The Origins of Private Property Rights: States or Customary Organizations?

ILIA MURTAZASHVILI, JENNIFER MURTAZASHVILI
JOURNAL OF INSTITUTIONAL ECONOMICS 12.1 (2016): 105-128

Abstract: Political theories of property rights are less optimistic than self-governance perspectives regarding the ability of non-state organizations to supply private property institutions. Despite offering different answers to the question of where property rights come from, these diverse perspectives share a concern with organizational capacity, constraints, and legitimacy as explanations why organizations are able to supply private property rights. We use these shared concerns as a point of departure to investigate formal and informal private property rights in rural Afghanistan. We find that informal private property rights are more effective than formal private property rights because customary organizations fare better than the state on the dimensions of capacity, constraints, and legitimacy. More generally, these ‘political’ features of formal and informal organizations explain why self-governance works, as well as provide insight into the challenges confronting efforts in fragile states to establish formal private property institutions.