Endogenous Constitutions: Politics and Politicians Matter, Economic Outcomes Don’t

We study changes in the form of government as an example of endogenously determined constitutions. For a sample of 202 countries over the period 1950–2006, we find that most changes are relatively small and roughly equally likely to be either in the direction of more parliamentarian or more presidential systems. Based on a fixed effects ordered logit panel data model estimated over the period 1951–2000 for 146 countries, we find that such changes in the constitution can be explained by characteristics of the political system, internal and external political conflicts, and political leaders, whereas economic and socio-demographic variables do not matter.Constitutional change, form of government, endogenous constitutions, separation of powers, relevance of leaders

The Relevance of Judicial Procedure for Economic Growth

It has been argued that procedural formalism undermines economic efficiency by fostering rent-seeking and corruption. We challenge this view by arguing that a number of judicial procedures foster economic growth by increasing the predict-ability of court decisions, which leads to more transactions and higher investment levels. We investigate the effects on economic growth of 15 judicial procedures. Employing a standard growth model, we find in a cross-section of 67 countries that timeliness, written—as opposed to oral—procedures, and the right to counsel have a positive effect on growth, whereas the number of independent procedural actions as well as the presumption of innocence have negative effects. Our results partially contradict the results of former studies based on the Lex Mundi dataset.Judicial procedure, legal formalism, judicial Independence, rule of law, investment, growth.

Mapping Constitutionally Safeguarded Judicial Independence—A Global Survey

De jure judicial independence (JI) is the single most important predictor of de facto JI. In this paper, we describe under what conditions countries are likely to include JI in their constitutions. We describe and analyze both their original choice in this regard as well as change over time using a newly constructed dataset comprised of 100 countries and covering the years between 1950 and 2005. Three results stand out. First, legal origins do have an impact on the likelihood of explicitly anchoring JI in the constitution: countries belonging to the common law tradition are less likely to implement JI in their constitutions (and those with a socialist tradition are more likely to do so). Correspondingly, former British colonies are less likely to address JI explicitly as are states in the Caribbean. Second, religion has a significant impact on whether JI is included in the constitution: societies experiencing a high level of religious fractionalization are not only less likely to anchor JI in their constitutions, but are also less likely to change their constitutions in that direction later on. Finally, Muslim countries are more likely to include mention of JI, whereas Protestant countries are less likely to do so. Third, the distribution of resources within societies has important—and largely unexpected—effects: a higher percentage of family farms, a wider distribution of education, and a higher percentage of urban dwellers are all connected with a lower likelihood of JI being mentioned in the constitution.Judicial Independence, Constitutional Choice, Constitutional ChangeJudicial Independence, Constitutional Choice, Constitutional Change

Inflation, Central Bank Independence and the Legal System.

We argue that a higher degree of de facto independence of the legal system from the other government branches as well as public trust in the legal system may reduce the average inflation record of countries through a direct and an indirect channel. The direct channel works by affecting potential output, while the indirect channel helps to increase the de facto independence of the central bank. In the empirical section of the paper, we present evidence in favor of both channels in a sample containing both industrial and Third World countries. A model that contains legal trust in addition to de jure central bank independence, checks and balances within government, and openness can explain 60% of the variation in the logarithm of the inflation rate.Judicial Independence; Legal Trust; Central Bank Independence; Inflation

Explaining de facto judicial independence

Judicial Independence (JI) as factually implemented varies considerably between countries. Since de iure JI is an imperfect predictor of de facto JI, a number of variables that might determine the factual level of judicial independence is theoretically discussed and empirically tested. A distinction between factors that can be influenced in the short run and those that are the result of historical development and are exempt from short-term modification is made. Ascertaining the relative relevance of these two groups of variables promises to be policy-relevant because attempts to make judiciaries more independent within governance programs might be seriously constrained by factors beyond the control of national governments and international organizations.Judicial independence, informal institutions, formal institutions

Determinants of Constitutional Change: Why do Countries Change their Form of Governments?

A country’s form of government has important economic and political consequences, but the determinants that lead countries to choose either parliamentary or presidential systems are largely unexplored. This paper studies this choice by analyzing the factors that make countries switch from parliamentary to presidential systems (or vice versa). The analysis proceeds in two steps. First, we identify the survival probability of the existing form of government (drawing on a proportional hazard model). In our model, which is based on 169 countries, we find that geographical factors and former colonial status are important determinants of survival probability. Also, presidential systems are, ceteris paribus, more likely to survive than parliamentary ones. Second, given that a change has taken place, we identify the underlying reasons based on panel data logit models. We find that domestic political factors are more important than economic ones. The most important factors relate to intermediate internal armed conflict, sectarian political participation, degree of democratization, and party competition, as well as the extent to which knowledge resources are distributed among the members of society.constitutional change, institutional dynamics, form of government, endogenous constitutions, separation of powers

Explaining de facto judicial independence.

De facto judicial Independence (JI) seems to be highly and robustly significant for economic growth. But JI as formally written down in legal texts is a imperfect predictor for de facto JI. This paper thus tries to identify the variables, which determine de facto JI.. A distinction between factors that can be influenced in the short run and those that are the result of historical development and that are exempt from short-term modification is made. Ascertaining the relative relevance of these two groups of variables promises to be policy-relevant because attempts to make judiciaries more independent within governance programs might be seriously constrained by factors beyond the control of national governments and international organizations.Judicial independence; informal institutions; formal institutions

Explaining de facto Judicial Independence

A high degree of de facto judicial Independence (JI) functions as a crucial precondition of governments to credibly commit to legislative decisions, such as respecting private property rights. Thus, de facto JI should improve the allocative efficiency and may therefore contribute positively to economic growth. But JI as formally written down in legal texts is an imperfect predictor for de facto JI. This paper tries to identify the forces which determine de facto JI. A distinction between factors that can be influenced in the short run and those that are the result of historical development and that are exempt from short-term modification is made. Ascertaining the relative relevance of these two groups of variables promises to be policy-relevant. A rigorous empirical model reduction process is used in order to cope with the potential excess of explanatory variables. The explanatory variables for de facto JI that survive the reduction process are de jure JI, legal confidence of the public, extent of democratization, degree of press freedom, and the religious beliefs of the population.Judicial independence, informal institutions, formal institutions

Explaining constitutional change: The case of judicial independence

This paper studies the factors driving changes in judicial independence (JI) as incorporated in constitutions. Two indicators of constitutionally safeguarded JI are constructed. Variations in these indicators are identified based on changes in the constitutions of as many as 100 countries that occurred between 1950 and 2005. Four groups of factors are conjectured to be relevant for explaining these changes. We find only weak evidence for the insurance theory of judicial independence but strong evidence that the characteristics of individual leaders - such as how they acquired or lost power - play an important role in explaining changes in constitutionally safeguarded JI. This paper contributes not only to the literature on JI but also to the theory of endogenous constitutions