Security of Property Rights for Whom?

72 Pages Posted: 26 Jul 2009

See all articles by Terra Lawson-Remer

Terra Lawson-Remer

The New School Graduate Program in International Affairs; United Nations - World Institute for Development Economics Research (UNU/WIDER); New York University

Date Written: July 23, 2009

Abstract

Using a new set of indicators that measure the Property Insecurity of ethnopolitical minority groups, I find that Property Insecurity is not correlated with the Risk of Expropriation facing foreign investors and domestic elites – revealing that the aggregate measures of 'institutional quality' broadly used in the cross-country empirical development literature proxy only limited dimensions of the institutions being measured. Existing widely used Risk of Expropriation indicators, initially designed to assess the security of property rights faced by foreign investors, are relevant to the experiences of elites but fail to adequately incorporate the perspective of marginalized minority groups – so do not reflect the risk of expropriation faced by a country’s population more broadly. It has been widely argued that secure private property rights are a prerequisite for economic development. This article demonstrates that it fundamentally matters whose property rights are secure. I find that Property Insecurity of ethnopolitical minorities does not reduce growth in either the short or long term; that the severity of Property Insecurity for the worst-off group in a country is strongly related to the onset of armed conflict; and that controlling for civil war, Property Insecurity is associated with higher growth. Economic growth can occur when the property rights of elites are secure but marginalized minorities face high a risk of expropriation, because land is reallocated into the hands of investors with access to capital. However, the potentially growth enhancing effect of forced displacement and resettlement is mitigated because the property insecurity of minorities is also correlated with conflict, which reduces growth.

Keywords: property rights, economic development, growth, risk of expropriation, property insecurity, minorities, ethnopolitical minorities, conflict, civil war, institutions, indicators

JEL Classification: A10, A14, B25, H11, J15, J18, K, K1, K11, K12, K33, O1, O1, O11, O12, O13, O15, O17, O18, Q15

Suggested Citation

Lawson-Remer, Terra, Security of Property Rights for Whom? (July 23, 2009). CELS 2009 4th Annual Conference on Empirical Legal Studies Paper. Available at SSRN: https://ssrn.com/abstract=1438062 or http://dx.doi.org/10.2139/ssrn.1438062

Terra Lawson-Remer (Contact Author)

The New School Graduate Program in International Affairs ( email )

66 W. 12th Street
New York, NY 10011
United States

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

New York University ( email )

New York, NY
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
88
Abstract Views
951
rank
185,825
PlumX Metrics