Property Rights happen to be the Laws that are created by governments in regards to the way individuals can regulate, transfer and benefit from property. Economic theory claims that government enforcement of robust property rights is the determinant regarding the degree of economic success observed in a region. Additionally, in any type of economy there happen to be two key rules which comprise the property rights institutions that include safeguarding against expropriation by governments, and contracting institutions that facilitate private contracts among citizens (Troisi-Paton 112). The importance of property rights is that they protect citizens from expropriation such as high taxes.
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In contrast, Venezuela had an economic rating of 7.0 in 1970 and ended up falling to 5.3 in 2001 (Galindo 112). This was a result of the Hong Kong taking a stand against bad economic policies that influenced their growth such as corruption. On the other hand Venezuela relaxed its restrictions causing high levels of corruption that hindered economic growth.
Galindo, Martin M.-A, and Edward Nissan. International Political Economy. Hauppauge: Nova Science Publishers, 2010. Print.
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