An Experiment on Property Rights and Cheating Behavior

A well functioning system of property rights is a key component of the rule of law and ultimately of development. An important trend in development policies has emphasized the need to establish formalized property rights of land (De Soto, 2000, Sjaastad and Cousins, 2009). However, a well-functioning property rights' system is built both on formal and efficient public institutions that guarantee top-down public enforcement as well as on the bottom-up emergence of coordination on the Hume's property convention where people find it privately convenient to respect each others entitlements (Sugden, 1989, Fabbri et al., 2019). An effective property system thus blends third-party enforcement of formal titles with second-party enforcement, (social norms whereby owners are willing to fight to defend and enforce their entitlements) and first-party enforcement (moral norms suggesting non-owners to resist cheating). The interplay between the formalization of property rights and the development of moral norms is the subject of the present research project. Indeed there is a growing experimental literature studying preferences for truth-telling (Abeler et al., 2019) and showing how resistance to cheating is a very robust moral norm. In this project, we study whether an institutional reform formalizing land's rights carried out ten years before influenced individuals' moral norms suggesting to resist cheating.