2 - Market and Institutional Environment in Emerging Economies

Summary

This chapter provides a general overview of the market and institutional environments existing in emerging economies. Despite the divergences existing across jurisdictions, this chapter shows that most emerging economies share some common features, including the existence of an institutional environment that generally comprises inefficient judicial systems, high levels of corruption, low levels of protection of property rights, and a weak rule of law. Other features commonly found in emerging economies include the existence of underdeveloped financial systems and the prevalence of micro- and small enterprises and large controlled firms. This chapter, and therefore the understanding of the market and institutional environments existing in emerging economies, will provide the basis for the understanding of the insolvency framework for emerging economies suggested in this book.