Download Institutions & Property Rights: Role in Economic Development and more Slides Development Economics in PDF only on Docsity! Lecture 20: Institutions I Docsity.com Institutions I: Plan for the lecture � What is an ‘institution’? � Discussion of film � Discussion of reading � 2 papers covered in reading: � Besley (1995) � Field (2003) Docsity.com Discussion of Film: Questions � What does this film have to say about the importance of property rights? � In this setting, are property rights good or bad for economic development? Docsity.com Discussion of Reading: Mooya and Cloete (2009) I � Article largely concerned with ‘land titling’—movement (usually associated with Hernando de Soto) to formalize the rights that poor (typically urban) citizens have to their land. � What are land rights? Docsity.com Discussion of Reading: Mooya and Cloete (2009) I � Article largely concerned with ‘land titling’—movement (usually associated with Hernando de Soto) to formalize the rights that poor (typically urban) citizens have to their land. � What are land rights? � The right to sell, use or bequeath Docsity.com Evidence for These Mechanisms � There is plenty of macro-scale, cross-country evidence for the importance of property rights in long-run economic development. The next lecture, “Institutions II”, will be full of this. � But unfortunately, hard evidence ‘on the ground’ is hard to find. � Why is this? � What kind of study would you like to perform that would contribute to our knowledge about the effects of property rights in developing countries? Docsity.com Besley (1995) I � One of the first empirical papers to confront this topic. � Studies 2 regions in Ghana in which the rights that farmers enjoy on their lands are varied � Traditionally, all land rights (in these regions) were ‘communal’: village chiefs would determine what a farmer could do with his land. � More recently, there was a trend towards more individualistic notions of property: the farmer could do what he wanted with his land. � Ghana was in transition at the time of Besley’s study. � So much so, that individual farmers would have communal rights to some of their plots and individual rights to the rest of their plots. Docsity.com Besley (1995) II � Besley exploits this variation within-farmers (ie across plots each farmer owns) to study whether farmers do actually invest more on the land they have individual rights to. � What could be some of the problems with doing so? Docsity.com Besley (1995): Finding III � The types of rights in place (eg right to sell, right to use, right to bequeath) doesn’t seem to matter. � This is not to be expected under the ‘gains from trade’ view. Why not? Docsity.com Besley (1995): Finding IV � Rights appear to be somewhat endogenous—the rights themselves evolve according to the actions that farmers take. � What kinds of actions could a farmer take to improve his rights over the land he occupies? Docsity.com Field (2003) I � This paper studies the ‘protection mechanism’—when occupants have better rights to their land, they may spend less time on socially wasteful activities like protecting their land. � Note that this just transfers the activity of protection from individuals to the state. Why might this be more efficient? Docsity.com
