Publication:
Development and the Interaction of Enforcement Institutions

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dc.contributor.authorDhillon, Amrita
dc.contributor.authorRigolini, Jamele
dc.date.accessioned2012-03-30T07:33:51Z
dc.date.available2012-03-30T07:33:51Z
dc.date.issued2011
dc.description.abstractWe examine how formal and informal contract enforcing institutions interact in a competitive market with asymmetric information where consumers do not observe quality before purchase. Firm level incentives for producing high quality can be achieved with an informal enforcement mechanism, reputation, the efficacy of which is enhanced by consumers investing in "connectedness;" or with a formal mechanism, legal enforcement, the effectiveness of which can be reduced by means of bribes. We show that formal and informal enforcement mechanisms do not necessarily substitute each other: while high levels of judicial efficiency decrease consumers' incentives to connect, higher consumers' connectedness leads to higher levels of judicial efficiency. We then look at how the equilibrium institutional mix evolves with the level of development. In doing so we show the presence of a new, physical, channel that can affect institutions--i.e., the frequency of bad productivity shocks that, in less developed settings, can impact on firms' incentives to cheat.en
dc.identifier.citationJournal of Public Economics
dc.identifier.issn00472727
dc.identifier.urihttps://hdl.handle.net/10986/5647
dc.language.isoEN
dc.relation.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.rights.holderWorld Bank
dc.subjectInstitutions: Design, Formation, and Operations D020
dc.subjectAsymmetric and Private Information D820
dc.subjectContract Law K120
dc.subjectIllegal Behavior and the Enforcement of Law K420
dc.subjectFormal and Informal Sectors
dc.subjectShadow Economy
dc.subjectInstitutional Arrangements O170
dc.titleDevelopment and the Interaction of Enforcement Institutionsen
dc.title.alternativeJournal of Public Economicsen
dc.typeJournal Articleen
dc.typeArticle de journalfr
dc.typeArtículo de revistaes
dspace.entity.typePublication
okr.doctypeJournal Article
okr.externalcontentExternal Content
okr.identifier.externaldocumentum585
okr.journal.nbpages79-87
okr.language.supporteden
okr.peerreviewAcademic Peer Review
okr.relation.associatedurlhttp://dx.doi.org/10.1016/j.jpubeco.2010.09.013
okr.relation.associatedurlhttp://search.ebscohost.com/login.aspx?direct=true&db=eoh&AN=1163376&site=ehost-live
okr.relation.associatedurlhttp://www.elsevier.com/locate/inca/505578/
okr.volume95
relation.isAuthorOfPublicationb51f7805-9174-58dc-a585-0ca1b7edbebc
relation.isAuthorOfPublication.latestForDiscoveryb51f7805-9174-58dc-a585-0ca1b7edbebc
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