Peter T. Wendel


Newly discovered antiquities are “mixed goods.” They have a physical component (the object itself) and an intangible component (the archeological and historical information associated with the discovery). This dual nature justifies government intervention into the market, not to capture the positive externalities associated with the antiquity, but to minimize the negative externalities associated with the law of finders. When the typical finder excavates an antiquity, its historical and archeological information is severely damaged, if not destroyed. In response to this problem, source countries have enacted state ownership/retention statutes. These laws, however, have their own negative externalities. They create incentives for finders to turn to the black market to secure financial compensation and to destroy the historical and archeological information to make it more difficult to catch them. This raises the issue of which is worse: market failure or government intervention failure? Source countries need to create a stronger incentive for finders to report their finds. In theory, this is easy: Pay the finders more. In practice, this is difficult because source countries tend to be antiquities-rich but revenue-poor. A possible solution is a “possessory estate and future interest approach” to newly discovered antiquities. If the finder reports the find, he receives a transferable term of years and the source country receives the future interest. A transferable term of years creates an incentive for the finder to go public with the find--the finder can profit from his or her discovery. The source country receives ultimate ownership of all newly discovered antiquities at minimal cost (Western museums will be the likely purchasers; they will pay for the cost of creating the incentive). A possessory estate and future interest approach could help end the current feud between source countries and Western museums, two entities that should work together to secure and protect newly discovered antiquities, not waste resources fighting each other.

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