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Institutions, Property Rights and Growth

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  • Paul J. ZAK

    (Claremont Graduate University)

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.

Suggested Citation

  • Paul J. ZAK, 2002. "Institutions, Property Rights and Growth," Discussion Papers (REL - Recherches Economiques de Louvain) 2002014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvre:2002014
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    File URL: http://sites.uclouvain.be/econ/DP/REL/2002014.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gradstein, Mark, 2004. "Governance and growth," Journal of Development Economics, Elsevier, pages 505-518.
    2. Mtiraoui, Abderraouf, 2015. "La corruption entre l’aspect institutionnel économique et l’aspect social à travers la gouvernance
      [Corruption between economic institutional aspect and social aspect through governance]
      ," MPRA Paper 61122, University Library of Munich, Germany.
    3. Ngendakuriyo, Fabien & Zaccour, Georges, 2013. "Fighting corruption: To precommit or not?," Economics Letters, Elsevier, vol. 120(2), pages 149-154.
    4. Zak, Paul J. & Feng, Yi, 2003. "A dynamic theory of the transition to democracy," Journal of Economic Behavior & Organization, Elsevier, vol. 52(1), pages 1-25, September.
    5. Gradstein, Mark, 2003. "Governance and economic growth," Policy Research Working Paper Series 3098, The World Bank.

    More about this item

    Keywords

    Institutions; Growth; Development; Property Rights;

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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