Evaluating Alternative Measures of Institutional Protection of Private Property and Their Relative Ability to Predict Economic Development

A growing body of research suggests that private property rights are an important determinant of economic development. This paper assesses five commonly used measures of property rights and their relative ability to predict economic development. The International Country Risk Guide risk of expropriation and World Governance Indicators rule of law measures, as well as property rights indices from the Fraser Institute and Heritage Foundation, are all positively and robustly associated with GDP per capita. Polity IV's executive constraints measure has a statistically and economically weaker impact. This paper also addresses the methodological strengths and weaknesses of each measure to guide researchers in selecting an appropriate measure for empirical studies.