Law, Informal Rules and Economic Performance: The Case for Common Law

Capitalism has outperformed all other systems and maintained a positive growth rate since it began. Svetozar Pejovich makes the case within this book that a major reason for the success of capitalism lies in the efficiency-friendly incentives of its basic institutions, which continuously adjust the rules of the game to the requirements of economic progress. The analysis throughout is consistent and is supported by evidence. Key components of the proposed theory are the rule of law, the market for institutions, the interaction thesis, the carriers of change, and the process of changing formal and informal institutions.This book will be of great interest to academics and students of law and economics, new institutional economics, comparative systems and public choice throughout the world and especially in East Asia and South America where institutional issues are being debated.

Table of Contents:
Contents: Foreword by Leonard P. Liggio Preface and Acknowledgments PART I: BASIC ECONOMIC CONCEPTS 1. The Game and the Rules of the Game 2. Transaction Costs PART II: TRANSFORMATION OF THE MEDIEVAL COMMUNITY INTO MODERN SOCIETY: THE RISE OF CLASSICAL LIBERALISM, THE RULE OF LAW AND CAPITALISM 3. From the Middle Ages to Capitalism 4. Capitalism and the Rule of Law Appendix: Afraid to be Free: Dependency as Desideraturm James M. Buchanan 5. The Law of Contract and the Judiciary 6. The Economic Functions of the Constitution 7. Private Property Rights 8. Capitalism, Economic Freedom and Performance 9. The Rule of Law and Capitalism: An Overview PART III: TOWARD A THEORY OF INSTITUTIONAL CHANGE 10. The Method of Analysis 11. The Interaction Thesis 12. The Carriers of Change: The Role of Entrepreneurs 13. Formal Institutions 14. Informal Institutions or Cultural Traditions: The Role of Pathfinders 15. Efficiency-Friendly Institutional Change within the Structure of Tradition Index

About the Author :
Svetozar Pejovich, Professor Emeritus, Texas A&M University, US, Honorary Doctorate, University of Belgrade, Serbia and Professor of Law and Economics, University of Donja Gorica, Montenegro; with contributions from Enrico Colombatto, Professor of Economics, School of Economics, University of Turin, Italy

Review :
'Almost everyone will gain something of value from reading this book. For those who work in the new institutional economics, Pejovich provides a thoughtful treatment of how common-law and civil-law systems affect personal freedoms and rule of law. The book's larger market, however, will comprise educated lay readers, who will gain a deeper appreciation of the foundations of capitalism in the developed world and of the dynamics of interrelated institutional and economic change.' '. . . a well written, easily read book which casts light on many aspects of law and on questions which are or should be debated in our law schools. . . well laid out and presented. . . Its subject matter makes it essential reading for all those studying comparative law and of course law and economics and even for those studying legislation. It would be more than useful for those engaged in property law, the law of contract and administrative and public law. In other words it would be useful and challenging reading for just about all law teachers and students as well as practitioners who wish to think about the basics of what they are doing. Its easy combination of history, comparative technique, legal fundamentals and economics with no maths would even make it an excellent reader for LAWS 101.' 'Professor Pejovich has written an impressive lot on comparative economic systems, institutions, policies and broader social aspects of economic development. . . His long work in the field quite predictably made him able to present his views and findings in an ever clearer, more orderly and more profoundly argued way. . . This is one of the rare books in which the author is well aware of what he is talking about and makes sure that the same goes for his readers.' 'Professor Pejovich has ranged expertly across such seemingly disparate areas as legal systems, culture, economics and public choice theory to give us a thoroughly convincing roadmap for a nation's economic success. The rule of law, enforcement of private contracts, private property rights and an independent judiciary are the basic building blocks. But the common law system, as compared to the civil law system emanating from the European continent, also gets a lot of the credit. This is an erudite, yet happily readable work that takes a lot of the mystery out of differential economic performance among nations.'