22.02.2017

Book Review: Solomon's Knot

400Solomon’s Knot is a double tie. For Robert D. Cooter and Hans-Bernard Schaefer, authors of the book by the same name and published by Princeton University Press, the knot is the one between law and economical growth in the developing countries.

According to them, only laws can create the right environment for these nations to prosper: an example would be obliging parties to respect contracts, while in many countries opening a new business is always a matter of long time and complex procedures. In Venezuela, according to the data reported by the authors, 141 days and 16 procedures are needed, versus the 5 days and 1 procedure in Canada.

From this descends the problem of corruption, which is not only moral but also creates hurdles to competitivity of firms. In many of the countries analyzed by Cooter and Schaefer, corruption is indeed a hindrance for anyone wanting to invest in these markets.

Chapter after chapter, Solomon’s Knot talks about the various aspects that are advantaged by a code of laws that is also respected. Property is one of the topics that are covered in the volume, while poverty is not just a state but also «dangerous».

Cooter is professor of Law at the University of Berkeley while Schaefer teaches law and economics in Hamburg and is professor emeritus at the University of Hamburg.

 






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