| Summary: | The article discusses the concept of externalities as one of the key categories of the
economic analysis of property rights. Based on a number of scientific publications by
R. Coase, the author analyzes his approach to solving the problem of externalities,
i. e. conflicts of interest arising from negative externalities during the realization of
property rights. The author considers the essence of the reciprocity principle, which
expresses the bipartite nature of the negative externalities and is directed against the
unilateral understanding of causality and the unambiguous identification of a causer
of harm and a victim. The most common formulation of the Coase’s theorem is articulated.
Its preconditions and main conclusions (about the effectiveness of the resources
allocation and its independence from the original distribution of property rights) are
revealed. The article shows that, according to Coase, when transaction cost is positive,
the internalization of externalities provides for the use of economic efficiency as a key
criterion for assessing legal provisions and judicial decisions. The author formulates
conceptual requirements for the legal system in order to solve the problem of externalities
and efficient use of resources. He concludes that law plays an active role in the
economic sphere and it is mandatory to regulate the distribution of property rights for
the internalization of externalities.
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