Economic Analysis of the Externality of Property use by Comparative Study of Iranian Law

The discussion of externalities occurs when economic action has an impact on people who had no role in making the decision to do so (outside of the exchange or outside the price mechanism). The optimal solution to the problem of externalities created by the ownership of individuals is one of the topics of economics and law, so that externalities can be considered as a bridge between ownership and the economy. There are two categories of theories in solving the externalities problem. The first group of Pigo supporters believes in the use of public mechanisms and government intervention to control externalities. The main tool used by this group is the tax, which causes problems such as the cost of implementation. But the second group of Coase proponents, who believe in resolving externalities with the help of property rights and the use of bargaining tools, believe that by providing a clear and simple definition of property rights, the cost of externalities can be reduced and thus appealing to the courts. Which of these two theories is optimal in terms of law and economics? In this article, these two categories of theories are examined and the external effect is seen as a problem in the world of law and economics. Finally, the position of the proposed solutions has been studied by analyzing the materials related to ownership and liability in Iranian law.