Giang Le MAJ Philip Baca Economics November 22, 2013 Privatizing rhinos and new approach to economic development

Key Quote The combined effect of market pricing through auctions and the creation of stronger property rights over rhinos changed the incentives of private ranchers. (pg. 4 -5) Economic Context This article is written by Michael T Sas-Rolfes, an environmental economist with a focus on the role of markets for biodiversity conservation and a 2011 PERC Lone Mountain Fellow researching international wildlife trade policy. The problem discussed is a macroeconomics issue because it deals with the decision-making of an economy as a whole. It relates to how prices of rhinos provide incentives to private ranchers (Standard 8), and the economic role of government in environmental concerns and property rights (Standard 16). Thesis South Africans government has adopted successful methods to protect African rhinos by embracing the auction system and creating strong private property rights over rhinos. Evidence to Support Thesis: 1. A long waiting list of private owners was eager to acquire rhinos for trophy hunting, but they showed little interest in breeding them. When the rhinos had been treated by law as unowned property, there was no incentive for landowners and it was even risky to breed rhinos because they would receive no compensation from lost or killed rhinos, though they had to pay for the rhinos at first. 2. It now made sense to breed rhinos rather than shoot them as soon as they were received. After the Theft of Game Act was activated, landowners realized the benefits that privately owned rhinos brought when the sale prices were increasing, and such benefits outweighted what they had received from killing, capturing or domesticating wild rhinos. This Act made a significant change in the rhino market as well as rhino population. 3. Through institutions such as CITES, they continue to pursue a command-and-control approach that depends on regulations or bans to restrict wildlife use. Failing to learn from South Africans market success, many international countries still apply their conservative and strict policies into protecting environment. This inefficient approach gives more negative incentives for the black market to develop. Conclusion Privatizing rhinos is a new approach to protect African rhinos population and encourage market force yet it is efficient by providing the right incentives to the landowners. Thesis Statement South Americas market success story promises a new method for the government to control and direct peoples behaviors towards what is right. Economic Significance In the modern complicated economy, the government should be flexible and innovative in making decisions so as to achieve desired results.