Question

Why are property rights the key for economic progress? Please support your answer.

Answer 1

Property rights and their protection is one of the most important attribute which foster the economic development of a nation. Strong property rights and regulations to sefeguard those help the nation to develop entrepreneurship sprit within the nation and that sprit helps creating enterprises which enable and support economic development of the nation. Property right provide the rights as to how the resource is used and when this is strictly enforced it enables the individual to think logically about the benefit and cost in the manner that resource is utilised and basis the rational person hypothesis we can assume that the resource will be utilised to increase the benefits. The combined effect of this will be to increase the total benefits to the society and in effect fostering development. If the property rights are not there or are not enforced this will increase the infringement of rights and will deincentivise the innovation in the society leading to hampering of technological prowess.