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The Rule of Law and Economic Growth: Where are We?

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  • Haggard, Stephan
  • Tiede, Lydia
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    Abstract

    Summary It is widely assumed that the rule of law is essential for economic growth. However, the rule of law is clearly a multidimensional concept, encompassing a variety of discrete components from security of person and property rights, to checks on government and control of corruption. We review the theory underlying these different causal mechanisms linking the rule of law to economic growth, and provide an introduction to some outstanding measurement issues. We find that the correlation among different components of the rule of law concept are not tight among developing countries and that some inferences about the effects of property rights protection may not be warranted.

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    Bibliographic Info

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 39 (2011)
    Issue (Month): 5 (May)
    Pages: 673-685

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    Handle: RePEc:eee:wdevel:v:39:y:2011:i:5:p:673-685

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    Web page: http://www.elsevier.com/locate/worlddev

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    Keywords: rule of law economic growth institutions economic volatility developing countries;

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    Cited by:
    1. Law, Siong Hook & Lim, Thong Cheen & Ismail, Normaz Wana, 2013. "Institutions and economic development: A Granger causality analysis of panel data evidence," Economic Systems, Elsevier, vol. 37(4), pages 610-624.
    2. Dawson, Andrew, 2013. "The Social Determinants of the Rule of Law: A Comparison of Jamaica and Barbados," World Development, Elsevier, vol. 45(C), pages 314-324.
    3. Voigt, Stefan & Gutmann, Jerg, 2013. "Turning cheap talk into economic growth: On the relationship between property rights and judicial independence," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 66-73.

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