Demographic Structure and the Security of Property Rights in Developing Countries – An Empirical Exploration

36 Pages Posted: 12 Dec 2010

Date Written: December 9, 2010

Abstract

It is often argued that countries with a high population share of children and young workers should attract large capital infl ows from aging industrialized economies. However, many of these countries deter foreign investors by a high risk of creeping or outright expropriation. In this paper we explore whether the correlation between countries’ demographic structure and the perceived security of property rights reflects a causal relationship. We show that, once we control for other potential determinants of expropriation risk, the ratio of young to old workers has a positive effect on the perceived security of property rights in low-income countries. This effect is the stronger the more democratic the political system.

Keywords: International investment, political economy, expropriation risk, demographics

JEL Classification: F21, D78, J10

Suggested Citation

Harms, Philipp and an de Meulen, Philipp, Demographic Structure and the Security of Property Rights in Developing Countries – An Empirical Exploration (December 9, 2010). Ruhr Economic Paper No. 229, Available at SSRN: https://ssrn.com/abstract=1722644 or http://dx.doi.org/10.2139/ssrn.1722644

Philipp Harms

Study Centre Gerzensee ( email )

CH-3115 Gerzensee
Switzerland

Philipp An de Meulen (Contact Author)

RWI ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

HOME PAGE: http://www.rwi-essen.de

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