Are Property Rights Relevant for Development Economics? On the Dangers of Western Constructivism

Although the importance of property rights as the engine of growth remains beyond dispute, this article tries to show that the crucial issue is not so much the definition of the allegedly ‘optimal’ property right system, as the understanding of the ideological elements that justify property rights in the first place – entrepreneurship and self-responsibility. Unless one clearly perceives the nature of the ideological structure that legitimises the rules of the game in a given society, it is virtually impossible to understand why growth-conducive property-right systems fail to emerge and be accepted. Put differently, property rights are certainly necessary for growth. But they are no tools for policy-making. Getting them right – or transferring them from other contexts - is not enough, especially if their assignment and enforcement remains a top-down process, whereby local politicians or international technocrats suggest and enforce institutional arrangements experienced elsewhere.