The Enforcement of Property Rights and Underdevelopment

Author/Editor:

Era Dabla-Norris ; Scott Freeman

Publication Date:

September 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 99/127

English

Publication Date:

September 1, 1999

ISBN/ISSN:

9781451854961/1018-5941

Stock No:

WPIEA1271999

Format:

Paper

Pages:

22

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