Property Rights without Democracy: The Role of Elites’ Rotation and Asset Ownership

In democracies, economic institutions, including property rights, reflect the needs and preferences of various grassroots constituencies, whereas in autocracies institutions serve ruling elites. It is generally expected that unaccountable elites use their power to expropriate the rest of society and to do so they establish extractive institutions instead of inclusive ones that would be serving the society at large (Acemoglu and Robinson, 2012). Inclusive institutions are more likely to be observed in democracies, and this suggests a positive correlation between institutional and democratic quality.