Insecure Property Rights and Growth: The Roles of Appropriation Costs, Wealth Effects, and Heterogeneity

Ngo Van Long and Gerhard Sorger ()

No CESifo Working Paper No. 1253, CESifo Working Paper Series from CESifo Group Munich

Abstract: We extend the model of insecure property rights by Tornell and Velasco (1992) and Tornell and Lane (1999) by adding three features: (i) extracting the common property asset involves a private appropriation cost, (ii) agents derive utility from wealth as well as from consumption, and (iii) agents can be heterogeneous. We show that both an increase in the appropriation cost and, when appropriation costs vary across agents, an increase in the degree of heterogeneity of these costs reduce the growth rate of the public capital stock. We also show that, in the interior equilibrium, the private asset can have either a lower or a higher money rate of return than the common property asset.

Keywords: corruption; property rights; growth; appropriation cost (search for similar items in EconPapers)
JEL-codes: C73 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino and nep-reg
Date: 2004
View list of references

Downloads: (external link)
http://www.cesifo-group.de/DocCIDL/cesifo1_wp1253.pdf (application/pdf)

Related works:
Journal Article: Insecure property rights and growth: the role of appropriation costs, wealth effects, and heterogeneity (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ces:ceswps:_1253

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich
Address: Poschingerstrasse 5, 81679 Munich
Series data maintained by Julio Saavedra ().