Economic Development and Property Rights: Time Limits on Land Ownership

This article discusses the relationship between economic development and one aspect of property rights, a statute of limitations defining time limits on ownership claims. The analysis centers on property rights in land. This article argues that the available development opportunities shape the time limits on ownership claims that maximize property values, which in turn creates an inherent underlying tension among the owners of different types of property in the economy. An implication for positive analysis is that economic growth and successful development create demands for changing this dimension of property rights. Other characteristics of the economy, such as the efficiency of the legal system, the quality of the public sector bureaucracy, and corruption, also affect the value-maximizing time limitations for different types of property. This article discusses implications of these relationships for developing countries and for property redevelopment in declining U.S. central cities.