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Fabbri: The Double Dividend of Property Institutions

Dec 16, 2021 | 06:00 PM

Marco Fabbri

University Pompeu Fabra & Barcelona GSE & Amsterdam Center of Law and Economics

16 December 2021, 06:00 p.m. (register here for reminder/calendar entry or join directly here)

Physical and virtual event. Proof of CoViD vaccination or recovery required for physical attendance.

Why are impartial institutions such as formalized property rights so important for the 6 emergence of impersonal trade? Previous literature has stressed the role of such institu7 tions in providing third-party enforcement to shield strangers from locals’ opportunism. 8 We document the existence of a second mechanism based on the expressive function 9 of formalized property rights and we study their role in coordinating respect for the 10 property of strangers. Ten years after the randomized introduction of formal property 11 rights across rural Benin, we conducted a taking-dictator-game experiment in which 12 participants can appropriate the endowment of an anonymous stranger from a differ13 ent village. Even if enforcement institutions are absent and peer effects are silenced by 14 design, participants from villages where the reform was implemented took significantly 15 less than those in control villages. We further give consideration to several possible 16 transmission channels and show that the introduction of formal property institutions 17 may have an “expressive” function, coordinating expectations around non-conflictual 18 outcomes.

Time & Location

Dec 16, 2021 | 06:00 PM

Boltzmannstraße 3
Room 2213