Property Rights, Optimal Public Enforcement, and Growth

24 Pages Posted: 14 Dec 2011

See all articles by Andreas Irmen

Andreas Irmen

University of Luxembourg - Ceter for Research in Economic Analysis (CREA); CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Munich

Johanna Kuehnel

Heidelberg University - Alfred Weber Institute for Economics

Date Written: December 14, 2011

Abstract

We study the link between public enforcement of property rights, innovation investments, and economic growth in an endogenous growth framework with an expanding set of product varieties. We find that a government may assure positive equilibrium growth through public employment in the enforcement of property rights, if the economic environment is sufficiently favorable to growth and/or public enforcement is sufficiently effective. However, in terms of welfare an equilibrium path without property rights protection and growth might be preferable. In this case the enforcement of property rights involves too much reallocation of labor from production and research towards the public sector.

Keywords: technological change, economic development, property rights, public employment

JEL Classification: O100, H110, D230

Suggested Citation

Irmen, Andreas and Kuehnel, Johanna, Property Rights, Optimal Public Enforcement, and Growth (December 14, 2011). CESifo Working Paper Series No. 3668. Available at SSRN: https://ssrn.com/abstract=1972171

Andreas Irmen

University of Luxembourg - Ceter for Research in Economic Analysis (CREA) ( email )

162a, avenue de la Faïencerie
Luxembourg, L – 1511
Luxembourg

HOME PAGE: http://wwwen.uni.lu/recherche/fdef/crea/people/andreas_irmen

CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Munich

Poschinger Str. 5
Munich, DE-81679
Germany

Johanna Kuehnel (Contact Author)

Heidelberg University - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 58
Heidelberg, D-69115
Germany

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