The book `Just get out of the way&#x27; (<a href="http:&#x2F;&#x2F;www.independent.org&#x2F;publications&#x2F;tir&#x2F;article.asp?a=512" rel="nofollow">http:&#x2F;&#x2F;www.independent.org&#x2F;publications&#x2F;tir&#x2F;article.asp?a=51...</a>) addresses this topic.  One point the author makes is that honest and competent government officials are one of the most scarce and valuable resources for a developing country, and thus institutions and laws should be designed to lighten their workload.<p>One example are insolvency laws.<p>In most countries, there are three options: creditors and debtors reach an agreement.  Liquidation.  And Administration (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Administration_(law)" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Administration_(law)</a>) ordered by court.<p>Administration is complicated, and requires complicated laws and competent and honest officials to administer the laws.  So countries, especially poor ones, should not offer this alternative.<p>If the company is worth more alive than dead, creditors and debtors will come to an agreement.  (Especially if you remove the alternative of administration, that gives the debtor an out, rendering the creditors threats toothless.)