Property rights revisited

Bazoumana Ouattara and Samuel Standaert

European Journal of Political Economy, 2020, vol. 64, issue C

Abstract: Over the last 20 years, a large number of papers have tried to quantify the effect of property rights on a wide range of variables like growth, trade and to a lesser extent, inequality. However, these studies have been inherently limited by measures of the security of property rights that are currently available. These suffer from any of a number of shortcomings, ranging from a lack of availability, objectivity, or the fact that they measure a broader concept like the rule of law. This paper tries to address this gap by proposing a new index of property rights. Specifically, we use a state-space model to combine all available indicators tracking the security of property rights into an index that covers 191 countries over the period 1994–2014. We compare it to the existing indicators by revisiting the link between inequality, democracy and property rights, using a panel threshold regression model with fixed-effects. Depending on the measure of property rights that is used, there can be considerable differences in the size, significance and even the sign of the estimated parameters. Specifically, in contrast with existing measures, we find that a strengthening of the security of property rights reduces inequality in highly democratic countries only via the government's redistribution channel.

Keywords: Property rights; Institutions; Inequality; State-space model; Government redistribution; Panel threshold regression (search for similar items in EconPapers)
JEL-codes: C32 H24 O15 O17 O34 O38 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:64:y:2020:i:c:s0176268020300434

DOI: 10.1016/j.ejpoleco.2020.101895

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