Constitutional Property Rights Protection and Economic Growth: Evidence From the Post-Communist Transition

Abstract

This paper seeks to estimate the economic growth effect of constitutional provisions for property rights protection. It does so using the unique situation in formerly communist countries in Central and Eastern Europe and the Caucasus where all but two introduced new constitutions after the fall of the Iron Curtain. The effects of implementing different constitutional provisions can therefore be observed in a group of countries with the same formal starting point. Estimates provide no evidence of positive effects and mainly point towards a negative conclusion: the introduction of constitutional protection of property rights is not associated with economic development in the long run, but tends to impose costs during a period of institutional transition and implementation proportional to the constitutional change.

Keywords: property rights, constitutional political economy, transition

JEL Classification: P16, P37, K40, O43