Legal Institutions and Informal Networks

DSpace/Manakin Repository

Legal Institutions and Informal Networks

Citable link to this page


Title: Legal Institutions and Informal Networks
Author: Bueno de Mesquita, Ethan; Stephenson, Matthew Caleb

Note: Order does not necessarily reflect citation order of authors.

Citation: Ethan Bueno de Mesquita & Matthew Stephenson, Legal Institutions and Informal Networks, 18 J. Theoretical Pol. 40 (2006).
Access Status: Full text of the requested work is not available in DASH at this time (“dark deposit”). For more information on dark deposits, see our FAQ.
Full Text & Related Files:
Abstract: The relationship between third-party contract enforcement and informal networks raises important sociological, political, and economic questions. When economic activity is embedded in social structures, what are the implications of third-party contract enforcement for the scope and nature of economic relations? What determines whether individuals rely on formal legal institutions or informal networks to sustain trade relationships? Do legal institutions erode informal networks? We develop a model in which a trade-off exists between size and sustainability of networks. By adding the possibility of fee-based, enforceable contracts, we provide a theoretical explanation for the coexistence of legal contract enforcement and an informal economy. We find that legal enforcement has little effect on networks until law becomes sufficiently inexpensive, at which point small decreases in the cost of law have dramatic effects on network size and the frequency of use of the legal system.
Published Version:
Other Sources:
Citable link to this page:
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)


Search DASH

Advanced Search