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Are both dimensions of property rights "efficient"?

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  • Pál Czeglédi

Abstract

The "efficient institutions view" on property rights claims that property rights emerged and are enforced when their enforcement maximizes net wealth. In a cross-country pattern this is usually understood as the prediction that economic development creates the incentives to provide higher quality property rights, but this claim is highly debated. This paper tries to take various property rights scholars’ arguments seriously and see property rights quality as a two dimensional concept, the two dimensions being the definition and the assignment of property rights. The paper derives a measure for these two dimensions of property rights and shows that it is the assignment dimension which is determined by development, while the definition dimensions is rather determined by cultural factors, especially those deeper factors that seem to reflect a long-run effect of Western European culture. According to the paper, the main reasons behind this may be the difference in the expropriability of income generated by an improvement of each dimension, and the way such improvements may or may not affect countries' catching up process.

Suggested Citation

  • Pál Czeglédi, 2015. "Are both dimensions of property rights "efficient"?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 12(1), pages 41-69, July.
    • Handle: RePEc:liu:liucej:v:12:y:2015:i:1:p:41-69
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    References listed on IDEAS

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    Cited by:

    1. Vladimír Holý & Tomáš Evan, 2022. "The role of a nation’s culture in the country’s governance: Stochastic frontier analysis," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 30(2), pages 507-520, June.
    2. Giuseppe Cavaliere & Anton Skrobotov & A. M. Robert Taylor, 2019. "Wild bootstrap seasonal unit root tests for time series with periodic nonstationary volatility," Econometric Reviews, Taylor & Francis Journals, vol. 38(5), pages 509-532, May.

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    More about this item

    Keywords

    property rights; efficient institutions; economic development; culture;
    All these keywords.

    JEL classification:

    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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