What Determines Rule of Law? An Empirical Investigation of Rival Models

In the growing literature on the creation of institutions, the theories emphasizing colonial origin ( <link rid="b37">Mauro, 1995</link>), legal origin and religious affiliation ( <link rid="b34">La Porta et al., 1999</link>), Western European influence ( <link rid="b21">Hall and Jones, 1999</link>), and settler mortality ( <link rid="b2">Acemoglu et al., 2001</link>), have been especially influential. The validity and influence of these studies rests heavily on empirical modeling, which, since the theories are obviously closely related, might actually capture the same primary mechanism. It is therefore unclear whether the empirical relationships found are the same or if they are different. Therefore, this paper takes the empirical models seriously in order to discriminate among the existing models and to identify the model and variables that best explain the variation in institutional quality. The aim of this paper is thus to provide answers to the following questions: (i) Is there one model which explains more of the variation in institutional quality than the other models? (ii) Do these models capture the same information? And (iii), if we let the information in the data decide, which combination of variables would be selected? Copyright 2009 Blackwell Publishing Ltd.