Exiting a Lawless State

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...

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Main Authors:	Hoff, Karla, Stiglitz, Joseph E.
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ABUSE ABUSE OF POWER AGENCY PROBLEMS ANTICORRUPTION ANTICORRUPTION CAMPAIGNS ASSASSINATION ASSET STRIPPING ASSET VALUES ASSETS AUTHORITARIAN RULE AUTHORITARIANISM AUTHORITY BENEFICIARIES BRIBE BUSINESSMEN CAPITAL INFLOWS CITIZENS CLAIMANT COLLAPSE COLONIAL COUNTRIES COMMERCIAL LAW COMMON PROPERTY COMMUNISM COMMUNIST COMMUNIST PARTY COMPENSATION CONSTITUENCIES CONSTITUENCY CORPORATE GOVERNANCE CORPORATE GOVERNANCE MECHANISMS CORRUPTION COURT COURT DECISION CREDIT RATIONING CRIMINAL CRONIES DEMOCRACY DEMOCRATIC GOVERNANCE DEPENDENT DEVELOPMENT ECONOMICS DICTATORSHIP EAST EUROPEAN ECONOMIC GROWTH ECONOMIC HISTORIANS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS EFFICIENT OUTCOMES ELECTED OFFICIALS EMPLOYMENT ENTERPRISE RESTRUCTURING EXTERNALITIES FINANCIAL PROBLEMS FISCAL COSTS FREE MARKET GANGS GOVERNMENT POLICIES GOVERNMENT SPENDING HISTORIANS ILLEGITIMATE CHILDREN INCOME INEQUALITY INSTITUTIONAL DEVELOPMENT INSTITUTIONAL ENVIRONMENT INSTITUTIONAL FOUNDATIONS INSTITUTIONAL REFORM INTEREST RATE INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INVESTIGATION INVESTIGATORS JUSTICE LABOR ADJUSTMENT COSTS LAW ENFORCEMENT LAWS LEADERSHIP LEGAL REFORM LEGAL SYSTEM LEGALITY LEGITIMACY LOBBYING MARKET ECONOMY MEDIA MINISTER MONETARY POLICY MULTIPLE EQUILIBRIA NATIONAL POLICIES NATIONALIZATION OPPORTUNISTIC BEHAVIOR PAYOFF PAYOFFS POLITICAL CONSENSUS POLITICAL CORRUPTION POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL RISKS POLITICIANS POSSESSION PRINCIPAL ASSETS PRIVATE OWNERSHIP PRIVATIZATION PROPERTY RIGHTS PROSECUTION PROTECTION OF PROPERTY PUBLIC OFFICIALS PUBLIC SECTOR PUBLIC SPENDING RECAPTURE OF ASSETS RENTS REVOLUTION RULE OF LAW SECURITIES LAW SOCIAL COST SOCIAL WELFARE STATE ASSETS STATE ENTERPRISES STATE INSTITUTIONS STATE OWNERSHIP STATE POWER THEFT TIGHT MONETARY POLICY TRANSITION ECONOMIES TRANSITION ECONOMY VICTIMS VOTING WILL WORLD POLITICS
Online Access:	http://documents.worldbank.org/curated/en/2008/02/9048193/exiting-lawless-state http://hdl.handle.net/10986/6589

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recordtype	oai_dc
spelling	okr-10986-65892021-04-23T14:02:31Z Exiting a Lawless State Hoff, Karla Stiglitz, Joseph E. ABUSE ABUSE OF POWER AGENCY PROBLEMS ANTICORRUPTION ANTICORRUPTION CAMPAIGNS ASSASSINATION ASSET STRIPPING ASSET VALUES ASSETS AUTHORITARIAN RULE AUTHORITARIANISM AUTHORITY BENEFICIARIES BRIBE BUSINESSMEN CAPITAL INFLOWS CITIZENS CLAIMANT COLLAPSE COLONIAL COUNTRIES COMMERCIAL LAW COMMON PROPERTY COMMUNISM COMMUNIST COMMUNIST PARTY COMPENSATION CONSTITUENCIES CONSTITUENCY CORPORATE GOVERNANCE CORPORATE GOVERNANCE MECHANISMS CORRUPTION COURT COURT DECISION CREDIT RATIONING CRIMINAL CRONIES DEMOCRACY DEMOCRATIC GOVERNANCE DEPENDENT DEVELOPMENT ECONOMICS DICTATORSHIP EAST EUROPEAN ECONOMIC GROWTH ECONOMIC HISTORIANS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS EFFICIENT OUTCOMES ELECTED OFFICIALS EMPLOYMENT ENTERPRISE RESTRUCTURING EXTERNALITIES FINANCIAL PROBLEMS FISCAL COSTS FREE MARKET GANGS GOVERNMENT POLICIES GOVERNMENT SPENDING HISTORIANS ILLEGITIMATE CHILDREN INCOME INEQUALITY INSTITUTIONAL DEVELOPMENT INSTITUTIONAL ENVIRONMENT INSTITUTIONAL FOUNDATIONS INSTITUTIONAL REFORM INTEREST RATE INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INVESTIGATION INVESTIGATORS JUSTICE LABOR ADJUSTMENT COSTS LAW ENFORCEMENT LAWS LEADERSHIP LEGAL REFORM LEGAL SYSTEM LEGALITY LEGITIMACY LOBBYING MARKET ECONOMY MEDIA MINISTER MONETARY POLICY MULTIPLE EQUILIBRIA NATIONAL POLICIES NATIONALIZATION OPPORTUNISTIC BEHAVIOR PAYOFF PAYOFFS POLITICAL CONSENSUS POLITICAL CORRUPTION POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL RISKS POLITICIANS POSSESSION PRINCIPAL ASSETS PRIVATE OWNERSHIP PRIVATIZATION PROPERTY RIGHTS PROSECUTION PROTECTION OF PROPERTY PUBLIC OFFICIALS PUBLIC SECTOR PUBLIC SPENDING RECAPTURE OF ASSETS RENTS REVOLUTION RULE OF LAW SECURITIES LAW SOCIAL COST SOCIAL WELFARE STATE ASSETS STATE ENTERPRISES STATE INSTITUTIONS STATE OWNERSHIP STATE POWER THEFT TIGHT MONETARY POLICY TRANSITION ECONOMIES TRANSITION ECONOMY VICTIMS VOTING WILL WORLD POLITICS 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. 2012-05-29T18:50:36Z 2012-05-29T18:50:36Z 2008-02 http://documents.worldbank.org/curated/en/2008/02/9048193/exiting-lawless-state http://hdl.handle.net/10986/6589 English Policy Research Working Paper; No. 4520 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ABUSE ABUSE OF POWER AGENCY PROBLEMS ANTICORRUPTION ANTICORRUPTION CAMPAIGNS ASSASSINATION ASSET STRIPPING ASSET VALUES ASSETS AUTHORITARIAN RULE AUTHORITARIANISM AUTHORITY BENEFICIARIES BRIBE BUSINESSMEN CAPITAL INFLOWS CITIZENS CLAIMANT COLLAPSE COLONIAL COUNTRIES COMMERCIAL LAW COMMON PROPERTY COMMUNISM COMMUNIST COMMUNIST PARTY COMPENSATION CONSTITUENCIES CONSTITUENCY CORPORATE GOVERNANCE CORPORATE GOVERNANCE MECHANISMS CORRUPTION COURT COURT DECISION CREDIT RATIONING CRIMINAL CRONIES DEMOCRACY DEMOCRATIC GOVERNANCE DEPENDENT DEVELOPMENT ECONOMICS DICTATORSHIP EAST EUROPEAN ECONOMIC GROWTH ECONOMIC HISTORIANS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS EFFICIENT OUTCOMES ELECTED OFFICIALS EMPLOYMENT ENTERPRISE RESTRUCTURING EXTERNALITIES FINANCIAL PROBLEMS FISCAL COSTS FREE MARKET GANGS GOVERNMENT POLICIES GOVERNMENT SPENDING HISTORIANS ILLEGITIMATE CHILDREN INCOME INEQUALITY INSTITUTIONAL DEVELOPMENT INSTITUTIONAL ENVIRONMENT INSTITUTIONAL FOUNDATIONS INSTITUTIONAL REFORM INTEREST RATE INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INVESTIGATION INVESTIGATORS JUSTICE LABOR ADJUSTMENT COSTS LAW ENFORCEMENT LAWS LEADERSHIP LEGAL REFORM LEGAL SYSTEM LEGALITY LEGITIMACY LOBBYING MARKET ECONOMY MEDIA MINISTER MONETARY POLICY MULTIPLE EQUILIBRIA NATIONAL POLICIES NATIONALIZATION OPPORTUNISTIC BEHAVIOR PAYOFF PAYOFFS POLITICAL CONSENSUS POLITICAL CORRUPTION POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL RISKS POLITICIANS POSSESSION PRINCIPAL ASSETS PRIVATE OWNERSHIP PRIVATIZATION PROPERTY RIGHTS PROSECUTION PROTECTION OF PROPERTY PUBLIC OFFICIALS PUBLIC SECTOR PUBLIC SPENDING RECAPTURE OF ASSETS RENTS REVOLUTION RULE OF LAW SECURITIES LAW SOCIAL COST SOCIAL WELFARE STATE ASSETS STATE ENTERPRISES STATE INSTITUTIONS STATE OWNERSHIP STATE POWER THEFT TIGHT MONETARY POLICY TRANSITION ECONOMIES TRANSITION ECONOMY VICTIMS VOTING WILL WORLD POLITICS
spellingShingle	ABUSE ABUSE OF POWER AGENCY PROBLEMS ANTICORRUPTION ANTICORRUPTION CAMPAIGNS ASSASSINATION ASSET STRIPPING ASSET VALUES ASSETS AUTHORITARIAN RULE AUTHORITARIANISM AUTHORITY BENEFICIARIES BRIBE BUSINESSMEN CAPITAL INFLOWS CITIZENS CLAIMANT COLLAPSE COLONIAL COUNTRIES COMMERCIAL LAW COMMON PROPERTY COMMUNISM COMMUNIST COMMUNIST PARTY COMPENSATION CONSTITUENCIES CONSTITUENCY CORPORATE GOVERNANCE CORPORATE GOVERNANCE MECHANISMS CORRUPTION COURT COURT DECISION CREDIT RATIONING CRIMINAL CRONIES DEMOCRACY DEMOCRATIC GOVERNANCE DEPENDENT DEVELOPMENT ECONOMICS DICTATORSHIP EAST EUROPEAN ECONOMIC GROWTH ECONOMIC HISTORIANS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS EFFICIENT OUTCOMES ELECTED OFFICIALS EMPLOYMENT ENTERPRISE RESTRUCTURING EXTERNALITIES FINANCIAL PROBLEMS FISCAL COSTS FREE MARKET GANGS GOVERNMENT POLICIES GOVERNMENT SPENDING HISTORIANS ILLEGITIMATE CHILDREN INCOME INEQUALITY INSTITUTIONAL DEVELOPMENT INSTITUTIONAL ENVIRONMENT INSTITUTIONAL FOUNDATIONS INSTITUTIONAL REFORM INTEREST RATE INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INVESTIGATION INVESTIGATORS JUSTICE LABOR ADJUSTMENT COSTS LAW ENFORCEMENT LAWS LEADERSHIP LEGAL REFORM LEGAL SYSTEM LEGALITY LEGITIMACY LOBBYING MARKET ECONOMY MEDIA MINISTER MONETARY POLICY MULTIPLE EQUILIBRIA NATIONAL POLICIES NATIONALIZATION OPPORTUNISTIC BEHAVIOR PAYOFF PAYOFFS POLITICAL CONSENSUS POLITICAL CORRUPTION POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL RISKS POLITICIANS POSSESSION PRINCIPAL ASSETS PRIVATE OWNERSHIP PRIVATIZATION PROPERTY RIGHTS PROSECUTION PROTECTION OF PROPERTY PUBLIC OFFICIALS PUBLIC SECTOR PUBLIC SPENDING RECAPTURE OF ASSETS RENTS REVOLUTION RULE OF LAW SECURITIES LAW SOCIAL COST SOCIAL WELFARE STATE ASSETS STATE ENTERPRISES STATE INSTITUTIONS STATE OWNERSHIP STATE POWER THEFT TIGHT MONETARY POLICY TRANSITION ECONOMIES TRANSITION ECONOMY VICTIMS VOTING WILL WORLD POLITICS Hoff, Karla Stiglitz, Joseph E. Exiting a Lawless State
relation	Policy Research Working Paper; No. 4520
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Hoff, Karla Stiglitz, Joseph E.
author_facet	Hoff, Karla Stiglitz, Joseph E.
author_sort	Hoff, Karla
title	Exiting a Lawless State
title_short	Exiting a Lawless State
title_full	Exiting a Lawless State
title_fullStr	Exiting a Lawless State
title_full_unstemmed	Exiting a Lawless State
title_sort	exiting a lawless state
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2008/02/9048193/exiting-lawless-state http://hdl.handle.net/10986/6589
_version_	1764400571467431936

Exiting a Lawless State

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