Monthly Archives: April 2016

The “legal origins” theory claims that the two main legal traditions or origins, civil law and common law, crucially shape lawmaking and dispute adjudication and have not been reformed after the initial exogenous transplantation by Europeans. [1] Therefore, they affect economic outcomes to date. In particular, countries that received common law enjoy today “(a) improved financial development […], (b) […] better functioning labor markets […], and (c) less formalized and more independent judicial systems” [La Porta et al. 2008, p. 298].

Recent contributions, however, have criticized the ideas that transplanted legal traditions remained intact (Roe, 2004) and can be measured through legal origins dummies (Rosenthal and Voeten, 2007). Inspired by these studies, Guerriero (2016a) documents that in a cross-section of 155 transplants, which are countries that received their legal tradition externally, 25 reformed their lawmaking institution and 95 reformed at least one among their lawmaking and adjudication institutions. To illustrate, in countries that inherited statute law, reforms towards case law have been more likely the largest preference, and in particular both ethnic and genetic, diversity is and reforms towards a pure common law tradition, which is the mix of case law and some discretion in adjudication, are found where the quality of political institutions is the lowest. Symmetrically, in countries in which case law was transplanted, reforms towards a pure civil law tradition, which is the mix of statute law and bright-line adjudication rules, are found where the quality of political institutions is the highest. This evidence is consistent with the idea that appellate judges’ offsetting biases make common law unbiased but volatile and thus more efficient than the certain civil law only when the latter is sufficiently distorted by special interests, i.e., if preferences are sufficiently heterogeneous and/or the political process sufficiently inefficient.

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