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The Politics of Property Rights: Political Instability, Credible Commitments, and Economic Growth in Mexico, 1876-1929 (Political Economy of Institutions and Decisions) Paperback – November 4, 2004

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Editorial Reviews

Review

"An impressive volume wih useful and clever statistical measurements of the performance of various parts of the economy, and it certainly is valuable addition to the economic history of Mexico." EH.net

"Helps to unpack the diffuclt instability-growth puzzle." APSA Perspectives on Politics

Book Description

This detailed economic history of Mexico advances a theory about how rent seeking permits economic growth. The book explains why political instability is not necessarily correlated with economic stagnation. It addresses the puzzle of growth amidst instability by combining analytic tools and theoretical insights from all history, political science and economics. This study is for historians of Latin America, scholars interested in economic development, and political scientists interested in the political foundations of growth.
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Product Details

  • Series: Political Economy of Institutions and Decisions
  • Paperback: 406 pages
  • Publisher: Cambridge University Press (July 26, 2004)
  • Language: English
  • ISBN-10: 0521603544
  • ISBN-13: 978-0521603546
  • Product Dimensions: 6 x 0.8 x 9 inches
  • Shipping Weight: 1.5 pounds (View shipping rates and policies)
  • Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
  • Amazon Best Sellers Rank: #2,283,846 in Books (See Top 100 in Books)

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Format: Paperback
Haber et al ask whether the truism that political instability means declining economic growth because of weak property rights holds true from the porfiriato to post-revolutionary Mexico (1876-1929). The answer, surprisingly, is not necessarily(!).

Unstable governments have an incentive to create and enforce limited property rights, so as to have access to rents by which they can maintain their power. However, if the government goes too far and tries to create a form of limited government, it weakens itself such that less scrupulous usurping governments can enter the bargain and co-opt those rent-producing assets for their own purposes, usually to the detriment of the current administration.

Nevertheless, the mexican state during this period in question was able to benefit from these limited property rights, enforced by a variety of third-parties, to maintain economic growth throughout this chaotic period, with the slight exception of the years 1913-1917. However, the authors point out that the potentially major cause for the economic contraction during these years was primarily a result of the destruction of the railroad/transport system, which limited the property holder's ability to get their goods to the international and domestic markets. Political violence per se was not the primary cause of economic contraction.

This book is an outstanding analysis of real empirical evidence which turns the simple theory of instability=contraction on its head.

The deeper import herein is also that limited governments cannot provide an immediate exit from political instability. Machiavelli jumps out from behind the curtains wearing a sombrero!
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