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Securing Private Property: Formal versus Informal Institutions

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  • Claudia R. Williamson
  • Carrie B. Kerekes

Abstract

Property rights are one of the most fundamental and highly robust institutions supporting economic performance. However, the channels through which property rights are achieved are not adequately identified. This paper is a first step toward unbundling the black box of property rights into a formal and an informal component. We empirically determine the significance of both informal and formal rules in securing property rights. We find that when both components are included in the analysis, the impact of formal constraints is greatly diminished, while informal constraints are highly significant in explaining the security of property. These results are robust to a variety of model specifications, multiple instrumental variables, and a range of control variables.

Suggested Citation

  • Claudia R. Williamson & Carrie B. Kerekes, 2011. "Securing Private Property: Formal versus Informal Institutions," Journal of Law and Economics, University of Chicago Press, vol. 54(3), pages 537-572.
  • Handle: RePEc:ucp:jlawec:doi:10.1086/658493
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    Cited by:

    1. Alessandra Cassar & Giovanna d'Adda & Pauline Grosjean, 2014. "Institutional Quality, Culture, and Norms of Cooperation: Evidence from Behavioral Field Experiments," Journal of Law and Economics, University of Chicago Press, vol. 57(3), pages 821-863.
    2. repec:ces:ifodic:v:13:y:2015:i:3:p:19173869 is not listed on IDEAS
    3. Nabamita Dutta & Sanjukta Roy, 2013. "The changing face of culture: gauging the impact of a free media," European Journal of Law and Economics, Springer, vol. 36(1), pages 95-115, August.
    4. Jochen Wicher & Theresia Theurl, 2015. "The Positive Relationship between Institutions and the Economic Development – Evidence from a Panel Data Set of OECD Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 49-58, October.
    5. Neyapti, Bilin & Arasil, Yavuz, 2016. "The nexus of economic and institutional evolution," Economic Modelling, Elsevier, vol. 52(PB), pages 574-582.
    6. Neyapti, Bilin, 2013. "Modeling institutional evolution," Economic Systems, Elsevier, vol. 37(1), pages 1-16.
    7. Ilia Murtazashvili & Jennifer Murtazashvili, 2015. "Anarchy, self-governance, and legal titling," Public Choice, Springer, vol. 162(3), pages 287-305, March.
    8. Davis, Lewis S. & Williamson, Claudia R., 2016. "Culture and the regulation of entry," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 1055-1083.
    9. repec:cup:jinsec:v:13:y:2017:i:03:p:575-598_00 is not listed on IDEAS
    10. Hall, Stephen G & Ahmad, Mahyudin, 2013. "Can Trust Explain Social Capital Effect on Property Rights and Growth?," MPRA Paper 48440, University Library of Munich, Germany.
    11. Doidge, Mary & Deaton, B. James & Woods, Bethany, 2013. "Institutional Change on First Nations: Examining factors influencing First Nations Adoption of the Framework Agreement on First Nation Land Management," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150519, Agricultural and Applied Economics Association.
    12. Broegaard, Rikke Brandt & Vongvisouk, Thoumthone & Mertz, Ole, 2017. "Contradictory Land Use Plans and Policies in Laos: Tenure Security and the Threat of Exclusion," World Development, Elsevier, vol. 89(C), pages 170-183.
    13. Christopher J. Coyne & Claudia R. Williamson, 2012. "Purpose – This paper seeks to analyze empirically the net effect of trade openness on “economic culture”, measured by indicators of trust, respect, level of self-determination, and obedience. Openness," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing, vol. 1(4), pages 22-49, April.
    14. Kamei, Kenju, 2018. "Group Size Effect and Over-Punishment in the Case of Third Party Enforcement of Social Norms," MPRA Paper 85713, University Library of Munich, Germany.
    15. Yasir Khan & Attiya Yasmin Javid, 2015. "The Impact of Formal and Informal Institutions on Economic Performance: A Cross-Country Analysis," PIDE-Working Papers 2015:130, Pakistan Institute of Development Economics.
    16. Tóth, Ákos, 2011. "Az állam kultúrafinanszírozásban betöltött szerepének megváltozása a kultúra demokratizálódásának hatására
      [The transition in the state s role in cultural financing caused by the democratization of
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 333-350.
    17. Pitlik, Hans & Rode, Martin, 2017. "Individualistic values, institutional trust, and interventionist attitudes," Journal of Institutional Economics, Cambridge University Press, vol. 13(03), pages 575-598, September.
    18. Douglas A. Irwin, 2014. "Adam Smith's "Tolerable Administration of Justice" and the Wealth of Nations," NBER Working Papers 20636, National Bureau of Economic Research, Inc.
    19. Claudia Williamson, 2009. "Informal institutions rule: institutional arrangements and economic performance," Public Choice, Springer, vol. 139(3), pages 371-387, June.
    20. repec:eee:corfin:v:46:y:2017:i:c:p:284-306 is not listed on IDEAS
    21. Claudia Williamson & Rachel Mathers, 2011. "Economic freedom, culture, and growth," Public Choice, Springer, vol. 148(3), pages 313-335, September.
    22. Ahmad, Mahyudin & Hall, Stephen G., 2014. "Explaining social capital effects on growth and property rights via trust-alternative variables," MPRA Paper 58358, University Library of Munich, Germany.

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