Legal Institutions and Financial Development
A burgeoning literature finds that financial development exerts a first-order impact on long-run economic growth, which raises critical questions, such as why do some countries have well-developed growth-enhancing financial systems while others do...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/09/2534364/legal-institutions-financial-development http://hdl.handle.net/10986/18057 |
| id |
okr-10986-18057 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-180572021-04-23T14:03:41Z Legal Institutions and Financial Development Beck, Thorsten Levine, Ross FINANCIAL DEVELOPMENT LEGAL SYSTEMS PRIVATE PROPERTY RIGHTS CONTRACT ENFORCEMENT SHAREHOLDER AGREEMENTS INVESTOR PROTECTION INVESTMENT ENVIRONMENT CAPITAL MARKET GROWTH APITAL MOBILIZATION POLITICAL IDEOLOGIES RELIGIOUS LEGAL SYSTEMS RELIGIOUS IDENTITY GEOGRAPHY COMPETITIVE PRODUCTS SOCIAL CAPITAL INFORMAL REGULATION CREDITORS CORPORATE FINANCE CASE LAW APPELLATE COURTS ACTIONS ADMINISTRATIVE COURTS ADMINISTRATIVE LAW BANKRUPTCY CASE LAW CIVIL CODES CIVIL LAW CIVIL LAW SYSTEMS CODES COLONIES COLONIZATION COMMERCIAL LAW COMMON LAW COMMUNIST CONSTITUTIONALITY CORPORATE GOVERNANCE CORPORATE OWNERSHIP COURT DECISIONS CUSTOMARY LAW CUSTOMS DECISION-MAKING DECISION-MAKING PROCESS ECONOMIC DEVELOPMENT ENFORCEMENT FAMILIES FINAL JUDGMENT FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL SYSTEMS INDEPENDENT JUDICIARY INHERITANCE LAW INSTITUTIONAL DEVELOPMENT JUDGES JUDICIAL DECISIONS JUDICIAL PROCESSES JUDICIAL REVIEW JUDICIAL SYSTEMS JUDICIARY JURISPRUDENCE KINGS LAW LAWS LEGAL CULTURE LEGAL DOCTRINE LEGAL FORMALISM LEGAL INSTITUTIONS LEGAL LITERATURE LEGAL PROCEDURES LEGAL PROFESSIONS LEGAL RIGHTS LEGAL SYSTEM LEGAL SYSTEMS LEGISLATION LEGISLATIVE ACTIONS LEGISLATURE LITIGATION LOCAL LAWS NATIONS PRIVATE LAW PROPERTY RIGHTS PUBLIC LAW REVOLUTION ROMAN LAW SOCIAL CAPITAL STATE CONTROL STATE POWER UNJUST ENRICHMENT VOTING A burgeoning literature finds that financial development exerts a first-order impact on long-run economic growth, which raises critical questions, such as why do some countries have well-developed growth-enhancing financial systems while others do not? The law and finance theory focuses on the role of legal institutions in explaining international differences in financial development. First, the law and finance theory holds that in countries where legal systems enforce private property rights, support private contractual arrangements, and protect the legal rights of investors, savers are more willing to finance firms and financial markets flourish. Second, the different legal traditions that emerged in Europe over previous centuries and were spread internationally through conquest, colonization, and imitation help explain cross-country differences in investor protection, the contracting environment, and financial development today. But there are countervailing theories and evidence that challenge both parts of the law and finance theory. Many argue that there is more variation within than across legal origin families. Others question the central role of legal tradition and point to politics, religious orientation, or geography as the dominating factor driving financial development. Finally, some researchers question the central role of legal institutions and argue that other factors, such as a competitive products market, social capital, and informal rules are also important for financial development. Beck and Levine describe the law and finance theory, along with skeptical and competing views, and review empirical evidence on both parts of the law and finance view. 2014-04-25T17:03:01Z 2014-04-25T17:03:01Z 2003-09 http://documents.worldbank.org/curated/en/2003/09/2534364/legal-institutions-financial-development http://hdl.handle.net/10986/18057 English en_US Policy Research Working Paper;No. 3136 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
FINANCIAL DEVELOPMENT LEGAL SYSTEMS PRIVATE PROPERTY RIGHTS CONTRACT ENFORCEMENT SHAREHOLDER AGREEMENTS INVESTOR PROTECTION INVESTMENT ENVIRONMENT CAPITAL MARKET GROWTH APITAL MOBILIZATION POLITICAL IDEOLOGIES RELIGIOUS LEGAL SYSTEMS RELIGIOUS IDENTITY GEOGRAPHY COMPETITIVE PRODUCTS SOCIAL CAPITAL INFORMAL REGULATION CREDITORS CORPORATE FINANCE CASE LAW APPELLATE COURTS ACTIONS ADMINISTRATIVE COURTS ADMINISTRATIVE LAW BANKRUPTCY CASE LAW CIVIL CODES CIVIL LAW CIVIL LAW SYSTEMS CODES COLONIES COLONIZATION COMMERCIAL LAW COMMON LAW COMMUNIST CONSTITUTIONALITY CORPORATE GOVERNANCE CORPORATE OWNERSHIP COURT DECISIONS CUSTOMARY LAW CUSTOMS DECISION-MAKING DECISION-MAKING PROCESS ECONOMIC DEVELOPMENT ENFORCEMENT FAMILIES FINAL JUDGMENT FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL SYSTEMS INDEPENDENT JUDICIARY INHERITANCE LAW INSTITUTIONAL DEVELOPMENT JUDGES JUDICIAL DECISIONS JUDICIAL PROCESSES JUDICIAL REVIEW JUDICIAL SYSTEMS JUDICIARY JURISPRUDENCE KINGS LAW LAWS LEGAL CULTURE LEGAL DOCTRINE LEGAL FORMALISM LEGAL INSTITUTIONS LEGAL LITERATURE LEGAL PROCEDURES LEGAL PROFESSIONS LEGAL RIGHTS LEGAL SYSTEM LEGAL SYSTEMS LEGISLATION LEGISLATIVE ACTIONS LEGISLATURE LITIGATION LOCAL LAWS NATIONS PRIVATE LAW PROPERTY RIGHTS PUBLIC LAW REVOLUTION ROMAN LAW SOCIAL CAPITAL STATE CONTROL STATE POWER UNJUST ENRICHMENT VOTING |
| spellingShingle |
FINANCIAL DEVELOPMENT LEGAL SYSTEMS PRIVATE PROPERTY RIGHTS CONTRACT ENFORCEMENT SHAREHOLDER AGREEMENTS INVESTOR PROTECTION INVESTMENT ENVIRONMENT CAPITAL MARKET GROWTH APITAL MOBILIZATION POLITICAL IDEOLOGIES RELIGIOUS LEGAL SYSTEMS RELIGIOUS IDENTITY GEOGRAPHY COMPETITIVE PRODUCTS SOCIAL CAPITAL INFORMAL REGULATION CREDITORS CORPORATE FINANCE CASE LAW APPELLATE COURTS ACTIONS ADMINISTRATIVE COURTS ADMINISTRATIVE LAW BANKRUPTCY CASE LAW CIVIL CODES CIVIL LAW CIVIL LAW SYSTEMS CODES COLONIES COLONIZATION COMMERCIAL LAW COMMON LAW COMMUNIST CONSTITUTIONALITY CORPORATE GOVERNANCE CORPORATE OWNERSHIP COURT DECISIONS CUSTOMARY LAW CUSTOMS DECISION-MAKING DECISION-MAKING PROCESS ECONOMIC DEVELOPMENT ENFORCEMENT FAMILIES FINAL JUDGMENT FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL SYSTEMS INDEPENDENT JUDICIARY INHERITANCE LAW INSTITUTIONAL DEVELOPMENT JUDGES JUDICIAL DECISIONS JUDICIAL PROCESSES JUDICIAL REVIEW JUDICIAL SYSTEMS JUDICIARY JURISPRUDENCE KINGS LAW LAWS LEGAL CULTURE LEGAL DOCTRINE LEGAL FORMALISM LEGAL INSTITUTIONS LEGAL LITERATURE LEGAL PROCEDURES LEGAL PROFESSIONS LEGAL RIGHTS LEGAL SYSTEM LEGAL SYSTEMS LEGISLATION LEGISLATIVE ACTIONS LEGISLATURE LITIGATION LOCAL LAWS NATIONS PRIVATE LAW PROPERTY RIGHTS PUBLIC LAW REVOLUTION ROMAN LAW SOCIAL CAPITAL STATE CONTROL STATE POWER UNJUST ENRICHMENT VOTING Beck, Thorsten Levine, Ross Legal Institutions and Financial Development |
| geographic_facet |
Europe and Central Asia |
| relation |
Policy Research Working Paper;No. 3136 |
| description |
A burgeoning literature finds that
financial development exerts a first-order impact on
long-run economic growth, which raises critical questions,
such as why do some countries have well-developed
growth-enhancing financial systems while others do not? The
law and finance theory focuses on the role of legal
institutions in explaining international differences in
financial development. First, the law and finance theory
holds that in countries where legal systems enforce private
property rights, support private contractual arrangements,
and protect the legal rights of investors, savers are more
willing to finance firms and financial markets flourish.
Second, the different legal traditions that emerged in
Europe over previous centuries and were spread
internationally through conquest, colonization, and
imitation help explain cross-country differences in investor
protection, the contracting environment, and financial
development today. But there are countervailing theories and
evidence that challenge both parts of the law and finance
theory. Many argue that there is more variation within than
across legal origin families. Others question the central
role of legal tradition and point to politics, religious
orientation, or geography as the dominating factor driving
financial development. Finally, some researchers question
the central role of legal institutions and argue that other
factors, such as a competitive products market, social
capital, and informal rules are also important for financial
development. Beck and Levine describe the law and finance
theory, along with skeptical and competing views, and review
empirical evidence on both parts of the law and finance view. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Beck, Thorsten Levine, Ross |
| author_facet |
Beck, Thorsten Levine, Ross |
| author_sort |
Beck, Thorsten |
| title |
Legal Institutions and Financial Development |
| title_short |
Legal Institutions and Financial Development |
| title_full |
Legal Institutions and Financial Development |
| title_fullStr |
Legal Institutions and Financial Development |
| title_full_unstemmed |
Legal Institutions and Financial Development |
| title_sort |
legal institutions and financial development |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2003/09/2534364/legal-institutions-financial-development http://hdl.handle.net/10986/18057 |
| _version_ |
1764438819741892608 |