ABSTRACT
This chapter describes the property rights and contracts in urban contexts and their effect on economic efficiency. It examines the significant potential for positive economic effects of reforms aimed at securing a valid title to a property and bringing households and businesses into the formal economic sector. The chapter explains that the institutions for protecting property rights are much weaker in Russia and the Ukraine than in Central Europe and describes some of the economic consequences of the disparity. It talks about the effect of privatization policies in developing countries. The refusal percentage can be seen as an indicator of investment risk due, in particular, to insecure property rights. Just as better institutions that protect private property rights should encourage entrepreneurs to operate in the formal sector, privatization policies aim at increasing the share of the economy that is based on private property rights.
