Essays in Comparative Institutional Economics

This dissertation examines how decentralized institutional structures and organizational forms evolve and affect economic development under different politico-economic and legal arrangements. Organized legal professions are typically viewed by economists as rent-seeking interest groups - even though they have been central in institutional development in countries with the highest quality institutions. Chapter 1 develops a model that identifies the link between the role of organized legal professions and the quality of reform. Delaying institutional reform through deliberation, the profession's participation discounts the expected benefit from welfare-inferior reform proposal for rent-seeking interest groups. Professional review serves as a screening mechanism ameliorating the self-interested government's adverse selection problem. The model's predictions cast new light on the Glorious and the French revolutions, post-communist transition, why and when civil law and common law systems differ, and why post-independence institutions are of higher quality in settler than in extractive colonies. Although common, self-regulation as an alternative to direct government regulation has been little investigated. Chapter 2 uses a framework inspired by property rights theory to address the allocation of regulatory authority. In a model of a regulatory process with bargaining, the authority to amend the enabling legislation can be either consolidated within the government, or extended to the producers in a self-regulatory regime. The chapter delineates the welfare implications of regulatory regime choice, and indicates whether the government's incentives to delegate or centralize regulatory authority lead to efficient institutional design. The model identifies those features of legal traditions that help to explain variation in regulatory arrangements across countries, illuminates the contrast in regulatory practice between the progressive era and the associational regime of the New Deal, and characterizes the mechanisms of intervention used in fascist economies. Chapter 3 discusses the channels through which civil society is expected to affect economic development. Utilizing the formal analysis laid out in Chapter 1, the chapter provides an introductory examination of the rationale for civil society aid and concludes with a conjectural interpretation of the determinants of the aid's effectiveness to bring about successful institutional change in post-communist countries

Essays on the Historical and Current Institutional Development of South East and Central European States

This dissertation examines the institutional determinants of one set of countries - the former socialist states in South East and Central Europe. It is motivated by the observation that fifteen years after the beginning of transition we see a divergence in the institutional performance of the transition countries. The Balkan (South East European states) have been consistently lagging behind the Central European states. Why is there such a substantial difference in the performance and level of institutions in these two sets of former socialist countries? Unlike the sparse existing literature, which attempt to answer this question, this dissertation identifies the Ottoman and Habsburg historical legacies, rather than the socialist legacy, as a key source of divergence in institutional performance of the countries of South East and Central Europe. In Chapter 1, we identify the legacies of the Ottoman Empire and their historical origins. The chapter's main contribution is twofold. First, it identifies and discusses the origins of characteristics of the Ottoman Empire that shaped the institutional structure of its successor states. Second, the chapter analyzes the impact of these characteristics on people's behavior and incentives. Building upon the key historical dynamics identified in Chapter 1, Chapter 2 develops a stylized theoretical model of the Ottoman Empire. The model attempts to explain the rise and decline of the Empire and indirectly, the historical evolution of the Ottoman legacy. It, thereby, contributed to the literature by looking at how the Ottoman seemingly irrational and static structure could have been optimal subject to certain constraints. Chapter 3 attempts to explain the reasons for the 'great divide' in performance of the countries of South East and Central European post-socialist states. By comparing the historical developments and legacies of the Ottoman Empire with those of the Habsburg Empire, Chapter 3 draws a number of hypotheses about the effect of these legacies on current institutional performance. It presents three estimation procedures that allow us to test the hypotheses and discusses the estimation results in light of alternative theories

The Olympics, transnational law and legal transplants: the International Olympic Committee, ambush marketing and ticket touting

This paper concerns the origination, development and emergence of what might be termed ‘Olympic law’. This has an impact across borders and with transnational effect. It examines the unique process of creation of these laws, laws created by a national legislature to satisfy the commercial demands of a private body, the International Olympic Committee (IOC). It begins by critically locating the IOC and Olympic law and examining Olympic law as a transnational force. Using two case studies, those of ambush marketing and ticket touting, it demonstrates how private entities can be the drivers of specific, self-interested legislation when operating as a transnational organisation from within the global administrative space and notes the potential dangers of such legal transplants

Political trust and historical legacy: the effect of varieties of socialism

This paper, unlike the vast existing literature on political trust, focuses on trust in post-socialist countries, and more specifically on their emerging elites, rather than on their general populations. Studying emerging elites is important in the context of establishing democracy and the survival of democracy. We stipulate that political trust is significantly determined by historical legacy: type of socialist regime, accounting for path dependence and thus, for pre- socialist legacies. Utilizing individual-level data from an institutional survey, we find that distinguishing between different types of socialism is instrumental in explaining trust of emerging elites. Our findings have implications for policies aimed at fostering political trust in post-socialist countries and more importantly for discerning future patterns of political and social developments