Property Rights, Democracy and Economic Growth

Abstract

In attempting to identify institutional factors that influence a nation's per capita growth rate, scholarship in political science has focused almost ex clusively on differences in political regimes. This article argues that if we are interested in understanding why some nations grow faster than others, then we must redirect our inquiry and focus on property rights. Using new measures for property rights protection and democracy, and building on an endogenous growth model, this study presents the first approximation of the relationship between property rights, democracy, and economic growth. These relationships are tested using cross-national panel data from 1960-90. The evidence supports two conclusions: (1) economies of na tions that protect property rights grow more rapidly than those of nations that do not protect property rights; and (2) the nature of a political regime influences economic growth indirectly through its commitment to prop erty rights.