How do property rights encourage economic development? How do property rights laws help or not help?

Expert Answers

An illustration of the letter 'A' in a speech bubbles

Location, location, location! Property rights definitely preclude and influence economic development, as gentrification is a pivotal aspect of changes that occur in America today. Gentrification is the transformation of lower-income districts into middle-class ones. These changes occur as property gains value due to shifting demographics and economic realities.

Historically, low-income...

Unlock
This Answer Now

Start your 48-hour free trial to unlock this answer and thousands more. Enjoy eNotes ad-free and cancel anytime.

Start your 48-Hour Free Trial

Location, location, location! Property rights definitely preclude and influence economic development, as gentrification is a pivotal aspect of changes that occur in America today. Gentrification is the transformation of lower-income districts into middle-class ones. These changes occur as property gains value due to shifting demographics and economic realities.

Historically, low-income areas have found themselves at the mercy of unfair zoning laws and restrictions that, in effect, segregate in accordance with property value. These zoning laws affect where individuals are zoned for K–12 schools. In that way, these zoning laws definitely have an effect on economic development, because access to a quality K–12 education affects access to college education, which in turn affects access to higher income later in life. Effectively, a lack of access to quality K–12 education contributes to socioeconomic stagnation, maintaining generational poverty.

Approved by eNotes Editorial Team
An illustration of the letter 'A' in a speech bubbles

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.

Approved by eNotes Editorial Team