Weak and non-existent systems of property rights play a significant role in undermining economic growth. A primary goal for policymakers should be building and bolstering robust systems to protect property rights. This includes definition of rights, including for intellectual property, rule of law and independence of the judiciary.
The economist Hernando de Soto has documented how weak titling systems in developing countries yield massive amounts of “dead capital.” When poor people do not have formal ownership of their homes, farms and land, they cannot utilize that capital to build businesses and escape growth traps. According to his research, billions of dollars of capital is waiting to be unlocked and tapped in developing countries if formal titling and property systems can be developed.
Private property systems, including intellectual property, also undergrid those economies that utilize high technology and reward innovation and which, appropriately, also drive global growth. These economies serve as models for developing and middle-income countries and point the way for sustained growth that raises living standards and gives hope to the poor. Those middle-income countries that aspire to continue to climb the development ladder must create the legal structure and which will attract and harness intellectual property in order to attract the capital and technologies which are essential if their economies are to flourish.
Despite the empirical record which testifies to the necessity of systems which recognize and protect private property rights, activist NGOs are either largely silent about the importance of property rights or are ideologically hostile to the concept.. World Growth was formed to argue the case for property rights and to focus attention on the role private property plays in elevating poor countries out of poverty and fostering continuing growth.
The indifference and hostility towards the concept of private property among those whose professed concern is to raise living standards is disturbing. These systems are often as fragile as they are vital to successful societies. Vested interests, corrupt bureaucrats and other parasitical actors in underdeveloped countries frequently resist building private property systems. There is a sad irony at play: most NGOs flourish in wealthy societies that are stable and prosperous precisely because of the property systems that sustain them, yet a good number resist or criticize efforts to broaden and deepen property rights around the world.
Given these already formidable obstacles, advocates of private property need all the help they can get. World Growth’s ambition is to provide such help.