Publication:
Legal Institutions and Financial Development

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dc.contributor.authorLevine, Ross
dc.contributor.authorBeck, Thorsten
dc.date.accessioned2014-04-25T17:03:01Z
dc.date.available2014-04-25T17:03:01Z
dc.date.issued2003-09
dc.description.abstractA 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.en
dc.identifierhttp://documents.worldbank.org/curated/en/2003/09/2534364/legal-institutions-financial-development
dc.identifier.urihttps://hdl.handle.net/10986/18057
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 3136
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectLEGAL SYSTEMS
dc.subjectPRIVATE PROPERTY RIGHTS
dc.subjectCONTRACT ENFORCEMENT
dc.subjectSHAREHOLDER AGREEMENTS
dc.subjectINVESTOR PROTECTION
dc.subjectINVESTMENT ENVIRONMENT
dc.subjectCAPITAL MARKET GROWTH
dc.subjectAPITAL MOBILIZATION
dc.subjectPOLITICAL IDEOLOGIES
dc.subjectRELIGIOUS LEGAL SYSTEMS
dc.subjectRELIGIOUS IDENTITY
dc.subjectGEOGRAPHY
dc.subjectCOMPETITIVE PRODUCTS
dc.subjectSOCIAL CAPITAL
dc.subjectINFORMAL REGULATION
dc.subjectCREDITORS
dc.subjectCORPORATE FINANCE
dc.subjectCASE LAW
dc.subjectAPPELLATE COURTS ACTIONS
dc.subjectADMINISTRATIVE COURTS
dc.subjectADMINISTRATIVE LAW
dc.subjectBANKRUPTCY
dc.subjectCASE LAW
dc.subjectCIVIL CODES
dc.subjectCIVIL LAW
dc.subjectCIVIL LAW SYSTEMS
dc.subjectCODES
dc.subjectCOLONIES
dc.subjectCOLONIZATION
dc.subjectCOMMERCIAL LAW
dc.subjectCOMMON LAW
dc.subjectCOMMUNIST
dc.subjectCONSTITUTIONALITY
dc.subjectCORPORATE GOVERNANCE
dc.subjectCORPORATE OWNERSHIP
dc.subjectCOURT DECISIONS
dc.subjectCUSTOMARY LAW
dc.subjectCUSTOMS
dc.subjectDECISION-MAKING
dc.subjectDECISION-MAKING PROCESS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectENFORCEMENT
dc.subjectFAMILIES
dc.subjectFINAL JUDGMENT
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SYSTEMS
dc.subjectINDEPENDENT JUDICIARY
dc.subjectINHERITANCE LAW
dc.subjectINSTITUTIONAL DEVELOPMENT
dc.subjectJUDGES
dc.subjectJUDICIAL DECISIONS
dc.subjectJUDICIAL PROCESSES
dc.subjectJUDICIAL REVIEW
dc.subjectJUDICIAL SYSTEMS
dc.subjectJUDICIARY
dc.subjectJURISPRUDENCE
dc.subjectKINGS
dc.subjectLAW
dc.subjectLAWS
dc.subjectLEGAL CULTURE
dc.subjectLEGAL DOCTRINE
dc.subjectLEGAL FORMALISM
dc.subjectLEGAL INSTITUTIONS
dc.subjectLEGAL LITERATURE
dc.subjectLEGAL PROCEDURES
dc.subjectLEGAL PROFESSIONS
dc.subjectLEGAL RIGHTS
dc.subjectLEGAL SYSTEM
dc.subjectLEGAL SYSTEMS
dc.subjectLEGISLATION
dc.subjectLEGISLATIVE ACTIONS
dc.subjectLEGISLATURE
dc.subjectLITIGATION
dc.subjectLOCAL LAWS
dc.subjectNATIONS
dc.subjectPRIVATE LAW
dc.subjectPROPERTY RIGHTS
dc.subjectPUBLIC LAW
dc.subjectREVOLUTION
dc.subjectROMAN LAW
dc.subjectSOCIAL CAPITAL
dc.subjectSTATE CONTROL
dc.subjectSTATE POWER
dc.subjectUNJUST ENRICHMENT
dc.subjectVOTING
dc.titleLegal Institutions and Financial Developmenten
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.crosscuttingsolutionareaGender
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2003/09/2534364/legal-institutions-financial-development
okr.globalpracticeSocial Protection and Labor
okr.globalpracticeGovernance
okr.guid618591468751789872
okr.identifier.doi10.1596/1813-9450-3136
okr.identifier.externaldocumentum000160016_20031006122849
okr.identifier.internaldocumentum2534364
okr.identifier.reportWPS3136
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2003/10/06/000160016_20031006122849/Rendered/PDF/wps3136.pdfen
okr.region.administrativeEurope and Central Asia
okr.topicLaw and Development::Judicial System Reform
okr.topicLaw and Development::Legal Products
okr.topicGender::Gender and Law
okr.topicSocial Protections and Labor::Labor Policies
okr.topicGovernance::National Governance
okr.topicLegal Institutions of the Market Economy
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume1 of 1
relation.isAuthorOfPublication4694cd5a-bd90-594b-abe2-f5b681139e6d
relation.isAuthorOfPublication.latestForDiscovery4694cd5a-bd90-594b-abe2-f5b681139e6d
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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