Exiting A Lawless State [electronic resource] / Hoff, Karla
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TextPublication details: Washington, D.C., The World Bank, 2008Description: 1 online resource (38 p.)Subject(s): Assets | Bankruptcy and Resolution of Financial Distress | Corruption | Democracy | Finance and Financial Sector Development | Gender | Gender and Law | Governance | Labor Policies | Law and Development | Laws | Lobbying | Minister | National Governance | Politicians | Privatization | Public Sector Corruption and Anticorruption Measures | Rule of law | Social Protections and Labor | TheftAdditional physical formats: Hoff, Karla.: Exiting A Lawless State.Online resources: Click here to access online Abstract: An earlier paper showed that an economy could be trapped in an equilibrium state in which the absence of the rule of law led to asset-stripping, and the prevalence of asset-stripping led to the absence of a demand for the rule of law, highlighting a coordination failure. This paper looks more carefully at the dynamics of transition from a non-rule-of-law state. The paper identifies a commitment problem as the critical feature inhibiting the transition: the inability, under a rule of law, to forgive theft. This can lead to the perpetuation of the non-rule-of-law state, even when it might seem that the alternative is Pareto-improving.
An earlier paper showed that an economy could be trapped in an equilibrium state in which the absence of the rule of law led to asset-stripping, and the prevalence of asset-stripping led to the absence of a demand for the rule of law, highlighting a coordination failure. This paper looks more carefully at the dynamics of transition from a non-rule-of-law state. The paper identifies a commitment problem as the critical feature inhibiting the transition: the inability, under a rule of law, to forgive theft. This can lead to the perpetuation of the non-rule-of-law state, even when it might seem that the alternative is Pareto-improving.
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