Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Standardization Of Law And Its Effect On Developing Economies

Contents:

Author Info

  • Katharina PISTOR
Registered author(s):

    Abstract

    A widely used tool in law and development programmes is the supply of well-designed laws from the outside. This method of law development has now been embraced by international organizations as a way to improve the legal framework for global markets. The International Monetary Fund (IMF) has endorsed attempts by various organizations to develop legal standards with special emphasis on corporate and financial institution laws. The common idea behind these attempts is that the supplied laws once incorporated into domestic legal systems will improve the existing legal framework, and thus further economic development. This paper takes issue with this concept of law development. It argues that for developing effective legal systems, the contents of the supplied laws is of only secondary importance to the process of law development and the compatibility of the new laws with pre-existing conditions, including existing legislation and legal institutions. Three factors account for this: (i) only a few rules are freestanding, i.e. can be fully understood and enforced without reference to other legal terms and concepts; (ii) law is a cognitive institution, and the application and enforcement of rules is determined by the perception of new rules by users and enforcers in the receiving country; and (iii) effective law enforcement is a function of the extent of voluntary compliance and available resources in a given country. A closer analysis of the rules whose standardization is currently proposed for building an international financial architecture shows that the implementation of these standards and their effectuation will require more efforts by the law receiving countries than underwriting them, if the goals of standardizing the law are to be achieved. The paper discusses the implications for countries wishing to attract foreign investments by adopting the new standards, and makes some proposals for creating more effective legal systems in the area of financial law.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.unctad.org/en/Docs/pogdsmdpbg24d4.en.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by United Nations Conference on Trade and Development in its series G-24 Discussion Papers with number 4.

    as in new window
    Length:
    Date of creation: 2000
    Date of revision:
    Handle: RePEc:unc:g24pap:4

    Contact details of provider:
    Postal: Palais des Nations, CH - 1211 Geneva 10
    Phone: +41 22 907 12 34
    Fax: +41 22 907 00 43
    Email:
    Web page: http://www.unctad.org/Templates/Page.asp?intItemID=2101&lang=1
    More information through EDIRC

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Haizhou Huang, 2000. "Financial Institutions, Financial Contagion, and Financial Crises," Econometric Society World Congress 2000 Contributed Papers 1595, Econometric Society.
    2. Erik Berglof & Ernst-Ludwig von Thadden, 1999. "The Changing Corporate Governance Paradigm: Implications for Transition and Developing Countries," William Davidson Institute Working Papers Series 263, William Davidson Institute at the University of Michigan.
    3. Daniel Berkowitz & Karina Pistor & Jean-Francois Richard, 2001. "Economic Development, Legality, and the Transplant Effect," William Davidson Institute Working Papers Series 410, William Davidson Institute at the University of Michigan.
    4. Katharina Pistor, 2000. "Patterns of legal change: shareholder and creditor rights in transition economies," Working Papers, European Bank for Reconstruction and Development, Office of the Chief Economist 49, European Bank for Reconstruction and Development, Office of the Chief Economist.
    5. Levine, Ross, 1998. "The Legal Environment, Banks, and Long-Run Economic Growth," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 30(3), pages 596-613, August.
    6. Roberta Romano, 1998. "Empowering Investors: A Market Approach to Securities Regulation," Yale School of Management Working Papers, Yale School of Management ysm74, Yale School of Management.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Mariano Tommasi, 2002. "Crisis, Political Institutions and Policy Reform: It Is Not the Policy, It Is the Polity, Stupid," Working Papers 49, Universidad de San Andres, Departamento de Economia, revised Jun 2004.
    2. Sharun W. Mukand & Dani Rodrik, 2005. "In Search of the Holy Grail: Policy Convergence, Experimentation, and Economic Performance," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 374-383, March.
    3. Dani Rodrik, 2011. "The Future of Economic Convergence," NBER Working Papers 17400, National Bureau of Economic Research, Inc.
    4. Mariano Tommasi, 2003. "Crises, institutions politiques et réformes politiques : le bon, le mauvais et l'affreux," Revue d’économie du développement, De Boeck Université, vol. 17(2), pages 49-81.
    5. Dani Rodrik, 2003. "Growth Strategies," NBER Working Papers 10050, National Bureau of Economic Research, Inc.
    6. Schleyer, Christian & Theesfeld, Insa & Hagedorn, Konrad & Aznar, Olivier & Callois, Jean-Marc & Verburg, Rene & Yelkouni, Martin & Olsson, Johanna Alkan, 2007. "Approach towards an operational tool to apply institutional analysis for the assessment of policy feasibility within SEAMLESS-IF," Reports, SEAMLESS: System for Environmental and Agricultural Modelling, Linking European Science and Society 9295, SEAMLESS: System for Environmental and Agricultural Modelling, Linking European Science and Society.
    7. Dani Rodrik, 2000. "Trade Policy Reform as Institutional Reform," IDB Publications 8750, Inter-American Development Bank.
    8. Benu Schneider, 2005. "Do Global Standards And Codes Prevent Financial Crises? Some Proposals On Modifying The Standards-Based Approach," UNCTAD Discussion Papers, United Nations Conference on Trade and Development 177, United Nations Conference on Trade and Development.
    9. Mariano Tommasi & Pablo T. Spiller & Ernesto Stein, 2003. "Political Institutions, Policymaking Processes, and Policy Outcomes. An Intertemporal Transactions Framework," Working Papers 59, Universidad de San Andres, Departamento de Economia, revised Jul 2003.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:unc:g24pap:4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rachid Bouhia).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.