| dc.description.abstract | There is a large and growing interest in the prevailing cross-country differences many
well-functioning institutions, such as judicial independence and high quality laws, and
desirable social outcomes, such as a low degree of corruption and high economic
growth. Influential scholars have claimed that these cross-country differences to a
large extent are explained by a country’s legal origin (the common law and civil law
tradition). It is claimed that through mechanisms of a stronger legal protection of
outside investors and less state intervention, common law countries have developed
more prosperous economically and socially. This paper proposes an alternative
interpretation of the cross-country differences observed. Building on scholarly studies
of state formation processes, the basic proposition of this paper is that state formation
decisively affects the character of the state infrastructure to be either patrimonial or
bureaucratic, which in turn affects institutions and social outcomes. This argument is
tested empirically on a set of 31 OECD countries. It is shown that the state
infrastructure is indeed more influential than the legal traditions on a set of
institutional variables (formalism, judicial independence, regulation of entry and case
law) as well as on a set of social outcomes (corruption, rule of law, and property
rights). | sv |
