The Macroeconomic Effects of Legal-Simplification Programmes

UECE Working Paper No. 12/2012

31 Pages Posted: 16 Jul 2013

See all articles by Luís F. Costa

Luís F. Costa

ISEG - Lisbon School of Economics & Management of Universidade de Lisboa; UECE (Research Unit on Complexity and Economics)

Miguel St. Aubyn

Technical University of Lisbon - ISEG (School of Economics and Management); UECE (Research Unit on Complexity and Economics)

Date Written: February 2012

Abstract

Legal simplification may improve the quality of institutions in industrialised countries that developed over-complex legal systems. In theory, this type of regulatory reform promotes economic efficiency, leading to higher levels of productivity and output. In this paper we use a Panel Factor-Augmented VAR approach to measure the long-run impact of legal-simplification programmes in total factor productivity. We identify shocks using data on regulatory quality and exploring qualitative information publicly available. The estimated long-run impact on total factor productivity of a typical programme is significant and about 0.6 per cent.

Keywords: legal simplification, regulatory reform, FAVAR, productivity

JEL Classification: E02, K10, K20, K40, O43, O47

Suggested Citation

Costa, Luís Filipe Pereira da and St. Aubyn, Miguel, The Macroeconomic Effects of Legal-Simplification Programmes (February 2012). UECE Working Paper No. 12/2012. Available at SSRN: https://ssrn.com/abstract=2294170 or http://dx.doi.org/10.2139/ssrn.2294170

Luís Filipe Pereira da Costa

ISEG - Lisbon School of Economics & Management of Universidade de Lisboa ( email )

Rua do Quelhas 6
Lisboa, 1200-781
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+351 213 922 808 (Fax)

HOME PAGE: http://www.iseg.ulisboa.pt/~lukosta

UECE (Research Unit on Complexity and Economics)

ISEG/ULisboa
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Lisboa, 1249-078
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HOME PAGE: http://www.iseg.utl.pt/~uece/

Miguel St. Aubyn (Contact Author)

Technical University of Lisbon - ISEG (School of Economics and Management) ( email )

Rua do Quelhas, 6
1200-071 Lisboa
Portugal
+351 21 392 5987 (Phone)

HOME PAGE: http://www.iseg.utl.pt/~mstaubyn

UECE (Research Unit on Complexity and Economics)

ISEG/UTL, Rua Miguel Lupi 20
1249-078 Lisboa
Portugal
+351-213 925 912 (Phone)
+351-213 971 196 (Fax)

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