The Guarantees of Freedom

Rafael La Porta (), Florencio Lopez-de-Silane, Cristian Pop-Eleches and Andrei Shleifer
Authors registered in the RePEc Author Service: Florencio Lopez-de-Silanes ()

No 8759, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Hayek (1960) distinguishes the institutions of English freedom, which guarantee the independence of judges from political interference in the administration of justice, from those of American freedom, which allow judges to restrain law-making powers of the sovereign through constitutional review. We create a data base of constitutional rules in 71 countries that reflect these institutions of English and American freedom, and ask whether these rules predict economic and political freedom in a cross-section of countries. We find that the English institutions of judicial independence are strong predictors of economic freedom and weaker predictors of political freedom. The American institutions of checks and balances are strong predictors of political but not of economic freedom. Judicial independence explains half of the positive effect of common law legal origin on measures of economic freedom.

JEL-codes: K0 N40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
Date: 2002-01
Note: CF PE
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Working Paper: The Guarantees of Freedom (2002)
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