Property Rights and Economic Development: Two Views

The study aims at demonstrating the core principles to be implemented for protected transactions in developing and transitional countries to trigger economic development. Two approaches are discussed which claim having demonstrated that the institution of property is the most important source of economic activity: (i) the theory of property rights or new institutional economics and (ii) the property theory of the economy or property economics. Both schools, and (iii) reform programs of multilateral institutions based on the schools' approaches, are analyzed from the viewpoint of the dichotomy between property and possession. Contents Abstract Directory Introduction Part I: The theory of property rights or new institutional economics The fundamentals of new institutional economics The "naive" theory of the emergence of private property rights: Armen A. Alchian and Harold Demsetz The political theory of the emergence of private property rights: Douglass C. North The fundamental flaw in new institutional economics: The missing distinction between property and possession Part II: The property theory of the economy or property economics Possession and property: Physical use of resources in mere production systems versus business operations of an economy The rise and fall of collateral and own capital in the history of economic thought The property theory of interest and money: Gunnar Heinsohn and Otto Steiger The approaches to property by Hernando de Soto, Tom Bethell and Richard Pipes Part III: Analysis of reform programs of multilateral institutions The property reform programs of the "Instituto Libertad y Democracia" (ILD) The social finance programs of the International Labour Office (ILO) A shift in the World Bank's thinking on IDA development programs? The limitations of analyzing reform programs Summary References Index