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- W2184662355 abstract "We demonstrate that property-right-securing legal institutions endogenously emerge in highly productive economies and that secure property rights promote partnership contracts correcting inefficient land allocation between landowners and farmers. By contrast, in less productive economies, property-right-securing legal institutions do not emerge and partnership contracts are not formed, implying that nobody benefits from cooperation in production. In economies with intermediate productivity levels, multiple Nash equilibria exist. In this case, although property-right-securing legal institutions are established in the high Nash equilibrium, such institutions are not found in the low Nash equilibrium. The total output in the high Nash equilibrium is greater than in the low Nash equilibrium, implying that the high Nash equilibrium Pareto dominates the low Nash equilibrium. We also prove that as institutional quality improves, inequality within an economy is reduced. All these outcomes are consistent with the stylized facts obtained from cross-country observations." @default.
- W2184662355 created "2016-06-24" @default.
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- W2184662355 date "2013-01-01" @default.
- W2184662355 modified "2023-09-26" @default.
- W2184662355 title "How Do Legal Institutions Emerge" @default.
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