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Law and the Poverty of Nations
  • Robert D Cooter, University of California, Berkeley
  • Hans Bernd Schaefer

This book manuscript uses the economic analysis of law and the theory of economic development to explain why some poor countries remain poor and others become rich. The book contributes to the economic analysis of law by reformulating its central conclusions in terms of growth, not static efficiency, and it contributes to the economic theory of growth by probing its legal foundations. The manuscript’s style is accessible to non-specialists and its substance challenges specialists. The book’s theme is that sustained growth comes from economic innovation, which combines novel ideas and capital. Combining them poses a “double trust problem” -- the innovators must trust investors with their ideas, and the investors must trust the innovators with their money. To solve this problem, the parties need three types of law: property, contracts, and business law (principally corporate law). So law is fundamental to economic growth in rich and poor countries. This book focuses on the legal problems to growth in poor countries, which are somewhat different than in rich countries.

  • law and economic development,
  • developing countries,
  • national overty
Publication Date
February, 2009
Citation Information
Robert D Cooter and Hans Bernd Schaefer. "Law and the Poverty of Nations" (2009)
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