Voracity and Growth Reconsidered

25 Pages Posted: 18 Jun 2008

See all articles by Holger Strulik

Holger Strulik

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences

Date Written: June 2008

Abstract

This article investigates economic performance when enforceable property rights are missing and subsistence needs matter. It shows that if per capita income is sufficiently high, a windfall gain in productivity triggers behavior that leads to higher growth (the normal reaction). The same shock can produce voracious behavior and lower growth when faced by poor economic agents, in particular when their productivity is low and their society is largely fractionalized. This leads to a re-assessment of the voracity effect. Economic and social performance depends no longer on character traits (the assumed curvature of the utility function) as assumed in the earlier literature. Instead, the initial degree of development, the state of technology, and the make up of society are decisive. An extension towards a two-sector economy shows that conditions for an active informal sector of low productivity are much less restrictive than originally thought.

Keywords: economic growth, property rights, common pool resources, voracity, fractionalization

JEL Classification: O11, O13, D74, P48

Suggested Citation

Strulik, Holger, Voracity and Growth Reconsidered (June 2008). Available at SSRN: https://ssrn.com/abstract=1147157 or http://dx.doi.org/10.2139/ssrn.1147157

Holger Strulik (Contact Author)

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences ( email )

Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
74
Abstract Views
972
Rank
576,524
PlumX Metrics