Externality = violation of a property right = coercion = the opposite of freedom = anchor to underdevelopment

I mean, if somebody is smoking in the park and I'm reading there and I don't like the smoke, such as Coase shows, the externality is not merely a matter of the smoker causing a damage to me (Pigou's naïveté). Damage is not a sufficient condition to have a (negative) externality. If and only if a violation of a property right occurs, have we an externality. The other way of seeing an externality, i. e. the need to internalize, consists precisely in the need to put a stop to such a violation of the property right, to such a coercion. Externalities can be defined only in the context of a register of property rights, since they are precisely violations to such a register. On the other hand, even in a completely internalized society where there would be no externalities at all, we could have damages and benefits perceived by some agents by the actions of other agents. The feature of those damages and benefits, however, would be so, in such a system, that our damaged or benefited agents would no have any right whatsoever over putting a stop to the damages or continue enjoying the benefits happening by the actions of other agents, which we re are assuming to be the proprietors of the things causing damages and profits to other agents in our example.

And linking the concept of coercion to the work of Friedrich Hayek in his "The Constitution of Liberty", in which he defines freedom as "that condition of men in which coercion of some by others is reduced as much as is possible in society" (page 11). This is, freedom is the absence of coercion. Coercion is the opposite of freedom. Whereas there is freedom there's no coercion, whereas there's coercion there's not freedom.

This is important, for instance, to understand the key feature by which we can tell a society in which the development advances at a reasonable pace from one in which that reasonable pace is not present. Anyone who has lived in an underdeveloped (*) country bears witness that externalities are a key feature of those countries either because a property register existing it is violated (corruption, blackmail, theft, and a regrettable etcetera) or because there is not such a register in the first place (on which the work by Hernando de Soto is particularly illustrative).

(*) In order to emphasize backwardness, but euphemistically called sometimes "developing" as if full stagnation would be possible and as trying to convey basically the opposite idea of what really happens in countries composed of mostly poor people under world standards, i. e. almost absence of a developing pace.