Heritage Foundation says property rights not important to growth

The Heritage Foundation, a right-wing US think tank, has published its annual Index of Economic Freedom (via Matthew Yglesias). The index rates each country on ten different measures of economic freedom, which are then averaged to produce a final score for that country.

If you look at China, the Heritage Foundation rates that country 132nd out of 179 countries. On the measure “property rights”, the Heritage Foundation give China a score of 20/100 and has this to say:

China’s judicial system is weak, and many companies resort to arbitration. Even when courts try to enforce decisions, local officials can ignore them with impunity. All land is state-owned, but individuals and firms may own and transfer long-term leases, subject to many restrictions, as well as structures and personal property. The Property Law allows automatic renewal of residential property rights; commercial and industrial grants are renewed absent a conflicting public interest. Intellectual property rights are not enforced effectively. Copyrights, patents, brand-names, trademarks, and trade secrets are routinely stolen.

This seems surprising given that China’s record of economic growth over the past quarter century is second to none; it’s averaged 9-10% a year over that period. Since China has done better than any other economy that’s ever existed, we can conclude that strong proprty rights are not necessary for strong long term economic growth.

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