Judicial Checks and Balances

Porta, Rafael La; López-de-Silanes, Florencio; Pop-Eleches, Cristian; Shleifer, Andrei

doi:10.3386/w9775

Cited by 119 publications

(171 citation statements)

References 10 publications

Supporting

Mentioning

165

Contrasting

Unclassified

Order By: Relevance

“…Acemoglu et al (2001b; 2001a) suggested population density in 1500 and the type of colonial origin (indicated by settler mortality) as effective instruments, respectively. La Porta et al (2004) presented yet another ”horse race” of theories, in their case juxtaposing judicial independence and constitutional review. In RST the ”horse race” is between three possible determinants: Institutions, Integration, and Geography.…”

Section: Discussionmentioning

confidence: 99%

Two-Stage Bayesian Model Averaging in Endogenous Variable Models

Lenkoski

Eicher

Raftery

2013

Econometric Reviews

View full text Add to dashboard Cite

Economic modeling in the presence of endogeneity is subject to model uncertainty at both the instrument and covariate level. We propose a Two-Stage Bayesian Model Averaging (2SBMA) methodology that extends the Two-Stage Least Squares (2SLS) estimator. By constructing a Two-Stage Unit Information Prior in the endogenous variable model, we are able to efficiently combine established methods for addressing model uncertainty in regression models with the classic technique of 2SLS. To assess the validity of instruments in the 2SBMA context, we develop Bayesian tests of the identification restriction that are based on model averaged posterior predictive p-values. A simulation study showed that 2SBMA has the ability to recover structure in both the instrument and covariate set, and substantially improves the sharpness of resulting coefficient estimates in comparison to 2SLS using the full specification in an automatic fashion. Due to the increased parsimony of the 2SBMA estimate, the Bayesian Sargan test had a power of 50 percent in detecting a violation of the exogeneity assumption, while the method based on 2SLS using the full specification had negligible power. We apply our approach to the problem of development accounting, and find support not only for institutions, but also for geography and integration as development determinants, once both model uncertainty and endogeneity have been jointly addressed.

show abstract

Section: Discussionmentioning

confidence: 99%

Two-Stage Bayesian Model Averaging in Endogenous Variable Models

Lenkoski

Eicher

Raftery

2013

Econometric Reviews

View full text Add to dashboard Cite

show abstract

“…For example, La Porta et al (1997Porta et al ( , 1998 examines how the degree of legal protection of investors is related to legal tradition, quality of law enforcement and adaptation by firms. In their subsequent work, LLSV has expanded the scope of their research to cover broader issues such as the quality of government (La Porta et al, 1999) and judicial check and balances on legislature and executive (La Porta et al, 2004).…”

Section: (B) New Comparative Economicsmentioning

confidence: 99%

An Institutional Perspective of National Competitiveness

Lee

2010

Singapore Econ. Rev.

View full text Add to dashboard Cite

The literature on the role of institutions in economic growth and development is well-established. In contrast, the relationship between institutional quality and competitiveness, while important, received much less attention until recently, when there has been a growing interest in incorporating variables representing institutional quality into country competitiveness indices. Such attempts take cognizance of the results from cross-country empirical findings. However, any attempt to construct a satisfactory mapping of institutions to competitiveness is fraught with difficulties, including data consistencies, omission of causal factors and the lack of theoretical foundations. Some of these difficulties stem from differences in the overall objectives of the research literature and the development of competitiveness indices. The research literature can explain why, whether and what type of institutions are important, but such findings do not lend themselves to the construction of appropriate policy variables.

show abstract

“…North () argued that the independence of the justice department will impel the government to make a credible commitment to the protection of private property and freedom of contract. Using a sample of 71 countries, La Porta et al () empirically proved that judicial independence can heighten a country's economic and political freedom, including the protection of people's property rights against infringement by the government.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…On the other hand, researchers have continued to face measurement obstacles in studying judicial independence, as it is not directly observable. In recent years, scholars have constructed a number of indicators to measure judicial independence, especially at the country‐level (Feld and Voigt ; La Porta et al ; Linzer and Staton ); however, the validity of judicial independence scores has also been a concern. Riosfigueroa and Staton () evaluated the validity of 13 cross‐national measurements of judicial independence and found little evidence of the direct and strong relationship between constitutional rules and independent judicial behavior claimed by scholars.…”

Section: Introductionmentioning

confidence: 99%

Judicial Independence and Cash Flow: Evidence from a Natural Experiment in China

Qian

2018

Int Rev Finance

View full text Add to dashboard Cite

This paper supplements studies on the economic consequences of judicial independence from the perspective of cash flow. It explores the rotation of local judges as an exogenous shock that increases local judicial independence in China and analyses the impact of rotation on provincial cash inflow using data from China's high‐value payment system. The difference‐in‐difference estimates indicate that the rotation of the judges can attract more outside cash inflow, including amount and average size. This effect persists even after controlling for the endogeneity concern and the effect of disaster. The results of the dynamic effects show that the impact of the rotation of the judges on cash inflow mostly originates in the second and third years after the rotation. We further find that judicial independence can promote more foreign direct investment, venture capital's investment, and bank loans and clarify the impacting mechanisms of judicial independence on cash inflow.

show abstract

Judicial Checks and Balances

Cited by 119 publications

References 10 publications

Two-Stage Bayesian Model Averaging in Endogenous Variable Models

Two-Stage Bayesian Model Averaging in Endogenous Variable Models

An Institutional Perspective of National Competitiveness

Judicial Independence and Cash Flow: Evidence from a Natural Experiment in China

Contact Info

Product

Resources

About