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Property rights are one of the very most important things in encouraging economic growth. The more a government protects property rights, the more likely an economy is to grow. The reason for this is that people will be much more likely to obtain property and to improve it if they know their property rights will be protected.
Imagine that you live in or are thinking about investing in Venezuela. You would notice the fact that the Chavez government has been willing to expropriate the property of various firms. Knowing that this could happen to you, you would be much less likely to want to invest your time and money in building a firm. When people feel this way, they are much less likely to engage in the sorts of entrepreneurial activities that are needed to make an economy grow.
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