Final answer:
Lack of well-defined property rights creates economic uncertainty that can impede growth, as it affects the market's functionality and the resolution of externalities. Coase's railroad and farmer case exemplifies how clear responsibilities can lead to effective solutions. The public good vs. private property debate adds to this uncertainty.
Step-by-step explanation:
An economic issue that creates uncertainty as to whether property rights will be protected in the future is the lack of clearly defined and enforced legal ownership rights. Such uncertainty hinders economic growth as it compromises the effective functioning of markets which depend on the protection of property and contractual rights. Ronald Coase highlighted the importance of well-defined property rights with a scenario involving a railroad and a farmer’s field, demonstrating how clear legal responsibilities can resolve externalities and reduce costs associated with conflicts over property. Another aspect of property rights that can create economic uncertainty is the debate over public good versus private property. This raises questions about when, if ever, the government should have the authority to take private property for the perceived benefit of the wider community, which affects the security of property rights and hence investment decisions.