This book investigates whether legal reforms intended to create a market-friendly regulatory business environment have a positive impact on economic and financial outcomes. After conducting a critical review of the legal origins literature, the authors first analyze the evolution of legal rules and regulations during the last decade (2006-2014). For that purpose, the book uses legal/regulatory indicators from the World Bank's Doing Business Project (2015). The findings indicate that countries have actively reformed their legal systems during this period, particularly French civil law countries. A process of convergence in the evolution of legal rules and regulations is observed: countries starting in 2006 in a lower position have improved more than countries with better initial scores. Also, French civil law countries have reformed their legal systems to a larger extent than common law countries and, consequently, have improved more in the majority of the Doing Business indicators used. Second, the authors estimate fixed-effects panel regressions to analyze the relationship between changes in legal rules and regulations and changes in the real economy. The findings point to a lack of systematic effects of legal rules and regulations on economic and financial outcomes. This result stands in contrast to the widespread belief that reforms aiming to strengthen investor and creditor rights (and other market-friendly policies) systematically lead to better economic and financial outcomes.
This volume examines the impact on economic performance of structural policies-policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks. The results reflect a new dataset covering reforms of domestic product markets, international trade, the domestic financial sector, and the external capital account, in 91 developed and developing countries. Among the key results of this study, the authors find that real and financial reforms (and, in particular, domestic financial liberalization, trade liberalization, and agricultural liberalization) boost income growth. However, growth effects differ significantly across alternative reform sequencing strategies: a trade-before-capital-account strategy achieves better outcomes than the reverse, or even than a "big bang"; also, liberalizing the domestic financial sector together with the external capital account is growth-enhancing, provided the economy is relatively open to international trade. Finally, relatively liberalized domestic financial sectors enhance the economy's resilience, reducing output costs from adverse terms-of-trade and interest-rate shocks; increased credit availability is one of the key mechanisms.
Why are carefully designed, sensible policies too often not adopted or implemented? When they are, why do they often fail to generate development outcomes such as security, growth, and equity? And why do some bad policies endure? World Development Report 2017: Governance and the Law addresses these fundamental questions, which are at the heart of development. Policy making and policy implementation do not occur in a vacuum. Rather, they take place in complex political and social settings, in which individuals and groups with unequal power interact within changing rules as they pursue conflicting interests. The process of these interactions is what this Report calls governance, and the space in which these interactions take place, the policy arena. The capacity of actors to commit and their willingness to cooperate and coordinate to achieve socially desirable goals are what matter for effectiveness. However, who bargains, who is excluded, and what barriers block entry to the policy arena determine the selection and implementation of policies and, consequently, their impact on development outcomes. Exclusion, capture, and clientelism are manifestations of power asymmetries that lead to failures to achieve security, growth, and equity. The distribution of power in society is partly determined by history. Yet, there is room for positive change. This Report reveals that governance can mitigate, even overcome, power asymmetries to bring about more effective policy interventions that achieve sustainable improvements in security, growth, and equity. This happens by shifting the incentives of those with power, reshaping their preferences in favor of good outcomes, and taking into account the interests of previously excluded participants. These changes can come about through bargains among elites and greater citizen engagement, as well as by international actors supporting rules that strengthen coalitions for reform.
Rule of Law Reform and Development stands out as an important contribution. Michael Trebilcock and Ronald Daniels have produced an ambitious, comprehensive, and persuasive book that will be of interest to both rule of law practitioners and academics. . . the book s overall strengths as a near-encyclopaedic appraisal of law and development will ensure its standing as a key resource for this still rapidly evolving field. Irina Ceric, Canadian Journal of Law and Society This book offers a sophisticated yet pragmatic account of the proper purposes of rule of law reform, the obstacles to achieving it, and the role that the international community can play. The procedural conception of the rule of law offers an appealing alternative to both one-size-fits-all universalism on the one hand and unconstrained relativism on the other. Kevin Davis, New York University School of Law, US This is the book that I have been waiting for. Even though rule of law has become the new mantra in development, its meaning remains elusive and its operational content unclear. This book helps us think systematically about it. Grounded in a procedural conceptualization of the rule of law, and supported by detailed case studies, Trebilcock and Daniels analysis lays out a theoretically sophisticated, yet practical agenda for making progress with rule-of-law reforms. Dani Rodrik, Harvard University, US This is a book on the role of legal institutions in economic development that is rich in institutional analysis and nuanced in terms of sensitivity to social, historical and political-economy issues that arise in the implementation of the rule of law. I particularly value its major focus on the need for balance between independence and accountability that afflict any rule of law reform: a balance which is missing in more one-sided accounts in the literature. I believe the book will be widely read and appreciated. Pranab Bardhan, University of California, Berkeley, US Within the law and development literature it is the most knowledgeable and comprehensive book on legal reform. I think that it will find a grateful readership among people working in development agencies, in humanitarian organizations and among scholars and students of development studies. Hans-Bernd Schäfer, University of Hamburg, Germany By identifying the key politico-economic reasons why rule-of-law reforms in developing countries have faltered and drawing out the implications for future strategy, this book is of immense importance and should be widely read. Anthony Ogus, CBE, FBA, University of Manchester, UK This important book addresses a number of key issues regarding the relationship between the rule of law and development. It presents a deep and insightful inquiry into the current orthodoxy that the rule of law is the panacea for the world s problems. The authors chart the precarious progress of law reforms both in overall terms and in specific policy areas such as the judiciary, the police, tax administration and access to justice, among others. They accept that the rule of law is necessarily tied to the success of development, although they propose a set of procedural values to enlighten this institutional approach. The authors also recognize that states face difficulties in implementing this institutional structures and identify the probable impediments, before proposing a rethink of law reform strategies and offering some conclusions about the role of the international community in the rule of law reform. Reviewing the progress in the rule of law reform in developing countries, specifically four regions Latin America, Africa, Central and Eastern Europe, and Asia this book makes a significant contribution to the literature. It will be of great interest to scholars and advanced students, as well as practitioners in the field, including international and bilateral aid agencies working on rule of law reform projects, and international and regional non-governmental organiza
The provision of legal technical assistance has in recent years become a major concern for international financial institutions, such as the World Bank, and for Western-based bilateral donor agencies. This book offers critical perspectives for the evaluation of legal technical assistance projects and contains proposals for action and research. Five chapters offer general perspectives on law, state and civil society and the remaining six case studies on themes such as economic regulation, agrarian reform, representation of women and access to justice.
The past thirty years have witnessed a transformation of government economic intervention in broad segments of industry throughout the world. Many industries historically subject to economic price and entry controls have been largely deregulated, including natural gas, trucking, airlines, and commercial banking. However, recent concerns about market power in restructured electricity markets, airline industry instability amid chronic financial stress, and the challenges created by the repeal of the Glass-Steagall Act, which allowed commercial banks to participate in investment banking, have led to calls for renewed market intervention. Economic Regulation and Its Reform collects research by a group of distinguished scholars who explore these and other issues surrounding government economic intervention. Determining the consequences of such intervention requires a careful assessment of the costs and benefits of imperfect regulation. Moreover, government interventions may take a variety of forms, from relatively nonintrusive performance-based regulations to more aggressive antitrust and competition policies and barriers to entry. This volume introduces the key issues surrounding economic regulation, provides an assessment of the economic effects of regulatory reforms over the past three decades, and examines how these insights bear on some of today’s most significant concerns in regulatory policy.
Recent high-profile corporate scandals—such as those involving Enron in the United States, Yukos in Russia, and Livedoor in Japan—demonstrate challenges to legal regulation of business practices in capitalist economies. Setting forth a new analytic framework for understanding these problems, Law and Capitalism examines such contemporary corporate governance crises in six countries, to shed light on the interaction of legal systems and economic change. This provocative book debunks the simplistic view of law’s instrumental function for financial market development and economic growth. Using comparative case studies that address the United States, China, Germany, Japan, Korea, and Russia, Curtis J. Milhaupt and Katharina Pistor argue that a disparate blend of legal and nonlegal mechanisms have supported economic growth around the world. Their groundbreaking findings show that law and markets evolve together in a “rolling relationship,” and legal systems, including those of the most successful economies, therefore differ significantly in their organizational characteristics. Innovative and insightful, Law and Capitalism will change the way lawyers, economists, policy makers, and business leaders think about legal regulation in an increasingly global market for capital and corporate governance.
China's entry into the World Trade Organization (WTO) has had a tremendous impact on the development and reform of China's legal system. This book focuses on the developments of China's legal system as well as its reform in the context of globalization. It covers various topics, including constitutional changes, law-based administration, and more.
Seventeen in a series of annual reports comparing business regulation in 190 economies, Doing Business 2020 measures aspects of regulation affecting 10 areas of everyday business activity.
