U.S. Property Rights Protections Decline for Third Straight Year

Eminent domain abuses and increased government regulation cited as cause

NEW ORLEANS, La. – An international comparative study that measures the protection of physical and intellectual property rights ranked the United States 18th overall, down from 16th in 2010 and 14th in 2007.

The Property Rights Alliance used three core components when calculating each countries score: legal and political environment, physical property rights, and intellectual property rights. The United States’ score fell because of a reduction in the physical property rights category, which also includes reliability of property registration and access to loans.

Kelsey Zahourek, chief executive of the Property Rights Alliance, cites eminent domain abuses in New Jersey and California and new regulations that seek to gain control of the market as reasons for the decline.

“Actions that weaken America’s property rights foundation pose a serious threat to economic vitality,” she says.

The United States ranked 25th in physical property rights, behind Bahrain (5th), Saudi Arabia (8th), Oman (9th), and Tunisia (21st). However, the United States ranked 19th for Intellectual Property Rights, which helped raise her overall score.

The study found that countries with stronger property rights have higher per capita incomes, with the top 20 percent enjoying an average national GDP per capita of $38,350, while the bottom 20 percent averaged only $4,785.

The Institute for Justice, a civil liberties law firm, claims that state and local governments have been using eminent domain to circumvent individual property rights for the benefit of private businesses in the name of economic development.

“Private homes and businesses have been bulldozed, replaced by newer businesses and homes owned not by the public, but by private, politically powerful individuals and corporations.”

Dr. Walter Block, a Loyola University economics professor, echoes the importance of strong private property rights, “The main difference between economies that are economically free, and those that are not, is the far greater scope private property rights play in the free enterprise system.”

Robert Ross is a researcher and social media strategist with the Pelican Institute for Public Policy. He can be contacted at rross@pelicanpolicy.org, and you can follow him on twitter.