Property Rights and Economic Progress
Does a government definition of property rights promote economic progress? A recent paper suggests yes:
Cadastres—records of landownership—provide governments with the information necessary to tax and clarify ownership, making transactions more efficient. Cadastres underpin the security of ownership and enable land and credit markets to function at a national scale. As such, adopting or improving cadastres may impact a country’s economic growth. …
Our research finds that cadastres consistently contribute to economic growth. Specifically, between 1950 and 2015, a transition from no cadastral system to a full cadastre … was associated with an immediate 2.86 percentage point increase in the level of gross domestic product (GDP) per capita. …
Identifying the effect of cadastral reforms on economic growth is challenging. Governments may introduce cadastres as part of a large package of reforms or after a crisis when GDP levels are already recovering. … Thus, we cannot rule out the possibility that our estimate of the impact of cadastral reforms may, to some extent, capture general recovery effects from crises.
Nevertheless, these results support the libertarian claim that defining property rights enhances economic growth.
This article appeared on Substack on October 9, 2024.