'Helpful Governments' explores business impact of civil/common law traditions
by Mohammad AminAbstract The paper provides an alternative way of testing for the theory of legal origins, one based on firm’s perception of how helpful the government is for doing business. We argue that our approach based on firm perceptions offers a number of advantages over existing studies. Specifically, we are able to demonstrate that heavier regulation in civil law compared to common law is not viewed by businesses as an efficient and socially desirable response to disorder. Further, we are able to show a strong effect of legal tradition on government helpfulness even after controlling for various institutional measures known to be correlated with the legal tradition of countries. This finding suggests that there is more to legal tradition than what existing studies have unearthed. Full document.
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