Optimum share of public and private sectors in property rights protection: An augmented endogenous growth model

A myriad of studies has been devoted to explain the role of incomplete property rights protection (PPRs) in economic growth process. All studies have been conducted in line with legal-centralist or private-ordering views, only. Our contribution in this study is twofold. We combined private-ordering and legal-centralist views and propose an augmented endogenous growth model to calculate the optimum share of public and private sectors in property rights protection (PPRs). Also, the shares of government and private sectors in total production have been calculated. The result of calibration in Iran's economy indicated that the optimum share of government expenditure in PPRs should equal to 45.37%, and private sector's share should be 54.63%. Also the optimum share of government production should be 16.62% and production share of private sector should be 83.38%. Nevertheless in Iran's economy private sector shares only a small percentage (about 2%) of the total quantity of expenditures on PPRs. (C) 2013 Elsevier B.V. All rights reserved.