Final answer:
Property rights encompass the legal entitlements concerning the use, possession, encumbering, and disposition of property, integral for market functioning and economic growth. These rights are supported by contractual rights, empowering individuals to form agreements over property use. Zoning regulations illustrate government's role in shaping property use, affecting property owners' rights and responsibilities.
Step-by-step explanation:
All the legal rights relevant to ownership of property, including the rights of use, possession, encumbering, and disposition, are collectively referred to as property rights. These rights are essential for the functioning of markets and are closely related to contractual rights, which allow individuals to enter into agreements with others regarding the use of their property. The protection and enforcement of these rights are crucial for economic growth and the adherence to the rule of law, as they provide a legal framework that supports clear, fair, and equally applicable laws that govern society. Property rights extend beyond physical assets to include the right to one's training and experience, which in turn affects livelihoods and the ability to engage in contracts.
Zoning regulations, such as those established in New York City in 1916, are an example of how government can influence the use of property through land-use regulation. These regulations show that while property owners have the right to own, use, and dispose of their property, they must also comply with government regulations that can include limitations on property use.
In summary, for societies to experience economic growth and an increase in standard of living, a legal environment that supports the utilization of property to its highest use is necessary. This encompasses the ability to trade or sell property and the legal enforcement of contracts, without which business transactions would face significant challenges, impeding economic progress.