Search our site
The Heart of Mars by Paul Magrs Read the opening extract of the brand new Paul Magrs book before its publication on 15/03/2018

Solomon's Knot How Law Can End the Poverty of Nations by Robert D. Cooter, Hans-Bernd Schafer


Solomon's Knot How Law Can End the Poverty of Nations by Robert D. Cooter, Hans-Bernd Schafer

Sustained growth depends on innovation, whether it's cutting-edge software from Silicon Valley, an improved assembly line in Sichuan, or a new export market for Swaziland's leather. Developing a new idea requires money, which poses a problem of trust. The innovator must trust the investor with his idea and the investor must trust the innovator with her money. Robert Cooter and Hans-Bernd Schfer call this the double trust dilemma of development. Nowhere is this problem more acute than in poorer nations, where the failure to solve it results in stagnant economies. In Solomon's Knot, Cooter and Schfer propose a legal theory of economic growth that details how effective property, contract, and business laws help to unite capital and ideas. They also demonstrate why ineffective private and business laws are the root cause of the poverty of nations in today's world. Without the legal institutions that allow innovation and entrepreneurship to thrive, other attempts to spur economic growth are destined to fail.


Cooter and Schafer apply insights from the field of law and economics to the problem of poverty. They describe how institutions like contracts overcome dilemmas of trust at the heart of economic transactions. Readers interested in understanding the law and economics approach would do well to start with this well-written volume, which develops a model of the legal institutions needed for innovation... [A] significant contribution to the field. --Choice [C]ompelling. --Michael Strong, Barron's Rich in institutional detail, wisdom and practical advice. --Alex Tabarrok, Marginal Revolution The authors, Cooter and Schafer, skilfully avoid economics verbiage and complicated legal terms, providing instead a plethora of anecdotes, appropriate examples and studies. --Lisa Kaaki, Arab News Solomon's Knot remains an entertaining and comprehensive read. It successfully conveys the main theories of law and economics within the context of promoting innovation as a source of sustained growth. Moreover, it proposes clear and simple policy recommendations for developing countries to adopt in pursuit of greater wealth creation and economic development. --Christel Y. Tham, Journal of International Law and Politics

About the Author

Robert D. Cooter is the Herman F. Selvin Professor of Law at the University of California, Berkeley. His books include The Strategic Constitution (Princeton). Hans-Bernd Schafer is professor of law and economics at the Bucerius Law School in Hamburg, Germany, and professor emeritus at the University of Hamburg. His books include The Economic Analysis of Civil Law.

More books by this author
Author 'Like for Like' recommendations

Loading other formats...

Book Info

Publication date

25th August 2013


Robert D. Cooter, Hans-Bernd Schafer

More books by Robert D. Cooter, Hans-Bernd Schafer
Author 'Like for Like'


Princeton University Press


344 pages


Economic growth
Law & society



Discover new authors and enjoy old favourites; oodles of literary gems to uncover at Lovereading with candid reviews from real reviewers.

Emily Wright

Lovereading recommends, honestly reviews and promotes books-what more can I say?!

Rachel Bridgeman

I recommend Lovereading because you get honest reviews on a whole range of genres-there's something for everyone. It's the only site I need.

Sian Spinney

Lovereading is like booking a holiday, you don't know what it will be like and it is a whole new experience.

Sue Burton

Lovereading always comes up with great suggestions and has introduced me to enjoyable books and new authors to discover.

Gaynor Passmore

Lovereading tells me about new books before they hit the shelves, lets me find other authors I may like and has great prize draws!

Sheila Dale

I love Lovereading because of its ability to connect people that love books & unite them in a friendly, stimulating & interesting community.

Megan Olwen William

For me, to read is to learn, to reflect, to escape, to think, to contemplate and my time for space and calm.

Sally Ellsmore