Institutions, Property Rights and Growth

Paul J. Zak
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Paul J. Zak: Claremont Graduate University

No 2002014, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper presents a growth model in which property rights are insecure and costly to enforce. Losses of property provide the impetus to establish institutions which seek to enforce property rights. Institutions are shown to implement policies that enforce property rights. The model establishes that economies in which the institutional structure does not adequately protect property rights grow slowly, or not at ail, while countries with better property rights protection grow in accordance with the standard neoclassical model. Because income inequality is a primary incentive to violate another's property rights, the model also provides a positive theory of income redistribution. Empirical tests of the model's predictions demonstrates that government expenditures that enforce property rights raise per capita income growth.

Keywords: Institutions; Growth; Development; Property Rights (search for similar items in EconPapers)
JEL-codes: D74 D9 P16 (search for similar items in EconPapers)
Pages: 20
Date: 2002-03-01
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvre:2002014

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