Differences in property rights institutions are often thought to contribute to explaining cross-national differences in economic development. If secure and universally enforced property rights help produce collectively beneficial economic results, the question is why there is so much variation in the institutions and rules that regulate property rights. Based on institutional analysis, the purpose of this article is to analyse why some states and governments establish and enforce property rights that are good for growth while others do not. The argument is that the incentive to enforce and protect property rights is shaped by particular political institutions, namely those that relate to the size of a government’s supporting coalition and the extent of power sharing among veto players. The empirical analyses show that coalition institutions are strongly related to property rights while the impact of power sharing is less robust.