NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Coase v. the Coasians

Simon Johnson, Andrei Shleifer

NBER Working Paper No. 7447
Issued in December 1999
NBER Program(s):   CF   PE

The Coase theorem implies that, in a world of positive transaction costs, any of a number of strategies, including judicially enforced private contracts, judicially enforced laws, or even government regulation, may be the cheapest way to bring about efficient resource allocation. Unfortunately, some Coasians have ignored the possibility that the last of these strategies may sometimes be the best. This paper compares the regulation of financial markets in Poland and the Czech Republic in the 1990s, when the judicial systems remained underdeveloped in both countries. In Poland, strict enforcement of the securities law by an independent Securities and Exchange Commission was associated with rapid development of the stock market. In the Czech Republic, hands-off regulation was associated with a near collapse of the stock market. These episodes illustrate the centrality of law enforcement in making markets work, and the possible role of regulators in law enforcement.

download in pdf format
   (2680 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7447

Published: Edward Glaeser & Simon Johnson & Andrei Shleifer, 2001. "Coase Versus The Coasians," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 853-899, August.

Users who downloaded this paper also downloaded* these:
Brown w7191 Private Pensions, Mortality Risk, and the Decision to Annuitize
Levitt and Porter w7210 Sample Selection in the Estimation of Air Bag and Seat Belt Effectiveness
Gordon and Lee w7433 Do Taxes Affect Corporate Debt Policy? Evidence from US Corporate Tax Return Data
Harris, Hubbard, and Kemsley w7445 The Share Price Effects of Dividend Taxes and Tax Imputation Credits
Chay and Greenstone w7442 The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us