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How the Legal Environment Affects the Structure of Employment

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  • Marek Litzman

    (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

  • Luděk Kouba

    (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

Abstract

The quality of the institutional environment is considered a crucial determinant of economic growth. Low quality of the formal institutional environment can slow down economic development via various mechanisms described in the literature. The present paper will analyse formal institutional factors leading to the structure of employment that Murphy, Shleifer and Vishny (The Quarterly Journal of Economics, 1991) found to be associated with lower rate of economic growth. They assumed that a high proportion of lawyers in the country may be associated with slower economic development. Thus, the aim of the paper is to examine some of the parameters of institutional environment that can lead to such a distribution. Results show that quality of law measured by the World Bank (Doing Business database) and the Corruption Perception Index obtained from Transparency International may have some explanatory abilities regarding the structure of employment.

Suggested Citation

  • Marek Litzman & Luděk Kouba, 2015. "How the Legal Environment Affects the Structure of Employment," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(6), pages 2005-2009.
    • Handle: RePEc:mup:actaun:actaun_2015063062005
    DOI: 10.11118/actaun201563062005
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    References listed on IDEAS

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    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    2. repec:fth:harver:1532 is not listed on IDEAS
    3. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-414, May.
    4. Staffan Andersson & Paul M. Heywood, 2009. "The Politics of Perception: Use and Abuse of Transparency International's Approach to Measuring Corruption," Political Studies, Political Studies Association, vol. 57(4), pages 746-767, December.
    5. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    6. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    7. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 503-530.
    8. Staffan Andersson & Paul M. Heywood, 2009. "The Politics of Perception: Use and Abuse of Transparency International's Approach to Measuring Corruption," Political Studies, Political Studies Association, vol. 57, pages 746-767, December.
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    Cited by:

    1. Marek Litzman & Martin Machay, 2016. "Legal Regulations of Production Plans: Are They Unproductive?," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(6), pages 2039-2046.

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