Property Economics versus New Institutional Economics: Alternative Foundations of How to Trigger Economic Development

摘要

What are the core economic principles to be implemented for protected transactions in developing and transitional countries to trigger economic development? In recent decades, two approaches have been developed which claim to answer this question: (?) the theory of property rights, or new institutional economics, originating from Armen Alchian (1977) and Harold Demsetz (1967; see also Alchian and Demsetz 1973) and developed by Nobel laureate Douglass C. North (1973, with Robert P. Thomas; see also North 1981 and 1990) and (ⅱ) the property-based theory of the economy, or property economics, developed by Gunnar Heinsohn and Otto Steiger (2004, 2003, 2006a, b, and d; see also Stadermann and Steiger 2001 and Steiger 2006a), with similar contributions by Hernando de Soto (1989 and 2000), Tom Bethell (1998), and Richard Pipes (1999). The analysis of the institution of property forms the core of both schools. They maintain that property is the most important source of economic activity.