Agents’ Response to Inefficient Judiciary: Social Norms and the Law in Transition

Aleksandra Gregoric, Katarina Zajc, Marko Simoneti

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    The paper questions the impact of rule-based governance in an environment with poor legal enforcement and general mistrust in the law-setting institutions. We conduct a quasi-experiment and a survey to prove that ‘law on books’ can still play a role by triggering the social norm of ‘obeying the law’. We furthermore expose and empirically confirm the role of the Corporate Governance Code as a signaling tool, and discuss why in a weak institutional environment the Code’s potential may be even stronger than in the developed market economies.
    Original languageEnglish
    JournalEuropean Journal of Law and Economics
    Issue number1
    Pages (from-to)147-172
    Number of pages26
    Publication statusPublished - 2012

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