Amity Shlaes devotes her latest Forbes column to the importance of property rights, noting Nobel Prize-winning economist Ronald Coase’s finding that “it matters less who owns something than that it is owned.”
Shlaes also highlights interesting facts associated the 2012 edition of the International Property Rights Index.
Unlike other economic indexes, this one focuses exclusively on property. It relentlessly divides the world into kinds of property rights: physical, legal and intellectual.
The index’s editor and Hernando de Soto fellow, Gaurav Tiwari, ranks 130 nations. The index’s data suggest that countries that respect property rights are wealthier and grow faster than those that don’t. Indeed, the countries scoring in the top fifth of this year’s index have an average per capita income of more than $39,000, twice the average income level of countries in the second-highest quintile. Furthermore, Tiwari’s own regression analysis shows that a one-point increase in a country’s index score correlates to an $8,800 increase in GDP per capita. Countries searching for development solutions would be wise to focus on property rights.
Another important finding: Countries that have high levels of trust, especially English-speaking and Nordic countries, protect property rights.
