Abstract
AbstractPolitical economy models view property rights as the linchpin to economic development. But strong property rights—defined as rules that provide greater compensation to a larger set of claimants—encourage opportunistic behaviors that undermine infrastructure investments. Strong rights lead to (1) holdout problems among existing property owners, (2) infrastructure trolls who occupy needed land, and (3) scope expansions in which communities demand unrelated local public goods. I draw on original qualitative research around highway projects in Colombia to illustrate how communities leverage their property rights to secure greater compensation and collective goods. A survey experiment supports the microfoundations of the theory: making salient strong property rights increases compensation demands and legal claims. State audit reports reveal that opportunistic behavior occurs on two‐thirds of highway projects. These findings bolster a neglected view of strong property rights as a check on state‐led economic development projects.
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