« The death of the globalization consensus | Main | What do you do when the markets are down? »

July 14, 2008


Rob (Formerly) In Toronto

Rather interesting formulation of property rights that is. Some would call it a protection racket.

Maybe my sarcasm detector just isnt working at 5:30 am ... I will try more coffee and read the story again.


compared to what?


Dr Rodrik,
Always wanted to this question, but this is probably going to be the most pertinent thread: Have you read Hernando De Soto's "Mystery of Capital"? Do you share most of HDS's premises&conclusions? This seems like a topic you've probably done some serious thought, so I always believed your opinion would be very interesting to hear..


Aqdas Afzal -- Pakistan


This story from the Times highlights a key dilemma from the developing world: state failure.

This story might also provide more evidence that, in the developing countries, it's the state that needs to become more muscular and not let the market dictate the outcomes as there can be a market capture from certain forces -- the mafia, for instance.

A stronger state -- both with capacity and autonomy -- would not only be able to enforce property rights through an impartial legal system but could also prevent certain forces from partaking in market activities. For instance, if the state were strong enough, it could prevent the Taliban from taking part in profit making ventures.

So, ideally, the state should be strong -- not weak, in the shape of an honest broker -- in the developing countries. The process of development in the mentioned countries is a zero sum game. There are winners and there are losers in this process. Only a strong state has the competence to impart losses on losing sections of the society.

Therefore, we need to change the entire extant paradigm related to development. Markets are an efficient way of bringing sellers and buyers together and the reputations of individual sellers and buyers provides the sustainable dimension to this institution. Need I say that the markets in developing countries are inefficient.

We need to assist developing states -- democratic ones, of course -- in developing capacity and autonomy. In other words, we need to "bring the state back in."

Tord Steiro

I have not read "The Mystery of Capital", but I have read "The Other Path". That is a very interesting book, and takes economics a little further than usual, since it focuses specifically on the emergence of extra-legal systems to enforce property rights. However, these extra-legal systems is also organizations that coordinate cooruption, since corruption is necessary for them to have any power.Hence, I belive that these two phenomena goes pretty much hand-in-hand. That is, a failed enforcement of property rights from the state opens up the space for extra-legal systems, which again needs corrupt officials in order to be efficient, thus creating huge incentives for corruption.

This is for property rights, but what if the state fails to enforce social justice? Will we then see extra-legal systems emerge, corrupting state officials, and enforcing social justice as they feel fit? This is in general the same question as above, just in a broader sense. And yes, we will see extra-legal systems for social justice. We may call them mafia, but a range of organizations can be regarded as filling the very same gap in society, such as the Sendero Luminoso, Al-Qaida, ETA, Hamas, UCK, IRA, LTTE, Baader Meinhof, or the Haganah and so one must understand the emergence of these kind of organizations in this sense.

When states fail to fulfill crucial tasks in society, someone else will fulfill them, and usually for the worse of everybody else. In extreme cases such extra-legal systems may overtake the state itself. Hence, the ability of states to carry out these tasks in a way that is percepted as socially just is crucial.

Per Kurowski

No reasons to cheer at all.

It just helps to evidence that the growth rate in the illicit markets currently surpasses the growth rate in the licit ones and so by pure market force, sooner or later we will all be taken over by the mafia and their groupies, where even a Dani Rodrik might be forced to go underground to lecture.

Start preparing you avatar Professor, times will be rough!


"taken over by the mafia and their groupies"
Were we not there already?

"where even a Dani Rodrik might be forced to go underground to lecture"
Who paid De Soto's study? "The other path"

Travertino Rosso from the ME was at one point in history difficult to get.

Property Investing

Very interesting article. Keep up the good work!


Great money making scheme. Now..off to look for a mountain.

Overseas Property

Really interesting read and insite into how other countries although far away, arnt too differernt to ours :).

Jep UK

Sell House Fast

Thanks for the artical....interesting

Key Man Insurance

I had no idea this was going on. Very informative, thanks.

Property in Turkey

Great post. I enjoyed reading thanks.

rado watches

Why is everyone just montblanc watches willing to accept power cuts? Don't you think that patek philippe watches having continious power is your right? If people aren't going to demand rado watches 24X7 power, don't expect anything zenith watches to change. The government needs to look at other sources parmigiani watches of power generation. The only solution is more power panerai watches production. Nothing less.

Property in Turkey

It's really makes me happy to hear these great stories because seeing is believing. I enjoyed reading this post thanks.

Turkish Property

It really makes me happy to hear these great stories because seeing is believing. I enjoyed reading this post thanks.

ghd straighteners

GHD straighteners was kmown as ghd flat iron, which was authorized online seller provides all kinds of hair straighteners,pink ghd,purple ghd,babyliss. By visiting ghd australia , you will find what you want and made yourself more beautiful.If you miss it ,you miss beauty.Buy a piece of ghd for yourself.Come and join us http://www.ghdoutlet-au.com/ to win the ghd iv styler.


Birkenstock was Made in Germany since 1774 . Check out our Birkenstock sandals and Birkenstock shoes including the Birkenstock gizeh,at the lowest regular outlet prices, free shipping and when you put on Birkenstocks. you will feel very comfortable.

Nike Air Jordan

The good news, thank you!

replica rolex paypal

私はアメリカではないので、ブログの記事は、よく書かれて、私はとても好き読み取り、すべての単語の私は非常に理解、ほとんどまだ読んでいないが、私はあなたの資料では、知識を学ぶことを望んでまた、我々は良い友達になることを願って。ありがとうございました! !

who called me

I'd even say that _most_ status rendering research done by economists or Kennedy schooers has little to do with the genuine advancement of social science -- and contributes little of practical value in terms of general knowledge. Most economics involves further development of degenerate research programs, i.e. failed science.


GHD purple is a beautifully wrapped gift set containing limited edition purple GHD IV styler, GHD travel hairdryer,heat resistant purple GHD roll bag,get one for your lover.



I like these articles , democratic countries formulate policies are both team and the interests of the people of power, but the undemocratic countries rarely for the interests of the people, http://www.jerseysky.com it is the sorrow of many democracy, I like the western and northern state policy.

Sell house fast

Great post. Very informative!

jordan shoes

I am happy to find this post very useful for me, as it contains lot of information. I always prefer to read the quality content and this thing I found in you post. Thanks for sharing.

jordans for sale

Thanks a lot for sharing. You have done a brilliant job. Your article is truly relevant to my study at this moment, and I am really happy I discovered your website. However, I would like to see more details about this topic. I'm going to keep coming back here.

jordan shoes

This is a wonderful site. The things mentioned are unanimous and needs to be appreciated by everyone.

NFL Football Jerseys

If I speak in the Cheap Authentic NFL Jerseys tongues of men and of angels, but have not love, I am only a resounding gong or a clanging cymbal. If I have the gift of prophecy and can fathom all mysteries and all Official NFL Jerseys knowledge, and if I have a faith that can move mountains, but have not love, I am nothing. If I give all I possess to the poor and surrender my USA Jerseys Shop body to the flames,but have not love, I gain nothing.Love is patient, NFL Jerseys love is kind. It does not envy, it does not boast, it is not proud. It is not rude, it is not self-seeking, it is not easily angered, it NHL Jerseys keeps no record of wrongs. Love does not delight in evil but rejoices with the truth. It always protects, always trusts, always MLB Jerseys hopes, always perseveres.Love never NHL Hockey Jerseys fails. But where there are prophecies, they will cease; where there are tongues, they will be stilled; where there is knowledge, it will pass away. For we know in part and we prophesy in MLB Baseball Jerseys part, but when perfection comes, the imperfect disappea. When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became NBA Basketball Jerseys man, I put childish ways behind me. Now we see but a poor reflection as in a mirror; then we shall see face to face. Now I know in part; then I shall know fully, even as I am fully known.And now these three remain: faith, hope and NFL Football Jerseys love. But the greatest of these is love. http://www.jersey-usa.com/sitemap.html LIJ

viagra online

I just came across this and loved your idea of focusing on a different aspect for each day of the week! Thank you so much for sharing this and allowing us to copy it as well! I think this will be a lovely addition to our morning prayer time as well!


I always prefer to read the quality content and this thing I found in you post. Thanks for sharing.

antalya property

Its really make me happy thank you for post


The first stage Wedding Dresses of spring wedding will give you so many things to plan and organize. Taking some time first to think and jot down some initial wedding ideas or Evening Gowns themes is really important before referring to any wedding vendors or Evening Dresses
venues. In this way, you will be able to easily conceptualize the perfect touches Quinceanera Dresses for your spring wedding day.As we all know, spring is the mark of time of birth and renewal. Having your wedding in this beautiful season can bestow a marriage life full of excitement and adventure.

Quick house sale

$500 a day collected by the Taliban!? Interesting to know...

Coach Wallets

The innovative design with super quality and shinny colors with different styles make clearance Coach Wallets on sale at coachoutletvip.com become one of the most popular brand wallets all over the world, content with coach mens wallet cheap on sale and discount coach purses for women. With help of multilayers inside design from cheap coach wallets outlet for sale, you can collect different kinds of cards and put money inside that you want to. I'm sure you'll find what you want among the great amount of clearance coach purses on sale here. Welcome to coach online store and buy them now. Enjoy the fashion world now.

sell house quick

I am agree with you.. The setting is Ziarat in the tribal northwest territory of Pakistan...Also, I am confuse why the region's tribal groups have been unable to sort out competing property...

thomas sabo ireland

I like it very much, welcome to my website, here are you like all ladies adorn article, thank you


It's in the question itself. Of course, people can't afford if the price is too high for the minimum food they eat.

discount timberland boots

the music you listen to all influence the way you think and feel about yourself and the world around you.

Account Deleted


Thanks for article.

Account Deleted

Such an interesting story to read and I enjoyed reading it as well. Keep up the good work..

toronto research

Account Deleted

I will surely return more often. leotards

Account Deleted

Property rights determine the incentives for resource use. Property rights consist of the set of formal and informal rights to use and transfer resources. Property rights range from open access to a fully specified set of private rights.

Property Management Firms
Property Investment USA


Nice article, great!I like it, thanks for sharing it with us. its worth reading!

Sell House |
Wholesale Real Estate

Account Deleted


Account Deleted


Thanks a lot ...

Account Deleted


Thanks for comment ...

Account Deleted

Many places and centers offer business and trade promotions to both buyers and supplier.What about the differences in skill intensities across industries? The job losses in the relatively unskilled-labor intensive battery industry should have little effect on the relatively skilled-labor intensive machinery
sexshop online
alongador peniano


Took me time to read all the comments, but I truly enjoyed the post. It proved to become Definitely helpful to me and Im certain to all the commenters suitable here free energy download

Account Deleted

Hey great stuff, thank you for sharing this useful information and i will let know my friends as well.

organic seo service

Account Deleted

Very good post, very helpful

Steve Mendonzes


Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Your Information

(Name is required. Email address will not be displayed with the comment.)