Political Property Rights and Governance Outcomes: A Theory of the Corporate Polity
Journal of Private Enterprise, Forthcoming
26 Pages Posted: 21 Feb 2015 Last revised: 12 Dec 2015
Date Written: December 11, 2015
I present a theory of political property rights that serves as a complement to familiar Tiebout mechanisms in explaining governance outcomes. I argue that when the structure of political property rights is such that the polity most closely resembles a business corporation, governance will be largely productive. In contrast, when the structure of political property rights is such that the polity is characterized by a tragedy of the commons, governance will be largely predatory and will promote rent seeking. I illustrate my theory with reference to two corporate-like polities, Singapore and the United Arab Emirates, as well as the literature on private city planning on urban development. I also discuss the assumptions to which my analysis is sensitive, and conclude by exploring possible future trends in governance in light of my theory.
Keywords: Political property rights, predatory governance, private governance, productive governance
JEL Classification: D72, H11, H77, P14, P16
Suggested Citation: Suggested Citation