Importance of legal system

The importance of an effective legal system is well known. I came across this excellent paperfrom Shleifer et al on the same.

The team discusses why people do not believe in legal system and how badly it effects economic activity. One should check out the way they explain how a capitalist goes on to hire a manager given different legal system.

The main finding of the paper is:

The question addressed in the following sections is how to get more people to use the legal system? We believe that court and police reforms should not be the starting point, since those reforms are likely to take a long time. The legal system must begin to be used with the existing courts and police. To do so, legal reform should begin with the adoption of legal rules that the courts find usable, and that private parties find cheaper to rely on than other methods of resolving disputes. Such rules should have several obvious but important characteristics.

First, bad rules — that keep people from using the legal system because they prohibit, or fail to support — legitimate market activity, need to be abolished.

Second, the new rules should to the extent possible follow business practice, thereby enabling private parties to continue their business activities but to rely on courts rather than crime to resolve disputes.

Third, the new rules should help the courts resolve disputes by telling them what to do in the cases where existing laws are most conspicuously incomplete. In particular, courts, with their extremely limited resources, should be able to verify whether violations of these rules have occured.

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2 Responses to “Importance of legal system”

  1. Grant Hocking Says:

    Salut, super site vraiment merci pour ce billet super.

    j’aprecie également ce genre d’image, la position du manequin est originale, j’aime le style de l’artiste.

  2. finance director Says:

    fico credit score

    Importance of legal system | Mostly Economics

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