Governance and Growth

28 Pages Posted: 23 Apr 2002

See all articles by Mark Gradstein

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); World Bank - Development Research Group (DECRG)

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Date Written: March 2002

Abstract

Because of its inappropriability, protection of property rights is widely recognized as being the state's responsibility. Moreover, recent empirical evidence suggests that it leads to higher investment levels and faster growth. Nevertheless, the extent of property rights protection differs significantly across countries. This Paper endogenizes the emergence of property rights within a simple growth framework. Drawing on North (1990), we present a model where economic performance and enforcement of property rights may reinforce each other. Depending on initial conditions, the economy can converge to a high-income or a low-income steady state. The existing empirical evidence seems to offer a tentative support for this theory.

Keywords: Enforcement of property rights, economic growth

JEL Classification: D72, O11

Suggested Citation

Gradstein, Mark, Governance and Growth (March 2002). CEPR Discussion Paper No. 3270. Available at SSRN: https://ssrn.com/abstract=307825

Mark Gradstein (Contact Author)

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+97 2 8647 2288 (Phone)
+97 2 8647 2941 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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