Abstract
This paper presents the long-run equilibrium and developmentdynamics in the neoclassical growth model and a simple modelof endogenous growth when property rights are absent. Theresults are compared to the outcome in a corresponding modelwith secure property rights. The main findings are that thereexists a considerable gain in level and growth of consumptionfrom establishing secure property rights, that economicperformance without property rights worsens with an increasingnumber of competing social groups, and that the existence orabsence of property rights explains conditional convergence.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Acemoglu, D., Johnson, S. and Robinson, J.A. (2001). The colonial origins of comparative development: An empirical investigation. American Economic Review 91: 1369–1401.
Acemoglu, D., Johnson, S. and Robinson, J.A. (2002). Reversal of fortune: Geography and institutions in the making of the modern word income distribution. Quarterly Journal of Economics 117: 1231–1294.
Atkeson, A. and Ogaki, M. (1996). Wealth-varying intertemporal elasticities of substitution: Evidence from panel and aggregate data. Journal of Monetary Economics 38: 507–534.
Basar, T. and Olsder, G.J. (1995). Dynamic noncooperative game theory. Second edition. New York: Academic Press.
Barro, R.J. and Sala-i-Martin, X. (1995). Economic growth. New York: McGraw-Hill.
Benhabib, J. and Rustichini, A. (1996). Social conflict and growth. Journal of Economic Growth 1: 125–142.
Besley, T. (1995). Property rights and investment incentives: Theory and evidence fromGhana. Journal of Political Economy 103: 903–937.
Bloom, D.E. and Sachs, J.D. (1998). Geography, demography, and economic growth in Africa. Brookings Papers on Economic Activity 1998:2: 207–295.
Brunner, M. and Strulik, H. (2002). Solution of perfect foresight saddlepoint problems: A simple method and applications. Journal of Economic Dynamics and Control 26: 737–753.
Cass, D. (1965). Optimum growth in an aggregative model of capital accumulation. Review of Economic Studies 32: 233–240.
Collier, P. and Gunning, J.W. (1999). Explaining African economic performance. Journal of Economic Literature 37: 64–111.
Easterly, W. and Levine, R. (1997). Africa's growth tragedy: Policies and ethnic divisions. Quarterly Journal of Economics 111: 1203–1250.
Easterly, W. and Levine, R. (2003). Tropics, germs, and crops: How endowments influence economic development. Journal of Monetary Economics 50: 3–39.
Fearon, J.D. and Laitin, D.D. (1996). Explaining interethnic cooperation. American Political Science Review 90: 715–735.
Freeman, R.B. and Lindauer, D.L. (1999). Why not Africa? NBER Working Paper 6942.
Gallup, J.L., Mellinger, A.D. and Sachs, J.D. (1998). Geography and economic development, NBER Working Paper 6849.
Hall, R.E. (1988). Intertemporal substitution in consumption. Journal of Political Economy 96L 330–357.
Hirshleifer, J. (1988). The analytics of continuing conflict. Synthese 76: 201–233.
Johnson, S., McMillan, J. and Woodruff, C. (1999). Property rights and finance. American Economic Review 92: 1335–1356.
Jones, L.E. and Manuelli, E. (1990). A convex model of equilibrium growth. Journal of Political Economy 98: 1008–1038.
Keefer, P. and Knack, S. (1995). Institutions and economic performance: Cross-country tests using alternative measures. Economics and Politics 7: 207–227.
Keefer, P. and Knack, S. (1997). Why don't poor countries catch up?: A cross-national test of institutional explanation. Economic Inquiry 35: 590–602.
Lancaster, K. (1973). The dynamic inefficiency of capitalism. Journal of Political Economy 87: 1092–1109.
Lane, P.R. and Tornell, A. (1996). Power, growth, and the voracity effect. Journal of Economic Growth 1: 213–241.
Lucas, R.E., Jr. (1987). Models of business cycles. Yrjo Jahnsson Lectures. New York: Blackwell.
Lucas, R.E., </del>Jr. (1990). Supply-side economics: An analytical review. Oxford Economic Papers 42: 293–316.
Lucas, R.E., Jr. (2000). Inflation and welfare. Econometrica 68: 247–274.
Masters, W.A. and McMillan, M.S. (2001). Climate and scale in economic growth. Journal of Economic Growth 6: 167–186.
Mauro, P. (1995). Corruption and growth. Quarterly Journal of Economics 110: 681–712.
Ogaki, M. and Reinhart, C.M. (1998). Measuring intertemporal substitution: The role of durable goods. Journal of Political Economy 106: 1078–1098.
Ogaki, M., Ostry, J.D. and Reinhart, C.M. (1996). Saving behavior in low-and middle-income developing economies. IMF Staff Papers 43: 38–71.
Pritchett, L. (1997). Divergence, big time. Journal of Economic Perspectives 11: 3–17.
Rodrik, D., Subramanian, A. and Trebbi, F. (2002). Institutions rule: The primacy of institutions over geography and integration in economic development. NBER Working Paper 9305.
Scully, G.W. (1988). The institutional framework and economic development. Journal of Political Economy 96: 652–662.
Shimomura, K. (1991). The feedback equilibria of a differential game of capitalism. Journal of Economic Dynamics and Control 15: 317–338.
Svensson, J. (1998). Investment, property rights and political instability: Theory and evidence. European Economic Review 42: 1317–1342.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Lindner, I., Strulik, H. Why not Africa? – Growth and Welfare Effects of Secure Property Rights. Public Choice 120, 143–167 (2004). https://doi.org/10.1023/B:PUCH.0000035861.42402.f8
Issue Date:
DOI: https://doi.org/10.1023/B:PUCH.0000035861.42402.f8