Rule Proliferation and Institutional Quality in the Enterprise Bankruptcy Law of the People's Republic of China, 1986-2009

Abstract

Does an increase in the quantity of legal rules influence the overall quality of the formal institution to which they belong? In this article, we draw upon a longitudinal analysis of the People's Republic of China's Enterprise Bankruptcy Law in order to answer this question. We aim to examine the degree to which the proliferation of legal provisions, as opposed to the elaboration of the statute, affects organisational compliance with the law. In doing this, we find that when the expansion of the law leads to rule accretion in the absence of rule refinement, the use of the bankruptcy law by private organisations diminishes.