| Summary: | This study examined the links between legal systems and economic development, focusing on the relationship between law and finance. New datasets were created, charting legal change over time in the areas of shareholder protection, creditor protection and labour regulation. Indices with up to 60 indicators were used to code for the law of five significant countries (France, Germany, India, the United Kingdom and the United States of America) for 36 years (1970-2005), and reduced-form indices of 10-12 indicators to code for a wider sample (25 countries) for the period 1995-2005. The coding methods used marked an advance on previous studies, by incorporating a wider range of legal and regulatory variables and taking into account the different ways in which regulatory rules can be expressed (as mandatory rules or as ‘defaults’ applying in the absence of contrary agreement). Time-series and panel data econometric analysis were used to test for correlations between the scores in the indices and economic performance variables.
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