Property rights, the conditions for enterprise and economic growth
The aim of the project is to analyze the relationship between property rights, the conditions for enterprise, and economic growth. Special and unique emphasis is put on the intermediate variable, the conditions for enterprise, on how property rights affect firms and how this translates into effects on aggregate economic performance. The project is funded by the Marcus and Amalia Wallenberg Memorial Fund Foundation.
More specifically, a company is a legal person that may hold
assets and enter into contracts, just like a private person. Behind
the legal person are people of flesh and blood, whose behaviour is
affected by the rules that determine the limits and conditions of
the use of company assets. The limits and conditions of the use of
assets of various kinds is exactly what property rights express.
How property rights are designed can therefore be assumed to be of
great importance for both companies and individuals as well as for
society as a whole. The purpose of this project is to highlight how
the design of property rights affects companies and
entrepreneurship and, by extension, economic growth and
Economic institutions like property rights are primarily
important in that they enable a dynamic market process and in that
they affect the incentives of individuals and companies. Nowadays,
not many question private ownership on a general level, but there
are plenty of particular ways proposed to change the rules that
define it. Familiar examples include restrictions on differentiated
vote shares, restrictions on the usage of bonuses and gender quotas
for company boards. Moreover, restrictions on private property
rights may involve issues such as: Should capital flow freely
within and between countries? Should an employer be free to make
agreements with employees on the working conditions? Should a
shopkeeper be free to choose the opening hours? Should a person who
introduces new innovations, under high risk, be allowed to keep
most of the possible profit? These are important normative issues
that need to be discussed and settled in public discourse on
the basis of scientific research on the effects of various
ways of designing property rights.
For more information, contact Niclas Berggren.