Modern analysis has yet to describe inefficiency in a world where indivisibilities are present and knowledge is costly to produce. - Harold Demsetz

A relevant notion of efficiency must refer to scarcity and people as they are, not as they could be.

Property rights develop to internalize externalities when the gains of internalization become larger than the cost of internalization. Increased internalization, in the main, results from changes in economic values, changes which stem from the development of new technology and the opening of new markets, changes to which old property rights are poorly attuned [G]iven a community's tastes... [for private versus state ownership], the emergence of new private or state-owned property rights will be in response to changes in technology and relative prices.

The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing "imperfect" institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements.