Property Rights, Political Conflict, and Economic Development

Property Rights, Political Conflict, and Economic Development

Marcus J. Kurtz

Principal Investigator: Marcus Kurtz, Department of Political Science

Property rights are generally seen as a necessary condition for economic development and domestic security. According to this narrative, violent conflict arises where governments cannot resolve competing claims to territory, and economic stagnation sets in where governments can arbitrarily seize assets. Where property ownership is clearly defined and enforced by the state, political stability and economic development are the result.

This line of thinking is unquestioned across much of social science – but is it true? Marcus Kurtz tests this assumption by examining the relationship between property rights and political and economic outcomes in four very different countries: Germany, Chile, South Africa, and Argentina.

To structure his inquiry, Kurtz places these four case studies along two axes:
• Social property arrangements: Do owners have the right use property in whatever way they see fit, or do they have certain responsibilities to other stakeholders such as neighbors or employees?
• Security of enforcement: Does the government effectively enforce property laws regardless of whether the laws favor owner rights or owner responsibilities? Or are laws regarding owner rights and responsibilities broken without repercussions?

Using this classification, Kurtz arranges his four case studies as follows:

    Social Property Arrangements 
    Owner responsibilities emphasized Owner rights emphasized
Security of enforcement  High Social property system
• Germany

Liberal property system
• Chile
• South Africa for whites, pre-1994

Low Politicized property system
• Argentina, post-1945
Oligarchic property system
• South Africa for non-whites, pre-1994






Preliminary evidence from Kurtz’s analysis shows that strong property rights, exemplified by the liberal property systems of Chile and white South Africa under Apartheid, may be the result of political stability and economic development rather than the cause. At the least, strong property rights are just one road to political stability and economic development, but not the only road.

Consider the case of Argentina, one of the wealthiest countries in South America despite a history that includes waves of nationalizing and privatizing property and the near collapse of the political party system. In Apartheid South Africa, property rights for whites rested on the sustained exploitation of non-white property and labor. Meanwhile, German industrialization was founded on radical definitions of property ownership and redistribution of assets.

A grant from the Mershon Center allowed Kurtz to do field research in South Africa. He will using the findings to apply for external grants for more extensive data collection, write a series of academic articles, and ultimately publish a book on property rights, political stability, and economic development.

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