Yazar : Jahangir Saleh

Property rights institutions and investment

Saleh examines the channels through which alternative property rights institutions affect investment. These institutions are defined by a society's enforced laws, regulations, governance mechanisms, and norms concerning the use of resources. The author uses a transaction cost framework to analyze the incentive impact of various types of property rights, liability rules, and rules regarding contracts. He uses this framework to discuss the legal and cultural conditions necessary for the formation of productivity-enhancing organizations and the proper role of government in providing the infrastructure for private investment. The author also examines the role of cultural and religious norms in determining the economic effectiveness of legal systems, with a focus on Islamic countries. Finally, he evaluates empirical approaches used to discover the specific ways property rights structures affect investment and growth. This paper--a product of the Office of the Senior Vice President and Chief Economist, Development Economics--is part of a larger effort in the Bank to understand the institutional requirements for improving investment climate in developing countries.