Taken the prevalence of institutionalist and Rule of Law approach in the contemporary debate on economic development, this paper intends to discuss some theoretical limits of this literature, either positive or normative, mainly in its application to discussions related to the financial sector. this article claims that the spurring of development based on Rule of Law programs usually assumes a very limited view of the roles played by the law. according to the prevailing view, the role played by institutions in economic development is restricted to providing legal protection for private investors, who are assumed to be the central actors of the financial system. this paper, however, takes a different path and tries to argue that there are different institutional alternatives of economic organization, which goes beyond an arrangement based on capital market and atomized shareholders. an example of that is the brazilian financial system: in spite of recent Rule of Law type of reforms it is still dependent of a developmental bank - BNDES. as a conclusion, the article sustains that indeed law and institutions matter for development, but there are a variety of possible institutional arrangements and also several roles and functions to be played by legal tools, a lot broader than it is supposed by Rule of Law development programs. a successful institutional organization based on a development bank is an example of that.
institutional alternatives; development bank; Rule of Law; BNDES; law and development; development financing
