Law, Politics, and Finance

Beck, Thorsten ; Demirguc-Kunt, Asli ; Levine, Ross

World Bank, Washington, DC

关键词: ACTIONS;    ACTS;    ADMINISTRATIVE COURTS;    AUTHORITY;    BANKRUPTCY;   

DOI  :  10.1596/1813-9450-2585
RP-ID  :  WPS2585

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The authors assess three establishedtheories about the historical determinants of financialdevelopment. They also propose an augmented version of oneof these theories. The law and finance view, stresses thatdifferent legal traditions emphasize, to differing degrees,the rights of individual investors relative to the state,which has important ramifications for financial development.The dynamic law and finance vie, augments the law andfinance view, stressing that legal traditions also differ intheir ability to adapt to changing conditions. The politicsand finance view, rejects the central role of legaltradition, stressing instead that political factors shapefinancial development. The endowment view, argues that themortality rates of European settlers, as they colonizedvarious parts of the globe, influenced the institutions theyinitially created, which has had enduring effects oninstitutions today. When initial conditions produced anunfavorable environment for European settlers, colonialiststended to create institutions designed to extract resourcesexpeditiously, not to foster long-run prosperity. Theauthors' empirical results are most consistent withtheories that stress the role of legal tradition. Theresults provide qualified support for the endowment view.The data are least consistent with theories that focus onspecific characteristics of the political structure,although politics can obviously affect the financial sector.In other words, legal origin - whether a country has aBritish, French, German, or Scandinavian legal heritage -helps explain the development of the country'sfinancial institutions today, even after other factors arecontrolled for. Countries with a French legal tradition,tend to have weaker financial institutions, while those withcommon law, and German civil laws, tend to have strongerfinancial institutions.