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Institutions, Property Rights, and Growth


  • Paul Zak

    (Claremont Graduate University)


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 all, 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.

Suggested Citation

  • Paul Zak, "undated". "Institutions, Property Rights, and Growth," Gruter Institute Working Papers on Law, Economics, and Evolutionary Biology 2-1-1009, Berkeley Electronic Press.
  • Handle: RePEc:bep:grleeb:2-1-1009 Note: oai:bepress:giwp-1009

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    References listed on IDEAS

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    Cited by:

    1. Andreas Irmen & Johanna Kuehnel, 2011. "Property rights, optimal public enforcement, and growth," CREA Discussion Paper Series 11-18, Center for Research in Economic Analysis, University of Luxembourg.
    2. Gradstein, Mark, 2003. "Governance and economic growth," Policy Research Working Paper Series 3098, The World Bank.
    3. Yi Feng & Jacek Kugler & Paul Zak, "undated". "The Path to Prosperity: A Political Model of Demographic Change," Claremont Colleges Working Papers 1999-23, Claremont Colleges.
    4. Stergios Skaperdas, 2003. "Restraining the Genuine Homo Economicus: Why the Economy Cannot Be Divorced from Its Governance," Economics and Politics, Wiley Blackwell, vol. 15(2), pages 135-162, July.
    5. Lawrence King & Osvaldo Gómez Martínez, 2010. "Property Rights Reform and Development: A Critique of the Cross-National Regression Literature," Working Papers wp216, Political Economy Research Institute, University of Massachusetts at Amherst.

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    Institutions; Growth; Development; Property Rights;

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