Resource information
Most analyses of property rights and
economic development point to the negative influence of
insecure property rights on private investment. The authors
focus instead on the largely unexamined effects of insecure
property rights on government policy choices. They identify
one significant anomaly-dramatically higher public
investment in countries with insecure property rights-and
use it to make the following broad claims about insecure
property rights; 1) They increase rent-seeking. 2) They may
reduce the incentives of governments to use tax revenues for
productive purposes, such as public investment. 3) They do
so whether one regards the principal problem of insecure
property rights as the maintenance of law and order, which
government spending can potentially remedy, or as the threat
of expropriation by government itself, and therefore not
remediable by government spending. The authors present
substantial empirical evidence to support these claims.
