Contract Enforcement: A Political Economy Model of Legal Development
نویسنده
چکیده
This paper examines the development of legal contract enforcement in a political economy context. The key insight is that, in earlier times when relational contracts are used predominantly, the rich elite agents must have enjoyed comparative advantages in using relational contracts than the poor and thus would bene t less from investing in legal enforcement. The paper nds that high income inequality, the elite rule, and slow legal development constitute a cluster of institutions that are mutually reinforcing each other. The existence of social communities improves contract enforcement through multilateral relationships among agents within the same community, but it tends to slow down legal development. JEL: O1, K49, C72.
منابع مشابه
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