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Lawyers and Politicians: The Impact of Organized Legal Professions on Institutional Reforms

  • Peter Grajzl


    (Department of Economics, Central European University)

  • Peter Murrell


    (Department of Economics, University of Maryland)

Organized legal professions are typically viewed by economists as rent-seeking interest groups. Starting from the observation that the legal professions have been central in institutional development in countries with the highest quality institutions, we add a different perspective, developing a model that identifies the link between the role of organized professions and the quality of reform. Professional review of interest-group reform proposals solves informational problems when the government's longevity is uncertain. This occurs even though the only direct effect of the organized profession is the one that usually attracts negative commentary, delay caused by deliberation. The profession's expertise makes the delay credible. The model predicts how the role of organized legal professions varies with democracy and political stability, showing that these are substitutes. Professional power and democracy are also substitutes. The predictions cast new light on why 1688 in England and 1789 in France had such different consequences, why the role of legal professions might be weaker in early post-communist transition than in the USSR, why transitions from autocracy are path dependent, why and when civil law and common law systems differ, and why post-independence institutions are of higher quality in settler than in extractive colonies. The paper foreshadows a rigorous analysis of civil society's contribution to economic development.

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Paper provided by University of Maryland, Department of Economics in its series Electronic Working Papers with number 04-002.

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Length: 56 pages
Date of creation: Oct 2004
Date of revision:
Handle: RePEc:umd:umdeco:04-002
Contact details of provider: Postal: Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742
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Order Information: Postal: Ms. Elizabeth Martinez, Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742

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  1. Daniel Berkowitz & Katharina Pistor & Jean-Francois Richard, 2000. "Economic Development, Legality, and the Transplant Effect," William Davidson Institute Working Papers Series 308, William Davidson Institute at the University of Michigan.
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  14. Persson, Torsten, 1998. "Economic Policy and Special Interest Politics," Economic Journal, Royal Economic Society, vol. 108(447), pages 310-27, March.
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  17. Mathias Dewatripont & Eric Maskin, 2004. "Credit and efficiency in centralized and decentralized economies," ULB Institutional Repository 2013/9605, ULB -- Universite Libre de Bruxelles.
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