Legal change in property law: a case study on the tragedy of Chilean lithium

Purpose This paper aims to examine (i) the impact that Chile’s unique system of property rights over lithium has in limiting the expansion of this industry and (ii) what this reveals about the evolution, limits and design of property systems more generally. Design/methodology/approach The study combines doctrinal analysis of Chile’s constitutional, mining and lithium-specific rules; historical institutional legal analysis of reforms spanning from the 1960s to the present; and conceptual frameworks drawn from contemporary property theory. Findings The main problem of Chile’s property regime over lithium is its lack of “modularity”, that is, of relatively free-standing units that can easily be exploited without interference of third parties’ rights. This results from two distinct anti-commons tragedies involuntarily created by Chile’s proprietary regime over lithium. The first is a “real” anti-commons, arising from the collision between rights over lithium and rights over other physically linked mineral resources. The second is an “apparent” anti-commons, resulting from legal ambiguity as to the legal status of certain lithium reserves generated by the 1980s reforms that are the bedrock of Chile’s modern mining law. Attempts to bypass these problems through “special operation contracts” have added complexity to the system without resolving underlying structural flaws. Originality/value To the best of the authors’ knowledge, this is the first in-depth legal study of the Chilean property regime over lithium that connects its doctrinal structure to broader theoretical debates on the structure and evolution of property law.