Property Rights in Developing Countries

Real estate can be one of the most lucrative investments that anyone can make. Studies have shown that more millionaires have been made through real estate than through any other means. In many developing countries this is especially true as in many cases those that are in power typically remain in power simply because they are the controllers of all the land. This article will explain a little about how vital a role real estate plays in developing countries.

One of the key aspects of real estate in the American and western world is the concept of ownership. In western culture ownership allows you to borrow against what you own using your property as collateral. This gives potential entrepreneurs access to capital and therefore the ability to start businesses and better their own lives. In other societies, such rights do not always exist. In many countries, real estate and therefore the majority of all valuable assets is owned by a small group of people. The majority of the population never owns land and usually never has the ability to buy land. This means that there is a lack of economic innovation fostered by small businesses and it means that people generally stay poor.

Because people in small countries lack the capital creation abilities available in western societies, the people generally stay poor and since the people who do hold the property are not advantaged to sell or give up their rights things pretty much stay the same. A key aspect of any developing country is property rights.

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