Chapter 19, Problem 12AA

Solution

To explain: The way weak system of property rights will affects the economic development is to be explained.

In many developing countries , government do not support strong, well defined private property rights. For example, there is Country A in which there is only 15 percent of land is legally owned. If individual do not have well defined private property rights , they do not exchange land. Due to which , large scale farming hasn't occurred. also, farmers has less advantage to improve the value of the property .

In many poorest countries , the economic growth is low. so the people who do not owe land or houses of their own cannot easily borrow against the value of those items or even they cannot sell them.