The Journal of Economic History


Property Rights and Institutions: Congress and the California Land Act 1851

Karen B. Claya1

a1 Karen B. Clay is Visiting Assistant Professor of Economics, The Heinz School, Carnegie Mellon University, Pittsburgh, PA 15213-3890, and Assistant Professor, Department of Economics, University of Toronto, 150 St. George St., Toronto, Ontario M5S 1A1


Governments frequently establish institutions to govern the transition in property rights when they acquire territory or experience radical changes in political regimes. By examining a specific example—the United States' acquisition of California from Mexico in 1848, this article investigates general questions about these institutions and institutional choice. The article fmds that the specific institution that Congress chose for California best balanced the interests of the federal government, American owners of land grants, and American squatters and settlers. Further, despite the lobbying, litigation, and delay associated with the institution, the institution was more efficient than prior institutions.