Legal Traditions, Legal Reforms and Economic Performance (eBook)

Daniel Oto-Peralias is lecturer (Assistant Professor) at St Andrews University School of Management. He holds university degrees in Management and Business Administration and in Law, and has conducted postgraduate studies in economics and politics. He received his PhD from Pablo de Olavide University (Spain) in June 2014. His research focuses on the fields of law and finance and economic development, particularly on the role played by inequality and institutions in economic activity and welfare, paying special attention to the historical processes involved. Daniel has contributed to many economics conferences and has published articles in prestigious economic journals such as Journal of the European Economic Association, Journal of Economic Growth, Journal of Money, Credit, and Banking, and Journal of Law and Economics. During 2016 he undertook consultancy work for the World Bank on the subject of law and development."  Diego Romero-Ávila is Associate Professor at Pablo de Olavide University. He has been Research Fellow at the European Central Bank, Visiting Professor at Vienna University of Economics and Business, and External Consultant at the World Bank. His research interests lie in the fields of Macroeconomics and Development Economics. He has published articles in such academic journals as International Economic Review, Journal of the European Economic Association, Journal of Economic Growth, Journal of Law and Economics, Journal of Money, Credit and Banking, and Economic Inquiry, among others.

Acknowledgements 6
Abstract 7
Contents 9
Chapter 1: Introduction 11
Chapter 2: Revisiting the Legal Origins Hypothesis: A Brief Review of the Literature 14
2.1 The Legal Origins View 14
2.2 Arguments Based on Colonialism and the Distribution of Legal Traditions Around the World 18
2.3 Arguments Based on Political Economy 21
2.4 Arguments Based on Measurement and Recoding of Legal Data 23
2.5 Recapitulation 26
Box: Criticisms to the Legal Origins Theory 27
Chapter 3: Data Description 30
3.1 Legal and Regulatory Indicators 30
3.2 Economic and Financial Outcomes 36
3.3 Description of Doing Business Reforms Since 2006 38
Chapter 4: Literature Review on the Effect of the Ease of Doing Business on Economic and Financial Outcomes 46
4.1 Research on Protecting Minority Investors 46
4.2 Research on Getting Credit and Information Disclosure 48
4.3 Research on Contract Enforcement 51
4.4 Research on Resolving Insolvency 53
4.5 Research on Starting a Business 56
4.6 Research on Registering a Property and Protecting Property Rights 59
4.7 Research on Dealing with Construction Permits 61
4.8 Research on Paying Taxes 62
4.9 Research on Trading Across Borders 63
Chapter 5: Legal Change Within Legal Traditions and Convergence 66
5.1 Has There Been Legal Change over the Period 2006-2014? 66
5.2 Have Legal Reforms Reduced the Differences in Legal Rules/Regulations Across Legal Traditions? 72
5.3 Has There Been Convergence in Legal and Regulatory Standards Among Legal Traditions over the Period 2006-2014? 77
5.4 More on Convergence: Robustness Checks 83
Chapter 6: Legal Rules Variation and Countries´ Economic and Financial Performance 93
6.1 The Effect of Legal Rules and Regulations on Economic and Financial Performance 94
6.2 Distinguishing the Circumstances Under Which the Effect Takes Place 98
6.2.1 Differentiating by Level of Development 99
6.2.2 Differentiating by Institutional Quality 104
6.2.3 Differentiating by Legal Tradition 104
6.2.4 Interacting Legal and Regulatory Indicators with the Level of Development 117
6.3 Graphical Analysis of the Relationship Between Legal Change and Financial and Economic Development 117
Chapter 7: Sensitivity Analyses on the Effect of Legal Rules Variation on Economic and Financial Performance 128
7.1 Using Alternative Legal Indicators 128
7.2 Using Alternative Panel Estimations: Difference and System GMM Estimators 132
7.3 General Discussion 141
Chapter 8: The Effectiveness of Legal Reforms and the Gap Between Law on the Books and the Reality on the Ground 143
8.1 Explanatory Factors for the Effectiveness of Legal Reforms: A Preliminary Analysis 144
8.2 Gap Between Law on the Books and the Reality on the Ground 152
8.3 Gap Between Law on the Books and Law in Action 160
8.4 Summary of Results 167
Chapter 9: Conclusions 168
Appendix 171
References 248