- Elgar original reference
Edited by Enrico Colombatto
Chapter 11: Are Property Rights Relevant for Development Economics? On the Dangers of Western Constructivism
Enrico Colombatto* On the notion of economics Modern economic analysis is usually conceived in two different ways. Some believe that economists should study how given policy goals can be attained. In particular, when mutually inconsistent objectives are proposed, social scientists should describe the implicit trade-offs and suggest solutions, possibly by referring to targets of a higher order. The main actors are thus the policy maker, who deﬁnes the objectives, and the social engineer, who designs the course of action consistent with the assigned target. Contrary to this widely shared (mainstream) view, the subjectivist school claims that all social sciences should be dealing with the way individuals behave and interact in order to pursue their own aspirations. The search for a social goal should thus be ignored, for it would necessarily be based on arbitrary utilitarian hypotheses, thereby leading to useless or even harmful results. In particular, (free-market) economists should focus on the analysis of human conduct in the presence of scarcity constraints, whereby individuals have to choose what to sacriﬁce in order to meet their preferences or – more precisely – to increase their satisfaction. The differences between these two views have important consequences from the moral, positive and normative standpoints. They also deﬁne the different roles of property rights within the context of growth and development. The ﬁrst part of this chapter is thus devoted to recalling the ethical validation of a society based on private property rights principles and draws some implications for growth and development policies...
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