Property is the basic building block of all business interactions that occur in our daily lives. But as a recent report from The Property Rights Alliance shows, the lack of secure property rights is holding many countries back from reaching their true economic potential.
Long before the United Nation’s enshrined it as a human right, property has been the medium through which we trade. Without the right to property, an individual is left with no means to securing the basic necessities and is left reliant on others. When property rights are secure, we have the freedom to seek innovative business opportunities. Through property rights, we are able to invest in our future, improve our circumstances, and, in turn, contribute to the growth of the market and economy in which we function.
As an extension of this human right, small businesses and entrepreneurs must have secure rights to their property. Peruvian economist and expert in the informal sector and property rights Hernando de Soto has termed the absence of such security “dead capital.” He pointed out that even though a business might have the physical resources such as land or a building, its hands are tied in putting it to work unless property rights to such resources are well established and secure. When such assurances are absent, businesses and individuals are forced to operate in the informal sector, costing all parties in potential revenues in the forms of taxes and the subsequent services from the state.
As we have seen through countless studies and recent articles, property rights go hand in hand with the development of families, communities, and nations – especially women’s ownership. When women own their property, they invest more in food, education, and the security of the next generation. Yet, in many places around the world today, property rights are under siege and women’s property rights are not guaranteed because of inheritance laws or through outright gendered policies favoring men.
It is within this context that The Property Rights Alliance released its 2013 International Property Rights Index (IPRI). The IPRI report is an annual evaluation of 131 nations on their performance in property rights in four categories: overall property rights, the legal and political environment, physical property rights, and intellectual property rights. The IPRI report demonstrates the connection between a nation’s property rights and its economic development. In this year’s Index, Finland receives the highest overall score of 8.6 (out of 10), while Yemen is ranked last at number 131.