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Title:Insecure property rights and growth : the roles of appropriation costs, wealth effects, and heterogeneity PDF Logo
Authors:van Long, Ngo
Sorger, Gerhard
Issue Date:2004
Series/Report no.:CESifo working papers 1253
Abstract:We extend the model of insecure property rights by Tornell and Velasco (1992) and Tornell and Lane (1999) by adding three features: (i) extracting the common property asset involves a private appropriation cost, (ii) agents derive utility from wealth as well as from consumption, and (iii) agents can be heterogeneous. We show that both an increase in the appropriation cost and, when appropriation costs vary across agents, an increase in the degree of heterogeneity of these costs reduce the growth rate of the public capital stock. We also show that, in the interior equilibrium, the private asset can have either a lower or a higher money rate of return than the common property asset.
Subjects:corruption
property rights
growth
appropriation cost
JEL:O40
C73
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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