This paper examines legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the qual- ity of their enforcement in 49 countries. The results show that common-law countries generally have the strongest, and French- civil-law countries the weakest, legal protections of investors, with German- and Scandinavian-civil-law countries located in the mid- dle. We also find that concentration of ownership of shares in the largest public companies is negatively related to investor protec- tions, consistent with the hypothesis that small, diversified share- holders are unlikely to be important in countries that fail to protect their rights.