Endogenous Property Rights
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Author | : Daniel Diermeier |
Publisher | : |
Total Pages | : |
Release | : 2013 |
Genre | : Economics |
ISBN | : |
It is often argued that additional checks and balances provide economic agents with better protection from expropriation of their wealth or productive capital. We demonstrate that in a dynamic political economy model this intuition may be flawed. Surprisingly, increasing the number of veto players or the majority requirement for redistribution may reduce property right protection on the equilibrium path. The reason is the existence of two distinct mechanisms of property rights protection. One are formal constraints that allow individuals or groups to block any redistribution which is not in their favor. The other occurs in equilibrium where agents without such powers protect each other from redistribution. Players without formal blocking power anticipate that the expropriation of other similar players will ultimately hurt them and thus combine their influence to prevent redistributions. Yet, such incentives can be undermined by adding formal constraints. The flip-side of this effect is that individual investment efforts might require coordination. The model also predicts that the distribution of wealth in societies with weaker formal institutions (smaller supermajority requirements) among players without veto power will tend to be more homogenous.
Author | : Gregmar Ignacio Galinato |
Publisher | : |
Total Pages | : 207 |
Release | : 2006 |
Genre | : |
ISBN | : |
Author | : Aaron Tornell |
Publisher | : |
Total Pages | : 40 |
Release | : 1994 |
Genre | : |
ISBN | : |
Author | : Peter Ho |
Publisher | : Routledge |
Total Pages | : 324 |
Release | : 2018-10-15 |
Genre | : Social Science |
ISBN | : 1351623486 |
From a neo-liberal, neo-classical paradigm, secure, formal and private property rights are crucial to fostering sustained development. Institutions that fail to respond to shifting socio-economic opportunities are thus forced to make new arrangements. The enigma is posed by developments on the ground. Why would the removal of authoritarian institutions during the Arab Spring or Iraq War not increase market efficiency but rather cause the reverse, while China and India, despite persisting insecure, informal and common institutions, featured sustained growth? This collection posits that understanding these paradoxes requires a refocusing from form to function, detached from normative assumptions about institutional appearance. In so doing, three things are accomplished. First, starting from case studies on land, it is ascertained that the argument can be meaningfully extended to labour, capital and beyond. Second, the argument validates the ‘Credibility Thesis’ – that is, once institutions persist, they fulfil a function. Third, the collection studies ‘development, broadly construed’, by including the modes of production and beyond, the rural and urban, the developed and developing. This is why it reviews property rights from China and India, to Turkey, Mexico and Malaysia, covering issues such as customary rights and privatization, mining and pastoralism, dam-building and irrigation, but also state-owned banks, trade unions and notaries. This book was originally published as a special issue of The Journal of Peasant Studies.
Author | : Gregmar Ignacio Galinato |
Publisher | : |
Total Pages | : 0 |
Release | : 2006 |
Genre | : |
ISBN | : |
Author | : Carmine Guerriero |
Publisher | : |
Total Pages | : 49 |
Release | : 2016 |
Genre | : |
ISBN | : |
Although property rights are key, their determinants are still poorly understood. When property is fully protected, some potential buyers with valuation higher than that of original owners are inefficiently excluded from trade due to transaction costs. When property rights are weak, low-valuation potential buyers inefficiently expropriate original owners. The trade-off between these two misallocations implies that the protection of property will be stronger the more heterogeneous the potential buyers' preferences are. This implication holds true when part of the population has higher political influence on institutional design, when transaction costs are determined by either market power or asymmetric information, and when I consider the disincentive effect of weak property rights. Moreover, it is consistent with the relationships between measures of ethno-linguistic, genetic, and religious diversity and novel data on the rules on adverse possession and on government takings of real property in 126 jurisdictions.
Author | : Jan U. Auerbach |
Publisher | : |
Total Pages | : 164 |
Release | : 2014 |
Genre | : Electronic dissertations |
ISBN | : |
This dissertation studies societies' choices of property rights regimes in an environment in which heterogeneous agents can choose to appropriate others' resources. It is organized in three essays that consider the same underlying economy. In the first essay, I analyze an economic mechanism that captures the idea that competition in the political arena helps good economic outcomes. I show that two societies with the same productivity distribution and the same office holder, but electoral runners-up with different productivity, face different alternatives and choose different levels of enforcement. Moreover, easier access to the political arena for more people increases the likelihood of better outcomes while extending the franchise alone does not. In the second essay, I focus on one potential reason for why a society might implement an allocation that allows for appropriation to occur--while the first best outcome does not. The planner cannot verify taxable income but can only inflict a cost on agents who are hiding resources from taxation. I show that, while this friction imposes a binding and effective constraint on the planner's choices, it does not prevent him from implementing an outcome in which appropriation is absent and property rights are perfectly secure. The results emphasize the importance of frictions in the political arena for imperfectly secure property rights. In the third essay, ignoring efficiency per se, I describe an incentive for a governing authority to crowd out appropriation activities altogether. This incentive is present whenever the size of the pie that can be shared among members of society enters the trade-off facing the authority, independent of the political environment the authority finds itself in. Therefore, other competing incentives must affect the society's decision making process to generate imperfectly secure rights to property.
Author | : Gregmar I. Galinato |
Publisher | : |
Total Pages | : 0 |
Release | : 2008 |
Genre | : |
ISBN | : |
This paper analyzes the impact of trade on resource stocks through endogenously selected property rights regimes. We present a model that shows welfare can be maximized when a community degrades its resource stock under optimally selected property rights regimes after opening to trade. Results from a laboratory experiment show that labor allocations, property rights regimes and resource stock levels do not follow the optimal dynamic Nash equilibrium path. Instead a non-optimal dynamic equilibrium path is selected due to incorrect initial labor allocation and property rights regime choices.
Author | : Ingrid Peters-Fransen |
Publisher | : |
Total Pages | : |
Release | : 1993 |
Genre | : Economics |
ISBN | : 9780771414985 |
Author | : Daniel Leonard |
Publisher | : |
Total Pages | : 0 |
Release | : 2012 |
Genre | : |
ISBN | : |
The purpose of this article is to present a model of the endogenous evolution of a society's property rights regime. We use an overlapping-generations framework in which capital accumulation takes place. Property rights enforcement is costly. Individuals decide collectively in each period the appropriate level of enforcement and pay taxes to finance it. Poor households have less interest in the enforcement of property rights than rich households. We also consider heterogenous households with different tastes. They differ on their choice of law enforcement. As their wealth and numbers evolve, political power may change sides, hence the property rights regime also evolves.