What Do the Decisions of the European Court of Human Rights Tell About Property Rights Across Europe?

Abstract

Despite the important role that institutions play in explaining economic growth, there exist few objective quantitative measures of institutional quality. We propose a new quantitative index that allows comparing the strength of property rights across the member states of the Council of Europe. To construct the index, we analyzed all judgments of the European Court of Human Rights (ECtHR) related to property rights for all member states and identified whether the ECtHR had found a violation of property rights in the domestic courts’ decisions. The resulting data were used to calculate the likelihood of finding violation in the judgments of national courts. Assuming that the ECtHR is impartial and unbiased, higher probability of overruling the judgments of local courts from a given country implies that the level of property rights protection is low. Our constructed measure is highly correlated with a number of indices of property rights protection used in the literature and serves as a strong objective foundation for these indices. Furthermore, we found that the ECtHR had received more applications from countries with higher likelihood of national court judgments violating property rights.

Keywords: Institutions, Property Rights, European Court of Human Rights, Economic Development

JEL Classification: O43, P48