Paper presented at Baylor University- 10/24/08 Comments Welcome The Role of Property Rights in Economic Development that Benefits the Poor

In many countries, insecure property rights hinder economic development and limit economic opportunities for the poor. Central government efforts to create formal systems of private property rights, however, often provide few benefits to low income people, sometimes increasing the number experiencing extreme poverty. To promote economic development that benefits the poor, formal property rights systems must develop in a way that is consistent with informal rights. Recent research in the new institutional economics points to the vital role played by informal institutions in influencing the effectiveness of changes in formal institutions1. The conclusions this article reaches are based largely on a review of the relevant literature from institutional economics, and a review of the existing research on the consequences of property rights reforms imposed by central governments and how those changes interact with changes in informal institutions. This paper begins with a discussion of arguments in favor of government imposed property rights reform. Both economic theory and the historical experiences of high incom