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.
| ISBN: | 9780691159713 |
| Publication date: | 25th August 2013 |
| Author: | Robert D. Cooter, Hans-Bernd Schäfer |
| Publisher: | Princeton University Press |
| Format: | Paperback |
| Pagination: | 344 pages |
| Series: | The Kauffman Foundation Series on Innovation and Entrepreneurship |
| Genres: |
Economic theory and philosophy Political economy Industry and industrial studies Company, commercial and competition law: general Financial law: general Development economics and emerging economies International relations |