Finding the “Democratic Advantage” in Sovereign Bond Ratings: The Importance of Strong Courts, Property Rights Protection, and the Rule of Law

2012 ◽  
Vol 66 (3) ◽  
pp. 515-535 ◽  
Author(s):  
Glen Biglaiser ◽  
Joseph L. Staats
Keyword(s):  
Property Rights ◽  
Rule Of Law ◽  
Credit Rating ◽  
Bond Ratings ◽  
The Rule Of Law ◽  
Rating Agencies ◽  
Sovereign Bond ◽  
Positive Effects ◽  
Property Rights Protection ◽  
Democratic Advantage

AbstractMuch scholarship in the political economy literature has investigated the influence of the democratic advantage on sovereign bond ratings by credit rating agencies (CRAs). Missing from earlier work, however, is inquiry into the effects on bond ratings of factors that lower political risk, such as adherence to the rule of law, the presence of a strong and independent judicial system, and protection of property rights. Using panel data for up to thirty-six developing countries from 1996 to 2006, we find that rule of law, strong and independent courts, and protection of property rights have significant positive effects on bond ratings. Policymakers wanting to obtain higher bond ratings and increased revenue from bond sales would do well to heed the message contained in these findings.

Sovereign Bond Ratings and the Democratic Advantage

2008 ◽  
Vol 41 (8) ◽  
pp. 1092-1116 ◽  
Author(s):  
Glen Biglaiser ◽  
Brian Hicks ◽  
Caitlin Huggins
Keyword(s):  
Developing Countries ◽  
Political Institutions ◽  
Private Equity ◽  
Credit Rating ◽  
Bond Ratings ◽  
Heckman Model ◽  
Rating Agencies ◽  
Portfolio Flows ◽  
Sovereign Bond ◽  
Democratic Advantage

As developing countries expose portfolio investors to potential high risk, it is expected that investors will follow the advice of credit rating agencies (CRAs) before sending capital abroad. Controlling for political and economic explanations in the literature, the authors use panel data for 50 developing countries from 1987 to 2003 to determine if changes in CRA ratings affect portfolio flows. Using a two-stage Heckman model, they find that countries that are under newer political institutions and facing economic challenges are more likely to be selected by portfolio investors because they offer risk premia, but that CRA ratings and democracy have significant positive signaling effects on the countries that receive the largest private equity inflows. In fact, democracy and bond ratings are the most important for the poorest developing countries. The results suggest the significance of CRA ratings for equity investors and contribute a revision for the democratic advantage debate.

Open Access Order and Interconnected Institutions in Brazil: A Challenge

2019 ◽  
Vol 12 (1) ◽  
pp. 1-40
Author(s):  
Guanghua Yu
Keyword(s):  
Open Access ◽  
Rule Of Law ◽  
Political Representation ◽  
Political Organizations ◽  
Historical Evidence ◽  
The Rule Of Law ◽  
Rights Protection ◽  
Economic Organizations ◽  
Property Rights Protection

AbstractThis article examines the evolution of democratic practice in Brazil. The article begins with a discussion on the country’s performance in terms of social equality, violence, and weak economy after the consolidation of democracy in 1985. Based on historical evidence, the article offers explanations concerning the weak performance in Brazil. The case of Brazil provides a challenge to the theory of open access order of North and his colleagues in the sense that open access to political organizations and activities does not necessarily lead to either better political representation or better economic performance. The case of Brazil also shows that open access to economic organizations and activities in the absence of the necessary institutions in the areas of property rights protection and contract enforcement, the financial market, the rule of law, and human resources accumulation does not lead to long-term economic growth.

scholarly journals Analysis of Determinants of Split Ratings and Rating Conservativeness between Japanese and US Credit Rating Agencies

2013 ◽  
Vol 3 (1) ◽  
pp. 182 ◽  
Author(s):  
Yoshiki Shimizu ◽  
Junghee Lee ◽  
Hideki Takei
Keyword(s):  
Credit Rating ◽  
Multivariate Regression Analysis ◽  
Credit Rating Agencies ◽  
Bond Ratings ◽  
Rating Agencies ◽  
Thomson Reuters ◽  
Asset Liquidity ◽  
The Us ◽  
Japanese Companies ◽  
Split Ratings

In the previous paper, we confirmed the existence of the split ratings between Japanese and US credit rating agencies (CRAs). Our study did not support early studies suggesting that the split ratings were merely random occurrences. Rather, our findings suggested that the split ratings occurring between Japanese and US CRAs were not random and frequently occurring. The Japanese CRA assigned less conservative ratings than the US CRAs. In this paper, we performed the multivariate regression analysis to find variables which would differentiate the degree of rating conservativeness. Our samples were 192 Japanese companies which were assigned their ratings by Japanese and US credit rating agencies. We used 10-year bond ratings of these companies from 2000 and 2009. Our data sources were Nikkei NEEDS-Financial Quest for Japanese ratings and financial information and Thomson Reuters Datastream for US ratings. All financial data of the 192 firms were collected from Nikkei NEEDS-Financial Quest. According to our findings, Japanese agency seems to put higher weight on ROA than US agencies while all agencies seem to use variables such as asset, liquidity, and leverage to assign ratings. We assume that this is the main variable that has differentiated the degree of rating conservativeness.

The political economy of insecure property rights: insights from the Kingdom of Sicily

2019 ◽  
Vol 16 (2) ◽  
pp. 233-249 ◽  
Author(s):  
Rosolino A. Candela
Keyword(s):  
Political Economy ◽  
Property Rights ◽  
State Formation ◽  
Rule Of Law ◽  
The Political ◽  
Market Exchange ◽  
Credible Commitment ◽  
The Rule Of Law ◽  
Definition Of ◽  
The 19Th Century

AbstractHow did the evolution of the rule of law become stunted in Sicily during the 19th century? The work of economist Yoram Barzel, particularly his property-rights approach to understanding the political economy of state formation, is uniquely suited to understanding the failure of Italy's unification process to secure the rule of law in Sicily during the 19th century. This failure can be explained by a lack of a credible commitment to the rule of law in the state formation process. I argue that this lack of credible commitment manifested itself in the abolition of previously existing parliamentary institutions as an independent collective action mechanism, as well as prior constitutional agreements that existed in the Kingdom of Sicily. The resulting uncertainty over the security and legal definition of property rights over land raised the transaction costs of competing for resources through productive specialization and market exchange. In turn, it reduced the relative costs of competition for land ownership and the use of enforcement through other means, such as rent seeking or organized crime.

China's Emerging Credit Rating Industry: The Official Foundations of Private Authority

2008 ◽  
Vol 193 ◽  
pp. 65-83 ◽  
Author(s):  
Scott Kennedy
Keyword(s):  
Financial Markets ◽  
Stock Markets ◽  
Credit Rating ◽  
Credit Rating Agencies ◽  
Bond Ratings ◽  
Trade Associations ◽  
Rating Agencies ◽  
Market Participants ◽  
Private Authority ◽  
Private Actors

AbstractAlthough China has had difficulty improving the performance of its banks and stock markets, it has struggled even more to develop a credit rating industry. Credit rating agencies (CRA), which provide bond ratings, are vital to financial markets in advanced capitalist countries, but China's credit rating companies are weak and have had little influence over the behaviour of those who issue or invest in bonds. Some argue that CRAs gain authority through their strong reputation in the eyes of market participants, but the experience of rating agencies in China supports evidence from elsewhere that their private authority is largely dependent on government mandate, a benefit China's CRAs have only recently begun to enjoy. Many private actors, from trade associations to charity groups, are struggling to gain public influence in China, but credit rating agencies may be the best barometer to measure the Chinese government's general stance towards private authority.

scholarly journals PROPERTY AND THE RULE OF LAW

Legal Theory ◽  
2014 ◽  
Vol 20 (2) ◽  
pp. 79-105 ◽  
Author(s):  
Lisa M. Austin
Keyword(s):  
Property Rights ◽  
Rule Of Law ◽  
Private Property ◽  
Common Law ◽  
Civil Liberties ◽  
Private Property Rights ◽  
The Rule Of Law ◽  
Substantive Content ◽  
The Relationship ◽  
New Framework

This paper offers a new framework for thinking about the relationship between the common law of property and the rule of law. The standard way of framing this relationship is within the terms of the form/substance debate within the literature on the rule of law: Does the rule of law include only formal and procedural aspects or does it also encompass and support substantive rights such as private property rights and civil liberties? By focusing on the nature of common-law reasoning, I wish to question the form/substance dichotomy that frames this debate and to show that the formal aspects of the rule of law are in fact principles widely adopted within the practice of common-law reasoning and as such play a large role in shaping the substantive content of common-law property rights. Understanding this has implications beyond the relationship between property law and the rule of law.

scholarly journals The Concept of Four "Bio" in Law and Legislation

2020 ◽  
Vol 15 (8) ◽  
pp. 146-154
Author(s):  
A. A. Mokhov
Keyword(s):  
Law Enforcement ◽  
Strategic Planning ◽  
Public Relations ◽  
Rule Of Law ◽  
The State ◽  
The Rule Of Law ◽  
Positive Effects ◽  
Social Sphere ◽  
Innovative Economy ◽  
Law And Legislation

Developing biotechnologies have an impact not only on technical, technological and other economic processes, but also on industries and sectors of the economy, public relations, and change the prevailing stereotypes of behavior and habits. In this regard, new sprouts of an innovative economy, and the changing social sphere, the psychology of individual groups and communities determine the need for a unified balanced biopolitics. This policy manifests itself in the provisions of the rule of law and legislation, strategic planning documents, and in law enforcement. Due to the nontriviality of technologies, their great potential opportunities, as well as challenges, risks and threats for the population, society, biopolitics is becoming an important factor in the policy pursued in general. The author proves the need for systemic and comprehensive regulation of biotechnologies allowed for use, taking into account their biological and other types of safety, contribution (positive effects) to the developing bioeconomy and development of society. In connection with the above, the concept of the four "bio" (biotechnology — biosafety — bioeconomics — biopolitics) is proposed, which requires the development of law and legislation based on modern trends in the development of technology, economy, society and the state.

scholarly journals PENGECUALIAN PERJANJIAN HAK KEKAYAAN INTELEKTUAL DALAM HUKUM PERSAINGAN USAHA

FIAT JUSTISIA ◽  
2016 ◽  
Vol 9 (4) ◽  
Author(s):  
Dani Amran Hakim
Keyword(s):  
Intellectual Property ◽  
Property Rights ◽  
Intellectual Property Rights ◽  
Rule Of Law ◽  
Integrated Circuit ◽  
Business Environment ◽  
License Agreement ◽  
The Rule Of Law ◽  
Article 50 ◽  
The Right

Law business competition in the country Indonesia know the exceptions  to assert that a the rule of law expressed does not apply for those kind certain agents or behavior particular activity. Law competition business environment in general grant an exemption on the basis of agreement , for example agreement intellectual property rights (IPR). IPR is incentives and reason was given the right monopolizes and protection because IPR need resources and time in an effort to get it, based on article 50 alphabet b Law on Business Competition. An exemption based on article 50 alphabet b Law on Business Competition the elaborated competition supervisory commission by issuing commission rules business competition supervisory Law Number 2 of 2009 on Exceptions The Application of the Law Number 5 of 1999 on Prohibition of Monopoly and Unfair Business Competition of a Pertaining to Intellectual Property Rights Scope arrangement based on Commission Rules Business Competition Supervisory Number 2 of 2009 is: (1) the license agreement that is in scope patent, the right brand, copyright, the right industrial design, the right design the layout integrated circuit and the right trade. (2) Trademark and brand services. (3) the design layout integrated circuit. Keywords: Exeptions, Intellectal Property Rights, Business Competition Law

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