Ruling Elites' Rotation and Asset Ownership: Implications for Property Rights

Abstract

We provide a theory and empirical evidence showing that the rotation of ruling elites in combination with elites' asset ownership could improve property rights protection, and that such association holds for non-democratic political regimes when it is based on elites' concerns about security of their own property rights in the event they lose power. Such incentives provide a solution to the credible commitment problem in maintaining secure property rights when institutional restrictions on expropriation are weak or absent.

Keywords: Endogenous property rights, credible commitment, "stationary bandit''

JEL Classification: K11, O17, P14