Economic Uncertainty and the Role of the Courts (V. Economic Uncertainty and the Role of the Courts‪)‬

This Article addresses economic uncertainty and the role of institutions in securing property rights. We know a lot more about the former than we do about the latter. That is to say, we know about the effects of uncertainty, especially uncertainty about property rights, on the economy. (1) We know less about the extent to which institutional arrangements can guarantee security of property and less still about whether they can create secure property rights where such rights do not already exist. There are very strong theoretical reasons to believe that property rights are a first-order determinant of the health of the economy. Adam Smith linked investment and growth to the security of property. (2) It also seems reasonably clear that the security of property rights is connected to the structure of government. When we compare societies around the world with despotic governments to those with limited governments, the latter usually have better property rights and are usually more prosperous. (3) Examples include the Netherlands before and after independence from Spain in the seventeenth century (4) and Zimbabwe and Botswana today. (5)