Demographic structure and the security of property rights: The role of development and democracy

Philipp Harms and Philipp an de Meulen

European Journal of Political Economy, 2013, vol. 29, issue C, 73-89

Abstract: It is often argued that countries with a high population share of children and young workers should attract large capital inflows from aging industrialized economies. However, many of these countries deter foreign investors by a high risk of creeping or outright expropriation. In this paper we explore whether the correlation between countries' demographic structure and the perceived security of property rights reflects a causal relationship. We show that, in low-income countries, the ratio of young to old workers has a positive effect on the perceived security of property rights if the political system is sufficiently democratic. By contrast, this relationship cannot be observed in middle income countries.

Keywords: International investment; Political economy; Expropriation risk; Demographics (search for similar items in EconPapers)
JEL-codes: D78 F21 J10 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:29:y:2013:i:c:p:73-89

DOI: 10.1016/j.ejpoleco.2012.08.001

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