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Measuring the law: Sécurité juridique as a watermark

  • Raynouard, Arnaud
  • Kerhuel, Anne-Julie
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    The relationship between law and economic development remains enigmatic. Broadly speaking, there is no doubt that legal mechanisms for social control (or ‘institutions’, to use North's words) play a major role. Nevertheless, the impact of legal organization on economic development has not been clearly identified. Despite the progress attained by major studies in recent years, they have not definitively resolved whether law is a condition precedent to economic development, or rather a supporting element thereof, much less whether a particular legal system is necessarily and universally optimal. The failure of collectivization is evident. However, the open market model has multiple variants of the state's role and the degrees of regulation. A first approximation challenging the relevance of economic analysis of this topic notes the frequent confusion between legal system, legal rule, administrative and bureaucratic organization, political system, substantive law, and legal practice. The confusion produces uncertainty about the purpose of the evaluation. The Doing Business reports aspire to measure the ease of doing business in a country, within its legal framework. However, contrary to the oft-advanced idea, this approach involves an assessment, not of the legal system within its functional organization but rather of public policies and their implementation. In this regard, hasty conclusions recognizing a correlation between the ease of doing business and membership in a particular legal family are of dubious validity. Evaluating legal systems per se requires an assessment of the proper applicability of rules that fall within the corpus of the law, the predictability of legal solutions and the substantive guarantee of the rights recognized by legal rules. This approach perforce raises the question of legal certainty. The establishment of an index of legal certainty will contribute to an analysis of this characteristic, which is an essential attribute of the law in various national systems and at various stages of the development of norms and their implementation. This study provides rationales for a legal certainty index.

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    Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/11683.

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    Date of creation: 2011
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    Publication status: Published in International Journal of Disclosure and Governance, 2011, Vol. 8, no. 4. pp. 360-379.Length: 19 pages
    Handle: RePEc:dau:papers:123456789/11683
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    1. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. " Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-50, July.
    2. Brunnetti, Aymo & Kisunko, Gregory & Weder, Beatrice, 1997. "Credibility of rules and economic growth : evidence from a worldwide survey of the private sector," Policy Research Working Paper Series 1760, The World Bank.
    3. Daron Acemoglu & Simon Johnson & James Robinson, 2004. "Institutions As The Fundamental Cause Of Long-Run Growth," DOCUMENTOS CEDE 002889, UNIVERSIDAD DE LOS ANDES-CEDE.
    4. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2002. "Law and Finance: why Does Legal Origin Matter?," NBER Working Papers 9379, National Bureau of Economic Research, Inc.
    5. Karla Hoff & Joseph E. Stiglitz, 2005. "The Creation of the Rule of Law and the Legitimacy of Property Rights: The Political and Economic Consequences of a Corrupt Privatization," NBER Working Papers 11772, National Bureau of Economic Research, Inc.
    6. Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, . "Law and Finance," Working Paper 19451, Harvard University OpenScholar.
    7. Aymo Brunetti & Beatrice Weder, 1998. "Investment and institutional uncertainty: A comparative study of different uncertainty measures," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 134(3), pages 513-533, September.
    8. Garoupa, Nuno & Ogus, Anthony, 2003. "A Strategic Interpretation of Legal Transplants," CEPR Discussion Papers 4123, C.E.P.R. Discussion Papers.
    9. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, volume 1, number 5474.
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