As development policy moves away from considering the state as the primary driver of economic growth it is necessary to consider the institutional foundations of the market economy. It has been argued that without legal systems that allow for innovation and enterprise, all other attempts to improve economic growth are destined to fail.
Law and Development offers an unparalleled assessment of the role of legal systems in development by extending the analytical framework of New Institutional Economics (NIE). Using empirical tests to critique Legal Origin Theory, and assess the role of culture in the formation of the legal environment, this book proposes that cultural factors are much more significant than allowed for by previous frameworks.
This book will be invaluable for students of law and development, as well as academics researching the role of institutions. It provides a sound framework for considering legal reform and offers nuanced insights for policymakers interested in economic development.
‘Law and Development is an excellent contribution to our understanding of the role of law in market-led development. The book provides a masterful assessment of theories of development and the role of the legal system. In a fascinating and exceptionally well-written and systematic analysis, Professor Stephen uses new institutional economics to develop a theory of the role of law in development and to analyze empirically the importance of the financial sector for growth, the importance of the legal system for financial sector development, and the role of culture in determining the effectiveness of the legal system.’
– Mary M. Shirley, President of the Ronald Coase Institute, US
‘Professor Stephen’s book provides a masterful review and critical assessment of the implications of the New Institutional Economics for market-based economic development, with an insightful focus on transaction costs, contract, property rights, institutions, and culture. It is the most compact and accessible overview of this influential body of scholarship available to date.’
– Michael Trebilcock, University of Toronto, Canada
Frank H. Stephen, Emeritus Professor of Regulation, School of Law, University of Manchester, UK.