lower Manhattan. The spatial patterns of both systems are largely persistent today and I exploit the spatial discontinuity in land patterns to estimate the effects of the institutional change. Regression estimates provide evidence that grids significantly increase land values and land use density relative to more haphazard demarcation patterns.

The third chapter presents joint work with Claudio Tagliapietra and investigates common management of forests and grazing land by communities in the 18th and 19th-century Italian Alps. While many villages rely on customs to regulate their common property resources, some adopt legal charters, which are then forcefully abolished by Napoleon in the early 19th century. Using archival data, we find that charter villages experience an initial increase in population growth relative to non-charter populations after Napoleon's invasion, followed by a later increase in mortality rates. Combined with historical accounts, this evidence suggests that legal charters were critical for stabilizing communal populations by restraining renewable resource exploitation.