Question

In 1950, residents in Liberia were wealthier than those in Taiwan. Today, per capita gross domestic product (GDP) in Taiwan is more than twenty times that of Liberia. How would private property rights help explain why Taiwan is now so much wealthier than Liberia

Answer 1

In capitalistic countries individuals generally have two basic rights that help to increase overall wealth: right to private property and right to inheritance.

• The capitalistic system states that individuals are allowed to own their and enjoy their own personal property. In each country laws generally subordinate the right to private property to the well being of society.
• The right to inheritance refers to the right that an individual has to decide who will own his/her properties after they pass away. Unless stated otherwise, a person's offsprings are generally entitled to inherit the person's properties.

Taiwan is a capitalistic country that promotes and safeguards both private property and inheritance rights.

On the other hand, Liberia is one of the countries that least protects rights even compared to other African nations. Generally speaking, these rights are not very important and significant to most African governments, and that can explain why most of them haven't developed yet.

According to a global property rights index, Liberia scores 34 out of 100 in property rights protection. The best scoring sub-Saharan African nation is South Africa with 68. If you compare Liberian score to Taiwan's (86) you realize that there is a huge difference.

Property and inheritance rights are basic and essential to foster economic growth and development, since who would work to build anything (house or company) if they are not sure they will remain as its owners.

Answer 2

How would private property rights help explain why Taiwan is now so much wealthier than Liberia?

Taiwan is so much wealthier than Liberia in terms of the use of Private property rights because the Taiwanese have many exportable products they have Private Property rights on. The Taiwanese started building from copying technologies of sub-standard goods to quality goods over the years of improvement while the Liberian fought a prolonged civil war without a change to produce products to have a Private Property right on.

Step-by-step explanation:

The Book of Things in Taiwan Civil Code was overhauled between 2007 and 2010. This chapter coded the amendments and found:

(1). 97% of the proposals by the task force (composed of property scholars and judges) were accepted verbatim by the legislature;

(2). Property laws in Japan, Germany, and Switzerland heavily influenced this round of amendments. The (unconventional) story behind the legal changes is that scholars and judges are the “interest group” that drives these amendments.