The Enforcement of Property Rights and Underdevelopment

22 Pages Posted: 15 Feb 2006

See all articles by Era Dabla-Norris

Era Dabla-Norris

International Monetary Fund (IMF)

Scott Freeman

University of Texas at Austin

Date Written: September 1999

Abstract

This paper formalizes the role of legal infrastructure in economic development in a general equilibrium model with endogenously determined property rights enforcement. It illustrates the mutual importance of property rights protection and market production by the model`s multiplicity of equilibria. In one equilibrium, property rights are enforced and market activity is unhampered. In the other, property rights are not enforced, which discourages economic activity and leaves the economy without the resources and incentives to enforce property rights. Even identically endowed economies may therefore find themselves in very different equilibria.

Keywords: Property rights multiple equilibria expropriation development

JEL Classification: D23 O41

Suggested Citation

Dabla-Norris, Era and Freeman, Scott, The Enforcement of Property Rights and Underdevelopment (September 1999). International Monetary Fund Working Paper No. 99/127, Available at SSRN: https://ssrn.com/abstract=880654

Era Dabla-Norris (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Scott Freeman

University of Texas at Austin ( email )

Austin, TX 78712
United States
512-475-8536 (Phone)
512-471-3510 (Fax)

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