{
  "title": "The Enforcement of Property Rights and Underdevelopment",
  "publication": "IMF Working Papers, September 1, 1999",
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  "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.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- This paper formalizes the role of legal infrastructure in economic development in a general equilibrium model with endogenously determined property rights enforcement.\n- The model illustrates the mutual importance of property rights protection and market production by a multiplicity of equilibria:\n  - In one equilibrium, property rights are enforced and market activity is unhampered.\n  - In the other equilibrium, property rights are not enforced, which discourages economic activity and leaves the economy without the resources and incentives to enforce property rights.\n- The paper highlights that even identically endowed economies may find themselves in very different equilibria."
    },
    {
      "heading": "Model and Mechanism",
      "content": "- Framework: general equilibrium model with endogenous determination of property rights enforcement.\n- Core mechanism:\n  - Property rights enforcement and market production are mutually reinforcing.\n  - Enforcement requires resources and incentives that derive from economic activity.\n  - Lack of enforcement reduces expected returns to market activity, suppressing the resource base needed for enforcement."
    },
    {
      "heading": "Main Findings",
      "content": "- Existence of multiple equilibria characterized by starkly different outcomes for market activity and property rights enforcement.\n- A non-enforcement equilibrium is self-reinforcing: low enforcement → low economic activity → insufficient resources/incentives to enforce property rights.\n- Identically endowed economies can diverge into different equilibria solely due to differences in enforcement dynamics."
    },
    {
      "heading": "Implications",
      "content": "- Legal infrastructure and enforcement capacity are central to economic development outcomes.\n- Strengthening property rights enforcement can be pivotal to moving an economy from a low-activity equilibrium to a high-activity equilibrium (as implied by the model’s structure and multiplicity of equilibria).\n\n---\n\n Content in this bundle\n\n- The Enforcement of Property Rights and Underdevelopment - WP/99/127\n  - The Enforcement of Property Rights and Underdevelopment - WP/99/127 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - The Enforcement of Property Rights and Underdevelopment - WP/99/127 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-enforcement-of-property-rights-and-underdevelopment-3277"
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    "Authors: Era Dabla-Norris, Scott Freeman",
    "Published: September 1, 1999",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451854961.001",
    "This paper formalizes the role of legal infrastructure in economic development in a general equilibrium model with endogenously determined property rights enforcement.",
    "The model illustrates the mutual importance of property rights protection and market production by a multiplicity of equilibria:",
    "The paper highlights that even identically endowed economies may find themselves in very different equilibria.",
    "Framework: general equilibrium model with endogenous determination of property rights enforcement.",
    "Core mechanism:",
    "Existence of multiple equilibria characterized by starkly different outcomes for market activity and property rights enforcement.",
    "A non-enforcement equilibrium is self-reinforcing: low enforcement → low economic activity → insufficient resources/incentives to enforce property rights.",
    "Identically endowed economies can diverge into different equilibria solely due to differences in enforcement dynamics.",
    "Legal infrastructure and enforcement capacity are central to economic development outcomes.",
    "Strengthening property rights enforcement can be pivotal to moving an economy from a low-activity equilibrium to a high-activity equilibrium (as implied by the model’s structure and multiplicity of equilibria).",
    "**The Enforcement of Property Rights and Underdevelopment - WP/99/127**"
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