The Prevailing View: Impact, Assumptions, and Problems

in Law and Capitalism

Published by University of Chicago Press

Published in print June 2008 | ISBN: 9780226525273
Published online March 2013 | e-ISBN: 9780226525297 | DOI:
The Prevailing View: Impact, Assumptions, and Problems

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A very simple view of the relation between law and markets has taken hold in the minds of many smart people—people whose research and policy advice carry tremendous weight. That simple view, not a deeply nuanced perspective that would follow from a careful reading of the entire body of literature, is repeated in important academic journals and the pages of World Bank publications and animates legal reforms undertaken in many countries in the recent past. A rule of law to protect property rights and enforce contracts is an essential precondition to economic development because without it, transaction costs will be prohibitive in many cases. This chapter traces the intellectual history of the endowment perspective by Max Weber and examines its implications.

Keywords: law; markets; legal reforms; property rights; contracts; transaction costs; endowment perspective; Max Weber; capitalism

Chapter.  3460 words. 

Subjects: Company and Commercial Law

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