Hostname: page-component-cd9895bd7-gvvz8 Total loading time: 0 Render date: 2024-12-27T14:55:14.831Z Has data issue: false hasContentIssue false
  • English
  • Français

Institutions, Property Rights, and Growth

Published online by Cambridge University Press:  17 August 2016

Paul J. Zak
Paul J. Zak*
Affiliation:
Claremont Graduate University
*
Department of Economics, Claremont Graduate University, Claremont, CA 91711-6165, [email protected] or http://fac.cgu.edurzakp
Get access

Summary

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.

Résumé

Résumé

Ce modèle présente un modèle de croissance dans lequel les droits de propriété sont peu sûrs et coûteux à faire appliquer. Les pertes de propriété incitent à la mise en place d’institutions qui ont pour but de faire appliquer les droits de propriété. Nous montrons que les institutions font appliquer des politiques qui protègent les droits de propriété. Le modèle établit que les économies dont la structure institutionnelle ne protège pas de façon adéquate les droits de propriété ont une croissance faible ou nulle. Les économies dotées d’une meilleure protection des droits de propriété ont une croissance conforme au modèle néoclassique standart. Etant donné que l’inégalité des revenus est une source majeure de la violation des droits de propriété, ce modèle fournit également une théorie positive de la redistribution du revenu. Les tests empiriques des prédictions du modèle montrent que les dépenses gouvernementales en matière de protection des droits de propriété augmentent la croissance du revenu par tête.

Keywords

InstitutionsGrowthDevelopmentProperty RightsD9P16D74InstitutionsCroissanceDéveloppementDroits de propriétéD9P16D74
Type
I. Macroeconomics and National Accounting
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 68 , Special Issue 1-2: The New Economy: Implications and Viability , 2002 , pp. 55 - 73
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2002 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

I have benefited from the comments of Michele Boldrin, John Fernald, Raquel Fernandez, Gary Hansen, Tatsuji Hayakawa, Fumio Hayashi, Rody Manuelli, Scott Page, Stergios Skeperdas, Yannis Venieris, Randy Wright and especially Herschel Grossman, W. Craig Stubblebine Phillip Swagel, Raouf Boucekkine and an anonymous referee, as well as participants at the Econometric Society North American Meeting, Cal Tech, the University of Pennsylvania, and Claremont Graduate University though they are not culpable for omissions or errors. Alacritous research assistance was provided by John Stinespring.

References

Alesina, A. and Perotti, R. (1996), “Income Distribution, Political Instability and Investment”, European Economic Review, 40(6), 1203–28.Google Scholar
Alesina, A. and Rodrik, D. (1994), “Distributive Politics and Economic Growth”, Quarterly Journal of Economics, 109(2), 465–90.Google Scholar
Alesina, A., Ozler, S. Roubini, N. and Swagel, P. (1996), “Political Instability and Economic Growth”, Journal of Economic Growth, 1(2), 189–212.Google Scholar
Amable, B., Breton, R. and Ragot, X. (2002), “Does the New Economy Change the Frontiers of the Large Corporation?”, Louvain Economic Review, this issue.Google Scholar
Azariadis, C. (1997), “The Economics of Ppoverty Traps, part one: Complete Markets”, Journal of Economic Growth, 1(4), 449–486.Google Scholar
Barro, R. J. (1991), “Economic Growth in a Cross Section of Countries”, Quarterly Journal of Economics, 106, 407–44.Google Scholar
Barro, R. J. (1990), “Government Spending in a Simple Model of Endogenous Growth”, Journal of Political Economy, 98, 103–25.Google Scholar
Benhabib, J. and Rustichini, A. (1996), “Social Conflict and Growth”, Journal of Economic Growth, 1(1), 125–42.Google Scholar
Brenner, Y.S., H. Kaelble and M. Thomas, eds. (1991), Income Distribution in Historical Perspective, Cambridge University Press.Google Scholar
Bueno de Mesquita, B., Morrow, J. D. Siverson, R. and Smith, A. (2000), “Political Institutions, Political Survival, and Policy Success”, in Governing for Prosperity, B. Bueno de, Mesquita and Root, H., eds., Yale University Press.Google Scholar
Caballé, J. and Manresa, A. (1994), “Social Rents, Interest Rates, and Growth”, Economics Letters, 45(3), 413–19.Google Scholar
Chang, R. (1998), “Political Party Negotiations, Income Distribution and Endogenous Growth, Journal of Monetary Economics, 41(2), 227–55.Google Scholar
Feng, Y., and Zak, P. J. (1999), “The Determinants of Democratic Transitions, Journal of Conflict Resolution, 43(2), 162–77.Google Scholar
Galor, O. and Ryder, H. (1989), “On the Existence of Equilibrium in an Overlapping Generations Model with Productive Capital”, Journal of Economic Theory, 49, 360–375.Google Scholar
Ghate, C., Le, Q. and Zak, P. J. (2001), “Optimal Fiscal Policy in an Economy Facing Socio-Political Instability”, Claremont Graduate University Working Paper.Google Scholar
Ghate, C. and Zak, P. J. (2001), “Growth of Government and the Politics of Fiscal Policy”, Structural Change and Economic Dynamics, forthcoming.Google Scholar
International Monetary Fund (1998), Government Finance Statistics Yearbook.Google Scholar
Grossman, H. L. (1991), “A General Equilibrium Model of Insurrections”, American Economic Review, 81(4), 912–921.Google Scholar
Grossman, H. L. (1995), “Robin Hood and the Redistribution of Property”, European Journal of Political Economy, 11(3), 399–410.Google Scholar
Grossman, H. L. and Kim, M. (1996), “Predation and Accumulation”, Journal of Economic Growth, 1(3), 333–50.Google Scholar
Grossman, H. L. and Kim, M. (1995), “Swords or Plowshares? a Theory of the Security of Claims to Property”, Journal of Political Economy, 103(6), 1275–88.Google Scholar
Haavelmo, T. (1954), A Study in the Theory of Economic Evolution, North-Holland.Google Scholar
Hirshleifer, J. (1995), “Anarchy and its Breakdown”, Journal of Political Economy, 103(1), 26–52.Google Scholar
Hirshleifer, J. (1991), “The Technology of Conflict as an Economic Activity”, American Economic Review, Papers and Proceedings, 81(2), 130–134.Google Scholar
Holsey, C. M. and Borcherding, T. E. (1997), “Why Does Government’s Share of National Income Grow? An Assessment of the Recent Literature on the U.S Experience”, pp. 562–589, in Perspectives on Public Choice, D. C. Mueller, ed., Cambridge University Press.Google Scholar
Jones, L. E. and Manuelli, R. (1991), “Finite Lifetimes and Growth”, Journal of Economic Theory, 58(2), 171–97.Google Scholar
Knack, S. and Keefer, P. (1995), “Institutions and Economic Performance: Cross-country Tests using Alternative Institutional Measures”, Economics and Politics, 7, 207–27.Google Scholar
Konrad, K. A. and Skaperdas, S. (1998), “Extortion”, Economica, 65(260), 461–77.Google Scholar
North, D. C. (1988), Structure and Change in Economic History, W. W. Norton.Google Scholar
North, D. C. (1990), Institutions, Institutional Change and Economic Performance, Cambridge University Press.Google Scholar
Perotti, R. (1992), “Income Distribution, Politics and Growth”, American Economic Review, 82(2), 311–316.Google Scholar
Perotti, R. (1996), “Growth, Income Distribution, and Democracy: what the Data Say”, Journal of Economic Growth, 1(2), 149–87.Google Scholar
Persson, T. and Tabellini, G. (1994), “Is Inequality Harmful for Growth?”, American Economic Review, 84(3), 600–621.Google Scholar
Romer, P. M. (1990), “Endogenous Technological Change”, Journal of Political Economy, 98, S71-S102.Google Scholar
Skaperdas, S. (1992), “Cooperation, Conflict and Power in the Absence of Property Rights”, American Economic Review, 82(4), 721–739.Google Scholar
Smith, A. (1776/1937), An Inquiry into the Nature and Causes of the Wealth of Nations, Random House Modern Library Google Scholar
Summers, R. and Heston, A. (1991), “The Penn World Table, (Mark V), An Expanded Set of International Comparisons”, The Quarterly Journal of Economics, CVI(2), 327–368.Google Scholar
Tornell, A. (1997), “Economic Growth and Decline with Endogenous Property Rights”, Journal of Economic Growth, 2(3), 219–50Google Scholar
Venieris, Y. and Gupta, D. (1985), “Sociopolitical and Economic Dimensions of Development: A Cross-section Model”, Economic Development and Cultural Change, 31, 727–756.Google Scholar
Venieris, Y. and Gupta, D. (1986), “Income Distribution and Socio-political Instability as Determinants of Savings: a Cross-sectional Model”, Journal of Political Economy, 94(4), 873–883.Google Scholar
Zak, P. J. and Knack, S. (2001), “Trust and Growth”, The Economic Journal, 111, 1–27.Google Scholar
Zak, P. J. (2000a), “Socio-political Instability and the Problem of Development”, ch. 6 in Governing for Prosperity, Bueno de Mesquita, B. and Root, H., eds., Yale University Press Google Scholar
Zak, P. J. (2000b), “Larceny”, Economics of Governance, 1, 157–179.Google Scholar
Zak, P. J. (1994), Growth and Heterogeneity: Theory and Policy with Many Agents, PhD dissertation, University of Pennsylvania.Google Scholar