The Rule of Law and Economic Growth: Where are We?

It is widely assumed that the rule of law is essential for economic growth. However, the rule of law is clearly a multidimensional concept, encompassing a variety of discrete components from security of person and property rights, to checks on government and control of corruption. We review the theo...

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Bibliographic Details
Published in:World development 2011-05, Vol.39 (5), p.673-685
Main Authors: Haggard, Stephan, Tiede, Lydia
Format: Article
Language:English
Subjects:
Causal analysis
Causality
Conceptualization
Correlation
Correlation analysis
Developing countries
Economic growth
Economic theory
economic volatility
Institutions
Law
Measurement
Property rights
Rule of law
rule of law economic growth institutions economic volatility developing countries
Studies
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Summary:It is widely assumed that the rule of law is essential for economic growth. However, the rule of law is clearly a multidimensional concept, encompassing a variety of discrete components from security of person and property rights, to checks on government and control of corruption. We review the theory underlying these different causal mechanisms linking the rule of law to economic growth, and provide an introduction to some outstanding measurement issues. We find that the correlation among different components of the rule of law concept are not tight among developing countries and that some inferences about the effects of property rights protection may not be warranted.
ISSN:0305-750X
1873-5991
DOI:10.1016/j.worlddev.2010.10.007