Mariana Prado (Toronto Law) asks What is Law and Development?
ABSTRACT: Law & Development studies have been growing in the past few years, after having its death declared in the 1070s. There is, however, very little clarity as to what this field of study encompasses or whether it is a field at all. Under the label of Law & Development one can find a wide variety of studies, approaches, analyses and topics. Some studies focus on formal institutions, discussing how enforcement of contracts, protection of property rights, and an independent judiciary protect investors and improve economic growth in developing countries. Others have not focused on economic development, but instead on how laws to protect women from abuses in the family and to create quotas to guarantee their participation in the public sphere have been largely ineffective due to deeply embedded social norms and value that cannot be changed by legislation (at least not from one day to the next). Still others have criticized the Law & Development discourse as another source of imperialism and dominance that justify senseless legal transplants from the North to the South.
What brings all these studies together under one label? What is it that one should know, if one is looking for a concise summary of what this field of study encompasses? These are the questions that I will try to answer in this essay. The read should be forewarned that the title may be slightly misleading, as the paper will not provide comprehensive and conclusive answers to the question “What is Law & Development?” but hopefully it will offer a starting point for a deeper inquiry. Most importantly, I hope readers will take this as an invitation to explore this field in greater depth.
Monday, August 22, 2011
Friday, August 12, 2011
Interesting new article by Don Clarke
Donald C. Clarke, George Washington University Law School has posted ‘Nothing But Wind’? The Past and Future of Comparative Corporate Governance.
ABSTRACT: Corporate law scholarship has come a long way since Bayless Manning some four decades ago famously pronounced it dead. Not only has doctrinal scholarship continued its project of critique and rationalization, but empirical and economic approaches have injected new life into the field.
Recent years have seen the rise of comparative corporate governance (CCG) as an increasingly mainstream approach within the world of corporate governance studies. This is a function partly of an increasing international orientation on the part of legal scholars and partly of an increasingly empirical turn in corporate law scholarship generally. Different practices in other jurisdictions present at least the possibility of natural experiments that attempt to find causal relationships between particular features of a corporate governance regime and real-world outcomes. This body of research has become particular relevant as we enter the second decade of the twenty-first century. The financial crisis has called into question many of our traditional ways of thinking about corporate governance and the relationship between business enterprises and the state. Are there other countries that do it better?
This article discusses what is unique about CCG as an approach to corporate governance studies. It begins by examining the concepts of corporate governance and comparative corporate governance, making the point that comparative corporate governance has in general been focused on agency problems between shareholders and managers but need not be so. It then looks at methodological issues in comparative corporate governance, critiquing in particular economic Darwinist theories and the failure of theories of international competition in corporate governance to incorporate the notion of comparative advantage. Finally, it reviews major lessons learned from this body of work and suggests direction for future research. Among other things, it calls for more comparative research into alternative business entities dubbed “uncorporations” by Larry Ribstein and into corporate governance in increasingly important economies such as China and India.
ABSTRACT: Corporate law scholarship has come a long way since Bayless Manning some four decades ago famously pronounced it dead. Not only has doctrinal scholarship continued its project of critique and rationalization, but empirical and economic approaches have injected new life into the field.
Recent years have seen the rise of comparative corporate governance (CCG) as an increasingly mainstream approach within the world of corporate governance studies. This is a function partly of an increasing international orientation on the part of legal scholars and partly of an increasingly empirical turn in corporate law scholarship generally. Different practices in other jurisdictions present at least the possibility of natural experiments that attempt to find causal relationships between particular features of a corporate governance regime and real-world outcomes. This body of research has become particular relevant as we enter the second decade of the twenty-first century. The financial crisis has called into question many of our traditional ways of thinking about corporate governance and the relationship between business enterprises and the state. Are there other countries that do it better?
This article discusses what is unique about CCG as an approach to corporate governance studies. It begins by examining the concepts of corporate governance and comparative corporate governance, making the point that comparative corporate governance has in general been focused on agency problems between shareholders and managers but need not be so. It then looks at methodological issues in comparative corporate governance, critiquing in particular economic Darwinist theories and the failure of theories of international competition in corporate governance to incorporate the notion of comparative advantage. Finally, it reviews major lessons learned from this body of work and suggests direction for future research. Among other things, it calls for more comparative research into alternative business entities dubbed “uncorporations” by Larry Ribstein and into corporate governance in increasingly important economies such as China and India.
Wednesday, July 20, 2011
Stiglitz is Rethinking Development Economics
Joe Stiglitz has published a short paper titled Rethinking Development Economics in the World bank Research Observer. See here.
Saturday, July 16, 2011
Empirical Evidence on Satisfaction with Privatization in Latin America
This article is interesting.
Empirical Evidence on Satisfaction with Privatization in Latin America
World Bank Econ Rev 2011.
Céline Bonnet*,
Pierre Dubois†,
David Martimort‡ and
Stéphane Straub§
↵§Stéphane Straub (corresponding author), Toulouse School of Economics (ARQADE and IDEI), Tel: (33) 561128529, stephane.straub@univ-tlse1.fr.
↵* Celine Bonnet, Toulouse School of Economics (GREMAQ, INRA), celine.bonnet@tse-fr.eu.
↵† Pierre Dubois, Toulouse School of Economics (GREMAQ, INRA, IDEI), pierre.dubois@tse-fr.eu.
↵‡ David Martimort, Paris School of Economics, martimor@parisschoolofeconomics.eu.
Abstract
Since the 1980s, privatization of formerly state-owned firms has been extensively implemented by governments across Latin America. Despite the fact that most evaluations of the process fail to find significant adverse efficiency and welfare effects, there has been a strong surge in public discontent with such policy in the region. This paper performs a systematic empirical analysis of the determinants of such dissatisfaction, using survey data from Latinobarometro covering 17 countries over the period 1998-2008, complemented by country level data on macroeconomic, political, and institutional aspects as well as data on privatization. Dissatisfaction appears to respond to absolute and relative welfare effects, and we find a robust U-shaped effect in term of education and income levels, with individuals in the middle of such distributions being more critical with the outcome of privatizations.
Empirical Evidence on Satisfaction with Privatization in Latin America
World Bank Econ Rev 2011.
Céline Bonnet*,
Pierre Dubois†,
David Martimort‡ and
Stéphane Straub§
↵§Stéphane Straub (corresponding author), Toulouse School of Economics (ARQADE and IDEI), Tel: (33) 561128529, stephane.straub@univ-tlse1.fr.
↵* Celine Bonnet, Toulouse School of Economics (GREMAQ, INRA), celine.bonnet@tse-fr.eu.
↵† Pierre Dubois, Toulouse School of Economics (GREMAQ, INRA, IDEI), pierre.dubois@tse-fr.eu.
↵‡ David Martimort, Paris School of Economics, martimor@parisschoolofeconomics.eu.
Abstract
Since the 1980s, privatization of formerly state-owned firms has been extensively implemented by governments across Latin America. Despite the fact that most evaluations of the process fail to find significant adverse efficiency and welfare effects, there has been a strong surge in public discontent with such policy in the region. This paper performs a systematic empirical analysis of the determinants of such dissatisfaction, using survey data from Latinobarometro covering 17 countries over the period 1998-2008, complemented by country level data on macroeconomic, political, and institutional aspects as well as data on privatization. Dissatisfaction appears to respond to absolute and relative welfare effects, and we find a robust U-shaped effect in term of education and income levels, with individuals in the middle of such distributions being more critical with the outcome of privatizations.
Wednesday, June 22, 2011
Legal Institutions, Innovation and Growth
This paper looks interesting.
Legal Institutions, Innovation and Growth
LUCA ANDERLINI, Georgetown University - Department of Economics
Email: la2@georgetown.edu
LEONARDO FELLI, London School of Economics - Department of Economics, CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Centre for Economic Policy Research (CEPR)
Email: lfelli@econ.lse.ac.uk
GIOVANNI IMMORDINO, Università degli Studi di Salerno - Centre for Studies in Economics and Finance (CSEF)
Email: GIIMMO@TIN.IT
ALESSANDRO RIBONI, University of Montreal - Department of Economics
Email: alessandro.riboni@umontreal.ca
We analyze the relationship between legal institutions, innovation and growth. We compare a rigid (law set ex-ante) legal system and a flexible one (law set after observing current technology). The flexible system dominates in terms of welfare, amount of innovation and output growth at intermediate stages of technological development - periods when legal change is needed. The rigid system is preferable at early stages of technological development, when (lack of) commitment problems are severe. For mature technologies the two legal systems are equivalent. We find that rigid legal systems may induce excessive (greater than first-best) R&D investment and output growth.
Legal Institutions, Innovation and Growth
LUCA ANDERLINI, Georgetown University - Department of Economics
Email: la2@georgetown.edu
LEONARDO FELLI, London School of Economics - Department of Economics, CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Centre for Economic Policy Research (CEPR)
Email: lfelli@econ.lse.ac.uk
GIOVANNI IMMORDINO, Università degli Studi di Salerno - Centre for Studies in Economics and Finance (CSEF)
Email: GIIMMO@TIN.IT
ALESSANDRO RIBONI, University of Montreal - Department of Economics
Email: alessandro.riboni@umontreal.ca
We analyze the relationship between legal institutions, innovation and growth. We compare a rigid (law set ex-ante) legal system and a flexible one (law set after observing current technology). The flexible system dominates in terms of welfare, amount of innovation and output growth at intermediate stages of technological development - periods when legal change is needed. The rigid system is preferable at early stages of technological development, when (lack of) commitment problems are severe. For mature technologies the two legal systems are equivalent. We find that rigid legal systems may induce excessive (greater than first-best) R&D investment and output growth.
Sunday, June 12, 2011
Risk, Institutions and Growth: Why England and Not China?
There is a new and interesting paper by Avner Grief of Stanford's Economics Department, Risk, Institutions and Growth: Why England and Not China?
ABSTRACT: We analyze the role of risk-sharing institutions in transitions to modern economies. Transitions require individual-level risk-taking in pursuing productivity-enhancing activities including developing, adopting, and using new knowledge. Individual-level, idiosyncratic risk implies that distinct risk sharing institutions - even those providing the same level of insurance - can lead to different growth trajectories if they differently motivate risk-taking. Historically, risk sharing institutions were selected based on their cultural and institutional compatibility and not their unforeseen growth implications.
We simulate our growth model incorporating England's and China's distinct pre-modern risk-sharing institutions. The model predicts a transition in England and not China even with equal levels of risk sharing. Under the clan-based Chinese institution, the relatively risk-averse elders had more control over technological choices implying lower risk-taking.
Focusing on non-market institutions expands on previous growth-theoretic models to highlight that transitions can transpire even in the absence of exogenous productivity shocks or time-dependent state variables. Recognizing the role of non-market institutions in the growth process bridges the view that transitions are due to luck and the view that transitions are inevitable. Transitions transpire when 'luck' creates the conditions under which economic agents find it beneficial to make the choices leading to positive rates of technological change. Luck came in the form of historical processes leading to risk-sharing institutions whose unintended consequences encouraged productivity-enhancing risk-taking.
ABSTRACT: We analyze the role of risk-sharing institutions in transitions to modern economies. Transitions require individual-level risk-taking in pursuing productivity-enhancing activities including developing, adopting, and using new knowledge. Individual-level, idiosyncratic risk implies that distinct risk sharing institutions - even those providing the same level of insurance - can lead to different growth trajectories if they differently motivate risk-taking. Historically, risk sharing institutions were selected based on their cultural and institutional compatibility and not their unforeseen growth implications.
We simulate our growth model incorporating England's and China's distinct pre-modern risk-sharing institutions. The model predicts a transition in England and not China even with equal levels of risk sharing. Under the clan-based Chinese institution, the relatively risk-averse elders had more control over technological choices implying lower risk-taking.
Focusing on non-market institutions expands on previous growth-theoretic models to highlight that transitions can transpire even in the absence of exogenous productivity shocks or time-dependent state variables. Recognizing the role of non-market institutions in the growth process bridges the view that transitions are due to luck and the view that transitions are inevitable. Transitions transpire when 'luck' creates the conditions under which economic agents find it beneficial to make the choices leading to positive rates of technological change. Luck came in the form of historical processes leading to risk-sharing institutions whose unintended consequences encouraged productivity-enhancing risk-taking.
Tuesday, May 24, 2011
Call for Papers: 2011 Law and Development Institute Conference
The Law and Development Institute (LDI, www.lawanddevelopment.net) is pleased to announce a call for paper proposals for the 2011 annual conference, entitled, "Law and Development at the Microlevel: From Microtrade to Current Issues in Law and Development". The conference will be co-hosted with Seattle University School of Law on December 10, 2011. The LDI calls for papers on any aspect of microtrade, which is a new system of international trade designed to alleviate populations of least-developed countries of extreme poverty (for a concept paper, see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1524185), as well as for papers on other law and development issues that can be considered broadly at the "micro level", including but not limited to: microfinance, microinsurance, green growth and development, etc.
Paper proposals should be limited to a 500 word abstract, which must be received by June 30 at the latest. Accepted conference papers should be completed by November 15 for circulation among the participants in advance of the conference. All proposals must be sent by email to the Law and Development Institute, info@lawanddevelopment.net (with a cc to wtogeneva@hotmail.com). The paper proposals will be peer-reviewed by members of the editorial board of the Law and Development Review (www.bepress.com/ldr). It is anticipated that paper selection will be completed by July 31, 2011. The selected authors will be invited to present their papers at the Conference. The conference venue is Seattle University School of Law, located in Seattle, United States. The invited speakers are expected to cover their own expenses to attend the conference.
Paper proposals should be limited to a 500 word abstract, which must be received by June 30 at the latest. Accepted conference papers should be completed by November 15 for circulation among the participants in advance of the conference. All proposals must be sent by email to the Law and Development Institute, info@lawanddevelopment.net (with a cc to wtogeneva@hotmail.com). The paper proposals will be peer-reviewed by members of the editorial board of the Law and Development Review (www.bepress.com/ldr). It is anticipated that paper selection will be completed by July 31, 2011. The selected authors will be invited to present their papers at the Conference. The conference venue is Seattle University School of Law, located in Seattle, United States. The invited speakers are expected to cover their own expenses to attend the conference.
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