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What firms know
Economics Letters 107 (2010) 273–275
Contents lists available at ScienceDirect
Economics Letters j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e c o l e t
What firms know Mohammad Amin ⁎ Enterprise Analysis Unit, World Bank, Washington, DC 20433, USA
a r t i c l e
i n f o
Article history: Received 9 June 2008 Received in revised form 20 January 2010 Accepted 24 February 2010 Available online 1 March 2010
a b s t r a c t The present paper contributes to the literature on legal origins by showing that the ease with which information on rules and regulations is available to firms is much better in common law compared with civil law countries. © 2010 Elsevier B.V. All rights reserved.
JEL Classification: H1 K4 P11 P51 Keywords: Legal origin Information Regulation
1. Introduction A large literature documents poorer quality of institutions in civil law compared with common law countries. Examples include entry regulation (Djankov et al., 2002), contract enforcement (Djankov et al., 2003) and labor laws (Botero et al., 2004). The present paper contributes to this literature by showing that another dimension of institutional development, the ease with which information on rules and regulations is available to firms (information availability), follows a similar pattern. That is, information availability is better in common law compared with civil law countries. One reason for this could be that governments in common law countries tend to interfere less with the functioning of the economy, which implies a less complex web of rules and regulations, and hence less burden on firms in obtaining all the information. Another possibility is that civil law countries have a more centralized system of law-making where legislators draft laws “without gaps” (La Porta et al., 2008). The more detailed codification of laws is likely to aggravate information requirements. 2. Data and main variables Our main data source is a firm level survey conducted by the World Bank in 1999–2000 (World Business Environment Survey, WBES 1999). The WBES data are a nationally representative stratified
⁎ Corresponding author. Tel.: +1 202 473 1915. E-mail address: [email protected]. 0165-1765/$ – see front matter © 2010 Elsevier B.V. All rights reserved. doi:10.1016/j.econlet.2010.02.005
random sample of firms with a common questionnaire and sampling methodology for all participating countries. One concern with the WBES could be that it is almost a decade old. In Section 4, we provide additional evidence supporting our main results using a more recent proxy measure of information availability. The main dependent variable, Information, equals the response of firms to the following statement in the WBES: “In general, information on the laws and regulations affecting my firm is easy to obtain.” Response was recorded on a 1–6 scale: fully disagree (1), disagree in most cases (2), tend to disagree (3), tend to agree (4), agree in most cases (5), and fully agree (6). The mean value of Information equals 4.1 and the standard deviation is 1.41. Percentages of firms reporting lowest to highest value of Information equal 5.5%, 9.5%, 14%, 25%, 29% and 17%, respectively.1 Our main explanatory variable, English, is a dummy equal to 1 if a country's legal structure is based on the English common law (20 countries) and 0 otherwise (French civil law, 30 countries). Data source for the variable is La Porta et al. (1999). Following the literature, we control for a number of variables to address the omitted variable bias problem. Values of these control variables are for the year 2000 or the closest (to 2000) year available. These variables include (data sources other than WBES in brackets) a dummy variable, PR, which is equal to 1
1 We note that the dependent variable is a subjective measure and could vary across firms depending on their personal experiences and how they interpret “tend to agree”, “fully agree”, etc. While this requires some caution in interpreting our results, we do not have any reason to believe that the stated subjectivity is systematically correlated with the legal tradition of countries.
274
M. Amin / Economics Letters 107 (2010) 273–275
if the electoral rule for the lower house is a form of proportional representation and 0 otherwise (Beck et al., 2001), a dummy variable equal to 1 if the executive head is directly elected and 0 otherwise (Beck et al., 2001), log of GDP per capita, PPP adjusted, and in constant 2000 USD (World Development Indicators, World Bank), and two dummy variables which indicate whether the firm is small (Small, less than 50 employees) or large (Large, more than 500 employees). The omitted category is medium firms. For religion, we use three dummy variables indicating the main religious group (Catholic, Muslim, Protestant and the rest) in the country (La Porta et al., 1999). We use additional controls to further raise our confidence against the omitted variable bias problem and to narrow down the channels through which legal origin may affect information availability. These controls, motivated by existing studies, include the following (data sources other than WBES in brackets): the political rights index (Gwartney et al., 2000), a measure of the overall quality of democracy (Polity variable from Marshall and Jaggers, 2009), absolute distance of the country from the equator, Latitude, as a proxy measure of overall development (La Porta et al., 1999), total population in 2000 (World Development Indicators, World Bank), the level of corruption (Transparency International), stringency of business regulations, Regulation, which equals 100 minus Heritage Foundation's Business Freedom Index (O'Driscoll et al., 2000), a dummy variable indicating whether a firm exports or not, a dummy variable for firms that have operations (offices) in foreign countries, and fixed effects for the legal organization of the firm (single proprietorship, partnership, cooper-
ative, privately held corporation, corporation listed on stock exchange and the residual category). 3. Estimation We use ordered logit estimation method with all standard errors clustered on the country. Regression results for Information are provided in Table 1. These results clearly show that irrespective of the set of controls, information availability is much better in common law than in civil law countries. The difference is economically large and statistically significant at less than the 5% level. For example, without any other controls, the probability that a firm reports that information is very easily available (Information = 6) rises by 6.7 percentage points when we move from civil to common law (column 5, Table 1), a large effect given that only 16.9% of the firms in the full sample find information very easily available. This marginal effect declines to 4.3 percentage points when we control for our main robustness variables (column 7, Table 1). However, it remains relatively stable otherwise (column 8, Table 1). We performed a number of additional robustness checks. For example, we added the following controls to the list above: sector and continent fixed effects (Europe and North America, Latin America and Caribbean, Asia and Africa), ethno-linguistic fractionalization index (La Porta et al., 1999), a dummy variable indicating if Right to Information Act is implemented in the country, and percentage of its sales that a firm reports for tax purposes and regulation measures
Table 1 Ordered logit. (1)
(2)
(3)
(4)
(5)
.560⁎⁎⁎ (.000) −.251⁎⁎⁎
.305⁎⁎ (.020) −.267⁎⁎⁎
.334⁎⁎ (.022) −.364⁎⁎⁎
.067⁎⁎⁎ (.005)
(.001) .348⁎⁎⁎ (.000) .153⁎⁎ (.019)
(.000) .334⁎⁎⁎
(.000) .281⁎⁎⁎ (.001) .061 (.602) .052 (.772) .144 (.471) Yes .026 (.674) −.011 (.670) −.245⁎⁎⁎
(6)
(7)
(8)
Dependent variable: Information Log odds ratios English
.461⁎⁎⁎ (.003)
Small Large GDP per capita (log values)
Marginal effects for the highest value of Information
PR Presidential system Religion fixed effects Political rights index
(.000) .193⁎ (.061) −.138 (.344) .194 (.482) Yes
Polity Population (log values) Latitude Corruption Government owned firm Firm is an exporter Firm operates in a foreign country Ownership type fixed effects Regulation (Heritage Foundation) Predicted probability Sample size (countries)
4972 (50)
4831 (49)
4625 (47)
.081⁎⁎⁎ (.001) −.033⁎⁎⁎
.043⁎⁎ (.022) −.036⁎⁎⁎
.044⁎⁎ (.027) −.044⁎⁎⁎
(.001) .050⁎⁎⁎ (.000) .021⁎⁎ (.020)
(.000) .049⁎⁎⁎ (.000) .027⁎ (.068) −.019 (.343) .027 (.479) Yes
(.000) .037⁎⁎⁎ (.001) .008 (.603) .007 (.771) .018 (.468) Yes .003 (.674) −.001 (.670) −.031⁎⁎⁎
(.000) .217 (.484) .104 (.116) .509⁎⁎⁎
(.000) .027 (.487) .013 (.118) .075⁎⁎⁎
(.002) −.016 (.806) −.037 (.651) Yes .022 (.905)
(.007) −.002 (.806) −.005 (.648) Yes .003 (.906) .148 3935 (45)
3935 (45)
.169 4972 (50)
.164 4831 (49)
.167 4625 (47)
1) p-values in brackets; all standard errors are clustered on country; significance level is denoted by ⁎⁎⁎(1% or less), ⁎⁎(5% or less) and ⁎(10% or less). Religion fixed effects are dummies indicating the main religion of the country (Muslim, Catholic, Protestant and Others). Sample size varies due to missing observations. 2) Columns 1–4 report the log odds ratios from the ordered logit specification. Columns 5–8 show the corresponding marginal effects (evaluated at the mean value of explanatory variables) for the highest value of the dependent variable (information most easily available).
M. Amin / Economics Letters 107 (2010) 273–275 Table 2 Public Access to Information (PAI). Dependent variable: PAI
(1)
English
3.81 15.4⁎⁎ 16.4⁎⁎ (.623) (.020) (.029) Yes Yes 9.66⁎⁎⁎ (.000)
Religion fixed effects GDP per capita (log values)
(2)
(3)
PR Presidential system
(4)
(5)
15.5⁎⁎ (.035) Yes 8.44⁎⁎⁎ (.000) 1.90 (.688) 4.39 (.401)
15.6⁎⁎ (.040) Yes 7.70⁎ (.067) .697 (.910) 8.82⁎
Political rights index Polity Latitude Population (log values) Corruption Regulation (Heritage Foundation) (log values) Observations 49 R-squared .005
49 .488
46 .672
44 .689
(.075) 1.38 (.732) 1.57 (.186) − 12.8 (.461) 3.08 (.224) −.653 (.837) −.409 (.960) 42 .746
1) p-values in brackets; all standard errors are Huber–White robust and clustered on country; significance level is denoted by ⁎⁎⁎(1% or less), ⁎⁎(5% or less) and ⁎(10% or less). 2) Religion fixed effects are dummies indicating the main religion of the country (Muslim, Catholic, Protestant and Others). Sample size varies due to missing observations. 3) All regressions use a constant term (not shown).
from the World Bank's Doing Business project (number of procedures to start a business, enforce a contract, register a property and the rigidity of employment index). With all these controls, the estimated marginal effect of the English dummy remained positive and significant, equaling .062 (p-value of .011) in magnitude. 4. Robustness of the dependent variable We check the robustness of the results above using a more recent proxy measure of information availability. This proxy measure is the Public Access to Information (PAI) sub-index of the Global Integrity index. The sub-index is based on eight different dimensions of information availability such as a citizen's right to government records and his/her right to appeal if access to information is denied, the time and cost involved in getting information from the government, and if the government provides reasons or not in case access to information is denied to a particular individual. We note that the index is based on both, laws on the books and the actual practice followed. Higher values of the index imply better information availability.
275
We use values of the PAI index averaged over 2006–2008. We also update all the control variables discussed above to the most recent year (2006–2008) for which they are available. Regression results using PAI are provided in Table 2. These results confirm that the availability of information is better in common law compared with civil law countries, although conditional on the main religious group in the country. None of the other controls make much difference to the positive, economically large and statistically significant relationship between PAI and English (columns 2–5, Table 2). For example, with all the controls, a move from civil to common law increases the PAI index by 15.6 points or about 29% of the mean value of PAI (column 5, Table 2). 5. Conclusion The paper extends the theory of legal origins to another dimension of institutional development by showing that information on rules and regulations is more easily available to firms in common law compared with civil law countries. More work is required to understand precisely why this is so and the appropriate remedial measures. Acknowledgements I would like to thank Penelope J. Brook, Simeon Djankov, Rita Ramalho, G.V. Rao, Siddharth Sharma, participants at a seminar organized by the Enterprise Analysis Unit, World Bank, and an anonymous referee for useful comments. All remaining errors are my own. References Thorsten, Beck, Clarke, George, Groff, Alberto, Keefer, Philip, Walsh, Patrick, 2001. New tools in comparative political economy: the database of political institutions. World Bank Economic Review 15 (1), 165–176. Botero, Juan, Djankov, Simeon, La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2004. The regulation of labor. Quarterly Journal of Economics 119 (4), 1339–1382. Djankov, Simeon, La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2002. The regulation of entry. Quarterly Journal of Economics 117 (1), 1–37. Djankov, Simeon, La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2003. Courts. Quarterly Journal of Economics 118 (2), 453–517. Gwartney, Jim, Lawson, Robert, Samida, Dexter, 2000. Economic Freedom of the World: 2000 Annual Report. The Fraser Institute, Vancouver, BC. La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, Vishny, Robert, 1999. The quality of government. Journal of Law, Economics and Organization 15 (1), 222–279. La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2008. The economic consequences of legal origins. Journal of Economic Literature 46 (2), 285–332. Marshall, Monty G., Jaggers, Keith, 2009. Polity IV project. George Mason University and Center for Systemic Peace, Center for Global Policy. O'Driscoll, Gerald P., Holmes, Kim R., Kirkpatrick, Melanie, 2000. 2000 index of economic freedom. Heritage Foundation, Washington DC.
Contents lists available at ScienceDirect
Economics Letters j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e c o l e t
What firms know Mohammad Amin ⁎ Enterprise Analysis Unit, World Bank, Washington, DC 20433, USA
a r t i c l e
i n f o
Article history: Received 9 June 2008 Received in revised form 20 January 2010 Accepted 24 February 2010 Available online 1 March 2010
a b s t r a c t The present paper contributes to the literature on legal origins by showing that the ease with which information on rules and regulations is available to firms is much better in common law compared with civil law countries. © 2010 Elsevier B.V. All rights reserved.
JEL Classification: H1 K4 P11 P51 Keywords: Legal origin Information Regulation
1. Introduction A large literature documents poorer quality of institutions in civil law compared with common law countries. Examples include entry regulation (Djankov et al., 2002), contract enforcement (Djankov et al., 2003) and labor laws (Botero et al., 2004). The present paper contributes to this literature by showing that another dimension of institutional development, the ease with which information on rules and regulations is available to firms (information availability), follows a similar pattern. That is, information availability is better in common law compared with civil law countries. One reason for this could be that governments in common law countries tend to interfere less with the functioning of the economy, which implies a less complex web of rules and regulations, and hence less burden on firms in obtaining all the information. Another possibility is that civil law countries have a more centralized system of law-making where legislators draft laws “without gaps” (La Porta et al., 2008). The more detailed codification of laws is likely to aggravate information requirements. 2. Data and main variables Our main data source is a firm level survey conducted by the World Bank in 1999–2000 (World Business Environment Survey, WBES 1999). The WBES data are a nationally representative stratified
⁎ Corresponding author. Tel.: +1 202 473 1915. E-mail address: [email protected]. 0165-1765/$ – see front matter © 2010 Elsevier B.V. All rights reserved. doi:10.1016/j.econlet.2010.02.005
random sample of firms with a common questionnaire and sampling methodology for all participating countries. One concern with the WBES could be that it is almost a decade old. In Section 4, we provide additional evidence supporting our main results using a more recent proxy measure of information availability. The main dependent variable, Information, equals the response of firms to the following statement in the WBES: “In general, information on the laws and regulations affecting my firm is easy to obtain.” Response was recorded on a 1–6 scale: fully disagree (1), disagree in most cases (2), tend to disagree (3), tend to agree (4), agree in most cases (5), and fully agree (6). The mean value of Information equals 4.1 and the standard deviation is 1.41. Percentages of firms reporting lowest to highest value of Information equal 5.5%, 9.5%, 14%, 25%, 29% and 17%, respectively.1 Our main explanatory variable, English, is a dummy equal to 1 if a country's legal structure is based on the English common law (20 countries) and 0 otherwise (French civil law, 30 countries). Data source for the variable is La Porta et al. (1999). Following the literature, we control for a number of variables to address the omitted variable bias problem. Values of these control variables are for the year 2000 or the closest (to 2000) year available. These variables include (data sources other than WBES in brackets) a dummy variable, PR, which is equal to 1
1 We note that the dependent variable is a subjective measure and could vary across firms depending on their personal experiences and how they interpret “tend to agree”, “fully agree”, etc. While this requires some caution in interpreting our results, we do not have any reason to believe that the stated subjectivity is systematically correlated with the legal tradition of countries.
274
M. Amin / Economics Letters 107 (2010) 273–275
if the electoral rule for the lower house is a form of proportional representation and 0 otherwise (Beck et al., 2001), a dummy variable equal to 1 if the executive head is directly elected and 0 otherwise (Beck et al., 2001), log of GDP per capita, PPP adjusted, and in constant 2000 USD (World Development Indicators, World Bank), and two dummy variables which indicate whether the firm is small (Small, less than 50 employees) or large (Large, more than 500 employees). The omitted category is medium firms. For religion, we use three dummy variables indicating the main religious group (Catholic, Muslim, Protestant and the rest) in the country (La Porta et al., 1999). We use additional controls to further raise our confidence against the omitted variable bias problem and to narrow down the channels through which legal origin may affect information availability. These controls, motivated by existing studies, include the following (data sources other than WBES in brackets): the political rights index (Gwartney et al., 2000), a measure of the overall quality of democracy (Polity variable from Marshall and Jaggers, 2009), absolute distance of the country from the equator, Latitude, as a proxy measure of overall development (La Porta et al., 1999), total population in 2000 (World Development Indicators, World Bank), the level of corruption (Transparency International), stringency of business regulations, Regulation, which equals 100 minus Heritage Foundation's Business Freedom Index (O'Driscoll et al., 2000), a dummy variable indicating whether a firm exports or not, a dummy variable for firms that have operations (offices) in foreign countries, and fixed effects for the legal organization of the firm (single proprietorship, partnership, cooper-
ative, privately held corporation, corporation listed on stock exchange and the residual category). 3. Estimation We use ordered logit estimation method with all standard errors clustered on the country. Regression results for Information are provided in Table 1. These results clearly show that irrespective of the set of controls, information availability is much better in common law than in civil law countries. The difference is economically large and statistically significant at less than the 5% level. For example, without any other controls, the probability that a firm reports that information is very easily available (Information = 6) rises by 6.7 percentage points when we move from civil to common law (column 5, Table 1), a large effect given that only 16.9% of the firms in the full sample find information very easily available. This marginal effect declines to 4.3 percentage points when we control for our main robustness variables (column 7, Table 1). However, it remains relatively stable otherwise (column 8, Table 1). We performed a number of additional robustness checks. For example, we added the following controls to the list above: sector and continent fixed effects (Europe and North America, Latin America and Caribbean, Asia and Africa), ethno-linguistic fractionalization index (La Porta et al., 1999), a dummy variable indicating if Right to Information Act is implemented in the country, and percentage of its sales that a firm reports for tax purposes and regulation measures
Table 1 Ordered logit. (1)
(2)
(3)
(4)
(5)
.560⁎⁎⁎ (.000) −.251⁎⁎⁎
.305⁎⁎ (.020) −.267⁎⁎⁎
.334⁎⁎ (.022) −.364⁎⁎⁎
.067⁎⁎⁎ (.005)
(.001) .348⁎⁎⁎ (.000) .153⁎⁎ (.019)
(.000) .334⁎⁎⁎
(.000) .281⁎⁎⁎ (.001) .061 (.602) .052 (.772) .144 (.471) Yes .026 (.674) −.011 (.670) −.245⁎⁎⁎
(6)
(7)
(8)
Dependent variable: Information Log odds ratios English
.461⁎⁎⁎ (.003)
Small Large GDP per capita (log values)
Marginal effects for the highest value of Information
PR Presidential system Religion fixed effects Political rights index
(.000) .193⁎ (.061) −.138 (.344) .194 (.482) Yes
Polity Population (log values) Latitude Corruption Government owned firm Firm is an exporter Firm operates in a foreign country Ownership type fixed effects Regulation (Heritage Foundation) Predicted probability Sample size (countries)
4972 (50)
4831 (49)
4625 (47)
.081⁎⁎⁎ (.001) −.033⁎⁎⁎
.043⁎⁎ (.022) −.036⁎⁎⁎
.044⁎⁎ (.027) −.044⁎⁎⁎
(.001) .050⁎⁎⁎ (.000) .021⁎⁎ (.020)
(.000) .049⁎⁎⁎ (.000) .027⁎ (.068) −.019 (.343) .027 (.479) Yes
(.000) .037⁎⁎⁎ (.001) .008 (.603) .007 (.771) .018 (.468) Yes .003 (.674) −.001 (.670) −.031⁎⁎⁎
(.000) .217 (.484) .104 (.116) .509⁎⁎⁎
(.000) .027 (.487) .013 (.118) .075⁎⁎⁎
(.002) −.016 (.806) −.037 (.651) Yes .022 (.905)
(.007) −.002 (.806) −.005 (.648) Yes .003 (.906) .148 3935 (45)
3935 (45)
.169 4972 (50)
.164 4831 (49)
.167 4625 (47)
1) p-values in brackets; all standard errors are clustered on country; significance level is denoted by ⁎⁎⁎(1% or less), ⁎⁎(5% or less) and ⁎(10% or less). Religion fixed effects are dummies indicating the main religion of the country (Muslim, Catholic, Protestant and Others). Sample size varies due to missing observations. 2) Columns 1–4 report the log odds ratios from the ordered logit specification. Columns 5–8 show the corresponding marginal effects (evaluated at the mean value of explanatory variables) for the highest value of the dependent variable (information most easily available).
M. Amin / Economics Letters 107 (2010) 273–275 Table 2 Public Access to Information (PAI). Dependent variable: PAI
(1)
English
3.81 15.4⁎⁎ 16.4⁎⁎ (.623) (.020) (.029) Yes Yes 9.66⁎⁎⁎ (.000)
Religion fixed effects GDP per capita (log values)
(2)
(3)
PR Presidential system
(4)
(5)
15.5⁎⁎ (.035) Yes 8.44⁎⁎⁎ (.000) 1.90 (.688) 4.39 (.401)
15.6⁎⁎ (.040) Yes 7.70⁎ (.067) .697 (.910) 8.82⁎
Political rights index Polity Latitude Population (log values) Corruption Regulation (Heritage Foundation) (log values) Observations 49 R-squared .005
49 .488
46 .672
44 .689
(.075) 1.38 (.732) 1.57 (.186) − 12.8 (.461) 3.08 (.224) −.653 (.837) −.409 (.960) 42 .746
1) p-values in brackets; all standard errors are Huber–White robust and clustered on country; significance level is denoted by ⁎⁎⁎(1% or less), ⁎⁎(5% or less) and ⁎(10% or less). 2) Religion fixed effects are dummies indicating the main religion of the country (Muslim, Catholic, Protestant and Others). Sample size varies due to missing observations. 3) All regressions use a constant term (not shown).
from the World Bank's Doing Business project (number of procedures to start a business, enforce a contract, register a property and the rigidity of employment index). With all these controls, the estimated marginal effect of the English dummy remained positive and significant, equaling .062 (p-value of .011) in magnitude. 4. Robustness of the dependent variable We check the robustness of the results above using a more recent proxy measure of information availability. This proxy measure is the Public Access to Information (PAI) sub-index of the Global Integrity index. The sub-index is based on eight different dimensions of information availability such as a citizen's right to government records and his/her right to appeal if access to information is denied, the time and cost involved in getting information from the government, and if the government provides reasons or not in case access to information is denied to a particular individual. We note that the index is based on both, laws on the books and the actual practice followed. Higher values of the index imply better information availability.
275
We use values of the PAI index averaged over 2006–2008. We also update all the control variables discussed above to the most recent year (2006–2008) for which they are available. Regression results using PAI are provided in Table 2. These results confirm that the availability of information is better in common law compared with civil law countries, although conditional on the main religious group in the country. None of the other controls make much difference to the positive, economically large and statistically significant relationship between PAI and English (columns 2–5, Table 2). For example, with all the controls, a move from civil to common law increases the PAI index by 15.6 points or about 29% of the mean value of PAI (column 5, Table 2). 5. Conclusion The paper extends the theory of legal origins to another dimension of institutional development by showing that information on rules and regulations is more easily available to firms in common law compared with civil law countries. More work is required to understand precisely why this is so and the appropriate remedial measures. Acknowledgements I would like to thank Penelope J. Brook, Simeon Djankov, Rita Ramalho, G.V. Rao, Siddharth Sharma, participants at a seminar organized by the Enterprise Analysis Unit, World Bank, and an anonymous referee for useful comments. All remaining errors are my own. References Thorsten, Beck, Clarke, George, Groff, Alberto, Keefer, Philip, Walsh, Patrick, 2001. New tools in comparative political economy: the database of political institutions. World Bank Economic Review 15 (1), 165–176. Botero, Juan, Djankov, Simeon, La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2004. The regulation of labor. Quarterly Journal of Economics 119 (4), 1339–1382. Djankov, Simeon, La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2002. The regulation of entry. Quarterly Journal of Economics 117 (1), 1–37. Djankov, Simeon, La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2003. Courts. Quarterly Journal of Economics 118 (2), 453–517. Gwartney, Jim, Lawson, Robert, Samida, Dexter, 2000. Economic Freedom of the World: 2000 Annual Report. The Fraser Institute, Vancouver, BC. La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, Vishny, Robert, 1999. The quality of government. Journal of Law, Economics and Organization 15 (1), 222–279. La Porta, Rafael, Lopez-de Silanes, Florencio, Shleifer, Andrei, 2008. The economic consequences of legal origins. Journal of Economic Literature 46 (2), 285–332. Marshall, Monty G., Jaggers, Keith, 2009. Polity IV project. George Mason University and Center for Systemic Peace, Center for Global Policy. O'Driscoll, Gerald P., Holmes, Kim R., Kirkpatrick, Melanie, 2000. 2000 index of economic freedom. Heritage Foundation, Washington DC.