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Securing Property Rights

Author

Listed:
  • Edward L. Glaeser
  • Giacomo A.M. Ponzetto
  • Andrei Shleifer

Abstract

A central challenge in securing property rights is the subversion of justice through legal skill, bribery, or physical force by the strong—the state or its powerful citizens—against the weak. We present evidence that the less educated and poorer citizens in many countries feel their property rights are least secure. We then present a model of a farmer and a mine which can pollute his farm in a jurisdiction where the mine can subvert law enforcement. We show that, in this model, injunctions or other forms of property rules work better than compensation for damage or liability rules. The equivalences of the Coase Theorem break down in realistic ways. The case for injunctions is even stronger when parties can invest in power. Our approach sheds light on several controversies in law and economics, but also applies to practical problems in developing countries, such as low demand for formality, law enforcement under uncertain property rights, and unresolved conflicts between environmental damage and development.

Suggested Citation

  • Edward L. Glaeser & Giacomo A.M. Ponzetto & Andrei Shleifer, 2016. "Securing Property Rights," NBER Working Papers 22701, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22701 Note: LE POL
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:chieco:v:44:y:2017:i:c:p:296-310 is not listed on IDEAS
    2. Edward L. Glaeser & Wentao Xiong, 2017. "Urban Productivity in the Developing World," NBER Working Papers 23279, National Bureau of Economic Research, Inc.
    3. Catherine Boone, 2017. "Legal empowerment of the poor through property rights reform: Tensions and trade-offs of land registration and titling in sub-Saharan Africa," WIDER Working Paper Series 037, World Institute for Development Economic Research (UNU-WIDER).
    4. Hans-Bernd Schäfer & Ram Singh, 2017. "Takings of Land by Self-interested Governments Economic Analysis of Eminent Domain," Working papers 281, Centre for Development Economics, Delhi School of Economics.

    More about this item

    JEL classification:

    • H13 - Public Economics - - Structure and Scope of Government - - - Economics of Eminent Domain; Expropriation; Nationalization
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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