We focus on the state’s crucial functions in defining, interpreting, and enforcing property rights, introducing a supply and demand framework to understand the conditions under which state-enforced property rights evolve from extant property rights. We examine the dynamics of how these rights adapt in the face of technological change, shifting preferences, demographic pressures, and other significant shocks that influence the efficiency of resource use. Property rights matter because they determine resource use. To be meaningful, property rights need to be enforced. While rights holders can initially enforce these rights, increasing competition for the resource prompts state intervention to reduce enforcement costs. Central to our discussion is the influence of the institutional context and the power dynamics among stakeholders, which critically shape the provision, enforcement, and transformation of property rights. Through a discussion of four different approaches from the New Institutional Economics literature, we explore the political economy of the emergence, enforcement, and evolution of property rights and their role in economic development.