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. Therefore, they affect economic outcomes to date. These differences would reflect both a stronger historical emphasis of common law on private ordering and the higher adaptability of judge-made law.

Colonial Transplantation and Main Structural Differences

While English common law originated in thirteenth century England and has then been transplanted through colonization and occupation to England’s ex-colonies (United States, Canada, Australia, and several countries in Central America, Africa and Asia), the Scandinavian common law was developed in Denmark and Sweden and the German common law sprang in Germany and Switzerland. These last four countries then exported their common law model to the respective colonies or to those jurisdictions (China, Greece, Japan, Romania, South Korea, Taiwan, Thailand, and Turkey), which were never colonized but borrowed their initial legal order from the European codes considered most advanced at the time.

Civil law instead has its roots in Roman law, was incorporated by the Napoleonic codes first and then by both the Austrian and Russian Civil codes, and has been then introduced via mainly colonization and occupation into continental Europe, the Near East, Latin America, Africa, and Indochina. Bulgaria, Ethiopia, Iran, and Kazakhstan instead purposely borrowed their initial legal order from either France, Russia, or England.

Structurally, the two legal traditions constitute a well-defined bundle of lawmaking and adjudication institutions and operate in quite different ways [Merryman 1969, p.&nbsp;52, 123–127; Zweigert and Kötz 1998, p.&nbsp;272]. While common law entrusts a key role to the precedents selected by appellate judges and allows more procedural discretion to lower adjudicating courts, <blockquote>"The former were concerned about the powerful English king’s ability to interfere in adjudication and bargained for trial by local, lay juries, a right enshrined in Magna Carta. The relatively weak French crown, by contrast, was less a threat than other barons. French barons accordingly desired a centralized adjudication system controlled by royal judges who would not be easily captured by local interests."</blockquote>Napoleon’s attempt to turn through its codes the judiciary into bureaucrats controlled by the State and the post-1688 Glorious Revolution success of the English judiciary in establishing its independence should have reinforced these dissimilarities, instilling at the same time into the common law a stronger emphasis on judicial independence and on private ordering. This divergence would imply that common law will always shore up markets and the civil law will always restrict markets or replace them with state command.

  1. Appellate judges can effectively introduce new information into the law by distinguishing the precedent.

References

Sources

  • Merryman, John H., 1969. The Civil Law Tradition. Stanford University Press, Stanford.
  • Roe, Mark J., 2004. Convergence and Persistence in Corporate Governance. Cambridge University Press, Cambridge, UK.
  • World Bank. 2004. Doing Business in 2004: Understanding Regulation. Oxford University Press on behalf of the World Bank, Washington, DC.
  • Zweigert, Konrad, and Hein Kötz. 1998. Introduction to Comparative Law, 3rd ed. Oxford University Press, Oxford-New York.