Judicial Checks and Balances
Rafael La Porta
Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)
Florencio Lopez de Silanes
EDHEC Business School; National Bureau of Economic Research (NBER); Tinbergen Institute
Columbia University - School of International & Public Affairs (SIPA)
Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)
In the Anglo-American constitutional tradition, judicial checks and balances are often seen as crucial guarantees of freedom. Hayek (1960) distinguishes two ways in which the judiciary provides such checks and balances: judicial independence and constitutional review. We create a new data base of constitutional rules in 71 countries that reflect these provisions. We find strong support for the proposition that both judicial independence and constitutional review are associated with greater freedom. Consistent with theory, judicial independence accounts for some of the positive effect of common law legal origin on measures of economic freedom. The results point to significant benefits of the Anglo-American system of government for freedom.
Number of Pages in PDF File: 35
JEL Classification: K4, O10, P16, P17working papers series
Date posted: June 5, 2003
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