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Conflict, Growth and Welfare: Can Increasing Property Rights Really be Counterproductive?


  • Aynur Alptekin

    (University of Surrey)

  • Paul Levine

    (University of Surrey)


Gonzalez (2007), JET, 137(1), 127-139, sets out a growth model with con- flict in which households allocate their resources across consumption, and investment in both productive and unproductive capital. A striking result is obtained: there are circumstances where increasing property rights in society can actually reduce social welfare and hence incremental changes are not nec- essarily in peoples’ interests. This note reassesses this claim in a generalized form of his model with a CRRA utility function (with a risk aversion param- eter, sigma > 1 rather than his logarithmic form) and we assume a less than full depreciation of capital. Both these generalizations prove to be critical ones that significantly change the result.

Suggested Citation

  • Aynur Alptekin & Paul Levine, 2009. "Conflict, Growth and Welfare: Can Increasing Property Rights Really be Counterproductive?," School of Economics Discussion Papers 0109, School of Economics, University of Surrey.
  • Handle: RePEc:sur:surrec:0109

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    Conflict; growth; property rights; welfare.;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General


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