I picked up my understanding of Coase from Law’s Order.
Coase either needs Leviathan or a well shared and respected view of property rights.
This seems wrong. Even in the example at hand (i.e. the dams), there’s no Leviathan or respected property rights, just a negotiated border, yet we can still apply the Coase method: families pay each other to respect the border. This does require some method of credible precommitment (though iteration can largely substitute for that), and an ability to not “pay” if one family outright invades, but it doesn’t seem to require any property rights other than the ability to hide one’s own money.