توسعه مالی و تحول حقوق مالکیت و نهادهای قانونی

Using a panel of 129 countries over the period from 1965 to 2008, we examine the role of financial development in the evolution of property rights and legal institutions. We postulate that changes in the level of financial development change the costs and benefits of, and the demand for property rights institutions. We predict, and find, a positive causal relationship between the level of financial development and the subsequent quality of property rights institutions, even after we control for country level heterogeneity and reverse causality. Furthermore, our analysis suggests that this relationship is especially strong in emerging market countries.

The literature on law and finance emphasizes the positive correlation between institutional development and financial development. The majority of the studies assert that the laws which protect property rights and promote the enforcement of financial contracts foster higher levels of financial development (La Porta et al., 1997 and La Porta et al., 1998; Levine, 1999; Levine et al., 2000; Acemoglu et al., 2002 and Acemoglu et al., 2005; Claessens and Laeven, 2003; Billmeier and Massa, 2009). In this paper we argue that the positive link between institutional development and financial development is due not only to the positive effects of institutions on financial development but also can be explained, at least in part, by the effect of exogenous changes in financial development on the quality of institutions. Financial development itself has a positive causal effect on the quality of property rights and legal institutions in a country.

In this paper we have examined the role of financial development in the evolution of property rights institutions. Our basic premise is that exogenous increases in the level of financial development increase the benefits of higher quality property rights institutions relative to the costs of setting up and maintaining these institutions, and would lead to the demand for these institutions. We predict that exogenous changes in the level of financial development would be positively related to subsequent changes in the quality of property rights institutions. In a panel of 129 countries over the 43 year period between 1965 and 2008, we find strong evidence to support this hypothesis. We document that the exogenous component of financial development is positively associated with the quality of property rights institutions. This finding is robust to alternative measures of financial development, reverse causality, country fixed-effects, and controls for other legal origins, historical, geographical and cultural determinants of institutional quality that have been identified in the literature. We also find some evidence that the positive relation between financial development and institutional development is somewhat stronger in the sample of emerging market countries.