Breaking News
Help the Third World — Protect Property Rights
The Property Rights Alliance releases its annual International Property Rights Index today.
Haiti recently was devastated by a massive earthquake. Yet social desolation in Haiti long preceded the natural disaster. The tragic Caribbean nation does not have the economic freedom and legal stability necessary to build a prosperous economy.
Much goes into the process of economic development. One of the most important factors is the protection of property rights, both physical and intellectual. Today the Property Rights Alliance (PRA) released its latest annual International Property Rights Index (IPRI), written by Victoria Strokova, with contributions from many others. Countries which do the most to strengthen property rights have the best economic results.
Prosperity is not everything, of course. As Nobel Laureate Milton Friedman observed: “The preservation of liberty, not the promotion of efficiency, is the primary justification for private property. Efficiency is a happy, though not accidental, by-product.”
Americans enjoy believing that the U.S. is the most market-oriented society on earth. But the U.S. is not number one on general economic freedom indexes, though it remains in the top ten. America doesn’t even fall within the top ten on protecting property rights. The U.S. was 15 — not bad out of the 125 countries ranked, but nevertheless disappointing given America’s freedom heritage. Here, as in so many areas, the U.S. is losing its position as the global leader in promoting individual liberty and limited government.
Property rights always have been important. Barun S. Mitra, head of India’s Liberty Institute, who wrote the foreword to the latest IPRI ratings, observes that “A modern economy is built on clear ownership of property whether tangible or intangible — be it land, shares, or intellectual property.” Property rights promote justice, allowing people at all economic strata to enjoy the fruit of their labor. More important from the economic standpoint, property rights create an extraordinarily powerful incentive to raise and use resources productively and efficiently.
Alas, the challenge to economic freedom has grown in the aftermath of the financial crisis. Notes Kelsey Zahourek, the PRA’s executive director, “many people across the globe are continuing to see their basic property rights stripped away from them in the shadow of a global economic crisis.”
No surprise, the greatest challenge faces the poorest nations. Writes Mitra:
While world attention is focused on the economic situation in the U.S. and other developed countries, the situation also underscores the perpetual economic crisis in many developing nations and poor communities. In these societies, recognition of property rights and respect for ownership are weak, and a title document is often non-existent. Typically, these are places where informal economic activities dominate. But the consequences are very similar in both — lack of credit. Ironically, the problem of the poor is not that they do not have assets; instead, they are unable to effectively to capitalize their assets. The present crisis demonstrates that the rich are equally vulnerable to being unable to capitalize their assets if they lose their connection to the real economy and the clear titles that it requires.
Protecting property rights take many forms. One aspect is the legal and political environment. At issue are judicial independence, rule of law, political stability, and control of corruption. Notes the PRA report: “Even the most comprehensive de jure property rights cannot be enforced unless a strong rule of law and independent judiciary are present to enforce them.” Political instability and corruption make it harder to acquire and preserve private property, and to benefit from using and improving private property. These factors typically are most lacking in poor Third World states.
Defending physical property rights is one leg of the property stool. One aspect is the strength of independent institutions, most notably the judiciary, standing against attempts to seize private assets. Other aspects include the ease of registering property and borrowing money. Explains the PRA: “access to a bank loan without collateral serves as a proxy for the level of development of financial institutions in a country.”
Another, increasingly important aspect of property is intellectual property rights. Today, with economies increasingly dependent on information and other new technologies, intellectual property is an increasingly important aspect of economic growth and prosperity. IPRI looks at both de jure and de facto protection for intellectual property, as well as strength of patent law and level of copyright piracy.
Useful information about many countries is lacking, which limits the number of states covered by IPRI (such as Haiti, which is absent). However, the 125 nations listed account for 97 percent of global GDP. And the rankings, if not exact, are broadly accurate in assessing national commitments to stronger property rights regimes.
The best performers are the Scandinavian states. Although these governments typically spend more than Washington, they also often regulate with a lighter, more efficient, and less corrupt hand.
In the case of property they tend to be far more protective of individual liberty. The top ten are Finland (number one for the fourth year in a row), Denmark, Sweden, Netherlands, Norway, Switzerland, New Zealand, Singapore, Australia, and Austria. No surprise, all of these nations enjoy productive and prosperous economies.
At the bottom are Bosnia and Herzegovina, Nicaragua, Paraguay, Bolivia, Burundi, Chad, Zimbabwe, Venezuela, Ivory Coast, and Bangladesh. Obviously, much is wrong with these nations, as well as others that rank poorly on the IPRI. However, unless they are able to remedy their flawed property rights regimes, they are unlikely to successfully develop even if they meet their other challenges — end external wars, pacify internal conflicts, overturn dictatorships, and so on.
About the Author
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).
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Roy| 2.23.10 @ 7:40AM
Sweden is the highest in terms of property rights...?
Do they know this and if so what are they doing to change it, seeing as how they constantly call themselves "socialist"?
Copyleft| 2.23.10 @ 8:43AM
Interesting, isn't it? And yet, every time someone points to Scandinavia as a worthwhile model for the U.S. to learn from, the loons of the far right scream "Socialism! They're bad and worthless! They can't possibly do anything right because they have NATIONAL HEALTHCARE and thus, no freedom!"
Irony's fun!
Petronius| 2.23.10 @ 3:50PM
There's two kinds of everything in this world, the best, and all the rest. Once the toughest warriors in the northern hemisphere, the nordic people are now doormats like the rest of europe. With ignorant, indolent, incompetent leadership, elected by an infantile populace, it stands to reason why they have the highest suicide rate on earth.
So do yourself and the rest of us a big fat favor Copyleft. Since you refuse to compete and want others to hold your hand, move to Stockholm and sponge off of them. The U.S. Government is not your mommy. And the productive people of the U.S.A. do not owe you a living!
bluelightbrigade| 2.24.10 @ 2:40PM
+1
JimH| 2.23.10 @ 7:47AM
Secure property rights under law is a necessary precondition for economic success and individual liberty regardless of the actual system of government.
Jackie | 7.7.10 @ 2:42AM
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.
Al Adab| 2.23.10 @ 10:24AM
Hernando De Soto, the Peruvian economist, writes in his book, "The Mystery of Capital" that the major problem within the "third world" is the lack of property rights. It is the basis of wealth and advancement and the key to improving the lives of people around the world. Well worth the read.
La Realidad| 2.23.10 @ 1:54PM
Yes, good book and well worth the read.
Philip | 7.7.10 @ 1:52AM
"The hour of capitalism's greatest triumph," writes Hernando de Soto, "is, in the eyes of four-fifths of humanity, its hour of crisis." His attitude and being positive in all sources made him success.
Yosemeti Sam| 2.23.10 @ 10:59AM
Re column - "Is our Children Learning?"
To American Spectator:
Appears I strike Liberal/Leftist nerves.
Do you or do you not validate email addresses
with posts?
You let an asshole - pardon the shorthand -
speak as if he were me.
Get your AS act together!
Do you have hacker firewalls - at all?
If not - moving on!
AS Webmaster - what's up with this compromise?
Roy| 2.24.10 @ 2:08AM
No, they (obviously) don't. Extremely vulnerable to trolling.
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nats| 2.23.10 @ 6:08PM
I find it curious that America is at war for the "rights" of the third world countries all the while the same "rights" are being distroyed from within at home.
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rainbow anarchocapitalist77| 2.25.10 @ 1:30AM
I guarantee, of those countries that prey on the property rights of the people, that all of them got foreign aid from one of the OECD countries.
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Peter Jackson | 5.25.10 @ 1:57PM
Yes, it's a big issue right now to help the thirld world in terms of property, we will see what kind of actions going to be made on this, if any!
Tonya Garcia | 6.27.10 @ 11:01AM
Taking concrete actions to help the third world. we are going the wrong way. We now know it is destroying us. So moving fast and take an appropriate actions.
Larry J. Ladd | 6.10.10 @ 12:22PM
"Property rights create an extraordinarily powerful incentive to raise and use resources productively and efficiently." - It is indeed true, property rights is important.
Texas Lawyer | 6.22.10 @ 12:19PM
Property rights are under assault here in the U.S. on a daily basis. It is important for people to not take these 'rights' as assumed and know that they are slowly being eroded and one must stand up to the slippery slope arguments and regulations that are slowly stealing them away. Great, eye opening, post.
Janie J. Montgomery | 6.22.10 @ 12:51PM
and yet it is still considered as big issue. Others might take advantage of the property rights and here in US most of us "Americans" are pretty aware that we are considered as the most market-oriented society on earth and yet still America doesn't even fall within the top ten on protecting property rights.
Diener James | 6.27.10 @ 10:01AM
Justice always prevail, we'll wait for that right time.
Fredalyn Juper | 6.30.10 @ 10:54AM
Private property rights are not absolute. I cannot insulate a resource’s use from the influence of market values of all future generations.
Gary | 7.8.10 @ 11:36AM
It may be under the control of a single person or by a group; each has its own responsibility, own risk, and decisions.
danrhodes | 7.10.10 @ 3:15AM
Diener, I'm not sure justice does always prevail to be honest.
Janette | 7.15.10 @ 4:33AM
Like the third estate, wrote Sauvy, the third world is nothing, and it "wants to be something." The term therefore implies that the third world is exploited.
Marcus | 10.10.10 @ 10:41PM
Intellectual property rights is the most unprotected property in third world countries. Pirated movies, software and publications are so rampant that it is normal to use the pirated copies than the legitimate ones.
Mark | 10.12.10 @ 7:26AM
Most of the people in the third world are poor and so do not have the capacity to pay for the properties which are relatively expensive. Neither are they capable to spend for the process and documentary requirements of legitimizing ownership over property.
sell my house quickly | 11.10.10 @ 10:55PM
You're right mark. Incapability of many people in the third world countries to afford legitimate ones causes them to use pirated ones. Well imposition of property right laws "ABSOLUTELY" in these countries is the only solution. Piracy affects economy too, so tolerating piracy worsen third world countries economic status.
Free Job Advertisement Site | 11.22.10 @ 7:43AM
Third world countries really tolerated the piracy. Do they think it can help them? Businesses will not gain profit because of piracy such as movie industries.
Love Tea | 12.5.10 @ 9:57AM
This article needs to be out there on twitter more powerful, thanks for opening my eyes!
Tongkat ali | 12.5.10 @ 10:07AM
Just read your tweet Love tea, its getting retweeted as we speak! worthy cause!
Thanks
Horny Goat Weed | 12.6.10 @ 12:05PM
Thats quite a heavy topic, but well debated both by yourself and some of the commenters here, the problem with a lot of these places is that even when they claim to take a democratic approach to things it never is really democratic, I know that counts for most "democracy's" but more so for such places as this.
اخبار الرياضة | 12.28.10 @ 1:55PM
nice man
beziers airport car hire | 3.30.11 @ 3:45PM
I think the Swedish model is proven to work over many years. They have a high standard of living and low crime.
Nerds Next Door | 4.1.11 @ 12:22PM
What's interesting is that many people don't know how involved we still are in Haiti. We are "helping" in many aspects of running that government now. So, what does that mean for the future of Haiti? Hard to say.
Joe| 5.7.11 @ 11:22AM
People don't like using pirated copies. Eventually those who use those systems, once they improve their lifestyle, would move on to get legitimate copies.
Joe
http://www.wildplanettours.com/
Jackie the Dallas Handyman | 5.12.11 @ 2:52AM
Property Rights applied to Third World Countries is a handful. You wouldn't know where to start counting in regards to matters of either the act of its violation or implementation. Someone has to give a lot of credit to the people running these type of countries. But, point taken, as quoted on your post.. this really is the issue here: Ironically, the problem of the poor is not that they do not have assets; instead, they are unable to effectively to capitalize their assets. So, where to start?
casino alennus | 6.10.11 @ 10:40AM
The ink was barely dry on our last post with the full tally, when another 7 bit the dust, pushing the total expected FDIC expense almost another half billion, breaching the $17B level. Also, the individual failures have exceeded 100,
Lafsan | 6.14.11 @ 1:17PM
What's interesting is that many people don't know how involved we still are in Haiti. We are "helping" in many aspects of running that government now. So, what does that mean for the future of Haiti? Hard to say.
Susan | 6.14.11 @ 1:17PM
This article needs to be out there on twitter more powerful, thanks for opening my eyes!
johncarcar | 7.28.11 @ 8:12AM
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Headhunter | 8.3.11 @ 12:28PM
This actually comes as no surprise to me. "The land of the free" is nothing but a slogan these days. There are so many restrictions and rules and regulations everywhere.
Chris Dunken | 8.23.11 @ 11:14AM
Participation in helping the 3rd world countrys should be a priority. They are smart people just unable to have a infustructure like the rest of us. So why shouldnt we help them?
stacey schiller | 10.18.11 @ 6:00AM
Well last time i visited this blog i found some real nice topics. This is another great topic i missed. Thanks atlanta property management
jane | 10.21.11 @ 12:56PM
Property rights should be universal, including our liberated, highly educated United States. Choices are what we need to stand up for, not outcome of choices.
Headhunting | 12.28.11 @ 5:19PM
Great read - just retweeted :)