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ENCLOSURE
Author(s) -
TAUB BART,
ZHAO RUI
Publication year - 2009
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2007.00119.x
Subject(s) - patience , property rights , capital (architecture) , economics , physical capital , capital accumulation , microeconomics , market economy , human capital , philosophy , theology , archaeology , history
We model the development of property rights as an endogenous process, driven by capital accumulation. Property rights internalize the portion of the return to capital that is otherwise treated as common property. This enclosure further encourages capital accumulation and sustains economic growth. We view effective property rights as multilateral agreements among agents that can only be implemented and sustained when agents are sufficiently patient. Patience is determined by the marginal product of capital; the marginal product of capital shrinks, and consequently patience increases, as capital grows. Hence, property rights can be established only when an economy is rich enough. ( JEL P14, O11, C73)