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Endogenous Changes in Property Rights Regime *
Author(s) -
LEONARD DANIEL,
VAN LONG NGO
Publication year - 2012
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.2011.00765.x
Subject(s) - enforcement , property rights , property (philosophy) , economics , capital (architecture) , overlapping generations model , politics , law and economics , power (physics) , public economics , microeconomics , law , political science , philosophy , physics , archaeology , epistemology , quantum mechanics , history
The purpose of this article is to present a model of the endogenous evolution of a society's property rights regime. We use an overlapping‐generations framework in which capital accumulation takes place. Property rights enforcement is costly. Individuals decide collectively in each period the appropriate level of enforcement and pay taxes to finance it. Poor households have less interest in the enforcement of property rights than rich households. We also consider heterogenous households with different tastes. They differ on their choice of law enforcement. As their wealth and numbers evolve, political power may change sides, hence the property rights regime also evolves.