Accessibility links

Breaking News

Report Finds Property Rights Essential for Economic Growth

The new edition of the second annual International Property Rights Index says physical and intellectual property rights are necessary for economic growth. From London, Tendai Maphosa has more in this report for VOA.

The 2008 International Property Rights Index was compiled by the Property Rights Alliance, a U.S.-based non-partisan international advocacy organization intended to help protect physical and intellectual property rights.

In its report, the Alliance says property rights contribute to increased levels of stability and provide people with the knowledge and comfort that their property will remain theirs. Its 2008 index focuses on three areas, legal and political environment, physical property rights, and intellectual property rights.

Alec van Gelder of the International Policy Network contributed to the report. He told VOA that property rights are key to economic growth.

"I think that an environment where property rights, both physical and intellectual are secure and legally enforceable and clearly defined greatly expands the incentives that are required for businesses to make everyone's lives better, to develop new products, deliver new services in a sustainable way," van Gelder said. "Those incentives are crucial for keeping the global economy growing."

Of the 115 countries ranked this year, Northern European countries are once again at the top end of the index, with Finland adjudged the best protector of property rights. Norway is second along with Denmark, The Netherlands, and Germany. Britain shares sixth position with three other countries. The United States is ranked 19th. The worst observer of property rights is Bangladesh at 115th. Zimbabwe is second to last at 114th.

IPN's van Gelder said even resource poor countries could do well when property rights are guaranteed.

"All you have to do is look at the countries where there have been very few natural resources that are currently wealthy," van Gelder said. "Countries like Singapore and South Korea are phenomenally wealthy precisely because they strove to protect the property rights that are now contributing to their economic growth."

He also said that the absence of property rights lie at the heart of many problems, from poverty in rural India to exploitation in Colombia. He said the current troubles in Kenya were in part ignited by the theft of property rights by the political elite. This, he says, has caused resentment.

The compilers of the index hope it will help under-performing countries in their efforts to develop robust economies by emphasizing sound property law.