The Evolution of Property Rights: State Law or Informal Norms?

This paper investigates the factors that have shaped the evolution of property rights institutions. Using a regression discontinuity design, I show that the divergent state laws of Ghana and Côte d’Ivoire have had little effect on de facto property rights institutions. In contrast, the data show that these states’ laws and policies have had large impacts on other economic outcomes. Furthermore, I show that part of the substantial within-country variation in property rights institutions is explained by economic factors. Areas that are more suitable for growing cocoa have a greater prevalence of land transfer rights. My findings highlight the importance of nonstate sources of norms and show that these norms do, to some extent, evolve to accommodate the changing needs of society.