The evidence suggests that intellectual property protection is a significant determinant of economic growth. And enterprise allows people to create wealth and prosper. Private property rights are the rights of a person to use his property in whatever way he chooses providing that he doesn’t use force or fraud on any other person. A study examines the importance of private property rights for economic growth, particularly with reference to variation of incomes in rural China between 1979 and 1987. This chapter examines the role of intellectual property rights in economic growth, utilizing cross-country data on patent protection, trade regime, and country-specific characteristics. Resources can be owned by (and hence be the property of) individuals, associations, collectives, or governments. The question of why some countries are rich, and others are poor, is a question that has plagued economists at least since 1776, when Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations. Property rights are theoretical socially-enforced constructs in economics for determining how a resource or economic good is used and owned. A farmer, for instance, would not grow crops, or further develop his land if he knows that his land faces the threat of being seized by the government. Property … economic growth and development, we ask why property rights had come to be neglected in the economic literature. Throughout much of the history of modern economics, the subject was given short shrift. Property rights allow people to be entrepreneurial. Strong IP rights help consumers make an educated choice about the safety, reliability, and effectiveness of their purchases. The direct and indirect economic impacts of innovation are overwhelming, acounting for more than 40% of U.S. economic growth and employment. It is only in the last few decades, however, that economists have accepted the importance of property rights. This is where intellectual property rights (IPRs) matter for economic development. The security of property allows people to pursue their enterprise.
One of the first economists to emphasize the importance of property rights was the Austrian economist Carl Menger. Private Property Rights, Economic Freedom, and Well Being. Strong and Enforced Intellectual Property Rights Protect Consumers and Families. Many people understand the importance of economic development – for alleviating poverty, raising standards of living, and supporting our social, cultural, and political infrastructure – but the scholarly literature has diverse views on the factors that promote economic development.