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Government Partisanship and Property Rights: Cross-Country Firm-Level Evidence


Corresponding author: Stephen Weymouth, McDonough School of Business, Georgetown University, 501 Hariri Building, Washington D.C. 20057, USA. E-mail:


Property rights are essential to economic development but vary with the political environment. We develop and test the claim that government partisanship influences the security of business firms' property rights: the perceived security of property rights increases when right-wing parties take power and declines with the election of left-leaning parties. Unlike research that uses country-level aggregates to draw inferences about the determinants of secure property rights, we analyze survey responses of over 7,400 firm owners from 73 countries using a novel difference-in-differences approach. We find that the political partisanship of the government in power strongly affects individual perceptions of property rights: firm owners are more likely to perceive that their property rights are secure under right-leaning governments. Our results are robust to firm- and country-level economic performance as well as controls for political institutions that might induce more stability to property rights, such as the number of checks and balances (veto players) in a system. Overall, our results indicate that business owners' beliefs about the security of property rights are highly responsive to changes in government partisanship.