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Contract Intensive Money

Author

Listed:
  • Clague, Christopher
  • Keefer, Philip
  • Knack, Stephen
  • Olson, Mancur

Abstract

This paper makes two contributions to the literature. First, it introduces a new, easily accessed and objective measure of the enforceability of contracts and the security of property rights. Second, it uses this measure to provide additional and more direct evidence about the importance of secure property and contract rights for economic growth and investment. In the analysis below, we briefly review the arguments that link the quality of third-party contract enforcement to growth and investment. We then show how the new measure, which we call “contract-intensive money” or CIM, relates to the subjective measures employed in the literature. We test empirically the proposition that this variable, as a measure of the security of contract and property rights, is positively related to income, growth and investment.

Suggested Citation

  • Clague, Christopher & Keefer, Philip & Knack, Stephen & Olson, Mancur, 1999. "Contract Intensive Money," MPRA Paper 25717, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25717
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    References listed on IDEAS

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    Cited by:

    1. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2006. "Measuring Governance Using Cross-Country Perceptions Data," Chapters,in: International Handbook on the Economics of Corruption, chapter 2 Edward Elgar Publishing.
    2. Una Okonkwo Osili & Anna L. Paulson, 2006. "What can we learn about financial access from U.S. immigrants?," Working Paper Series WP-06-25, Federal Reserve Bank of Chicago.
    3. Alberto Chong & Luisa Zanforlin, 2004. "Inward-Looking Policies, Institutions, Autocrats, and Economic Growth in Latin America: An Empirical Exploration," Public Choice, Springer, vol. 121(3), pages 335-361, February.
    4. Loayza, Norman V. & Soto, Raimundo, 2004. "On the measurement of market-oriented reforms," Policy Research Working Paper Series 3371, The World Bank.
    5. Nathan Perry & Carlos Schönerwald, 2009. "Institutions, Geography, and Terms of Trade in Latin America: A Longitudinal Econometric Analysis," Working Paper Series, Department of Economics, University of Utah 2009_04, University of Utah, Department of Economics.
    6. Quan Le & Paul J. Zak, 2001. "Political Risk and Capital Flight," Claremont Colleges Working Papers 2001-10, Claremont Colleges.
    7. Jalilian, Hossein & Kirkpatrick, Colin & Parker, David, 2003. "Creating the Conditions for International Business Expansion: The Impact of Regulation on Economic Growth in Developing Countries - A Cross-Country Analysis," Centre on Regulation and Competition (CRC) Working papers 30689, University of Manchester, Institute for Development Policy and Management (IDPM).
    8. Anderson, Michael & Branchflower, Andrew & Moreno-Torres, Magui & Besancon, Marie, 2005. "Measuring Capacity And Willingness For Poverty Reduction In Fragile States," PRDE Working Papers 12820, Department for International Development (DFID) (UK).
    9. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
    10. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2003. "Governance Matters III: Governance Indicators for 1996-2002," Macroeconomics 0308006, University Library of Munich, Germany.
    11. Vladimir Mau & Konstantin Yanovskiy, 2002. "Political and Legal Factors of Economic Growth in Russian Regions," Post-Communist Economies, Taylor & Francis Journals, vol. 14(3), pages 321-339.
    12. repec:bpj:lawdev:v:10:y:2017:i:1:p:89-118:n:3 is not listed on IDEAS
    13. Jeffry Jacob & Thomas Osang, 2007. "Institutions, Geography and Trade: A Panel Data Study," Departmental Working Papers 0706, Southern Methodist University, Department of Economics.
    14. Thomas Flores & Irfan Nooruddin, 2009. "Financing the peace: Evaluating World Bank post-conflict assistance programs," The Review of International Organizations, Springer, vol. 4(1), pages 1-27, March.
    15. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages 22-49, February.
    16. Oguzhan Dincer & Christopher Ellis, 2005. "Predation, Protection, and Accumulation: Endogenous Property Rights in an Overlapping Generations Growth Model," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 435-455, August.
    17. World Bank, 2011. "Republic of Tajikistan - Country Economic Memorandum : Tajikistan’s Quest for Growth: Stimulating Private Investment," World Bank Other Operational Studies 2761, The World Bank.
    18. Vatcharin Sirimaneetham, 2006. "What drives liberal policies in developing countries?," Bristol Economics Discussion Papers 06/587, Department of Economics, University of Bristol, UK.
    19. Lawrence King & Osvaldo Gómez Martínez, 2010. "Property Rights Reform and Development: A Critique of the Cross-National Regression Literature," Working Papers wp216, Political Economy Research Institute, University of Massachusetts at Amherst.
    20. Knack, Stephen, 2002. "Social capital, growth and poverty: a survey of cross-country evidence," MPRA Paper 24893, University Library of Munich, Germany, revised 0200.
    21. Una Okonkwo Osili & Anna L. Paulson, 2004. "Institutional quality and financial market development: evidence from international migrants in the U.S," Working Paper Series WP-04-19, Federal Reserve Bank of Chicago.
    22. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2003. "Government matters III : governance indicators for 1996-2002," Policy Research Working Paper Series 3106, The World Bank.
    23. Ryan A. Compton & Daniel C. Giedeman & Noel D. Johnson, 2010. "Investing In Institutions," Economics and Politics, Wiley Blackwell, vol. 22(3), pages 419-445, November.
    24. Sanz Villarroya, Isabel & Prados de la Escosura, Leandro, 2006. "Contract enforcement and Argentina's long-run decline," IFCS - Working Papers in Economic History.WH wp06-06, Universidad Carlos III de Madrid. Instituto Figuerola.
    25. Sanz Villarroya, Isabel, 2003. "Derechos de propiedad y crecimiento económico en Argentina : 1875-1990," IFCS - Working Papers in Economic History.WH dh030403, Universidad Carlos III de Madrid. Instituto Figuerola.

    More about this item

    Keywords

    contract enforcement; property rights; governance; growth;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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