Legal Origin or Colonial History?

By Daniel M. Klerman, USC Law School,
Paul Mahoney, University of Virginia School of Law,
Holger Spamann, Harvard Law School, and
Mark Ira Weinstein, Marshall School of Business

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Forthcoming in the Journal of Legal Analysis

Abstract

Economists have documented pervasive correlations between legal origins, modern regulation, and economic outcomes around the world. Where legal origin is exogenous, however, it is almost perfectly correlated with another set of potentially relevant background variables: the colonial policies of the European powers that spread the “origin” legal systems through the world. We attempt to disentangle these factors by exploiting the imperfect overlap of colonizer and legal origin, and looking at possible channels, such as the structure of the legal system, through which these factors might influence contemporary economic outcomes. We find strong evidence in favor of non-legal colonial explanations for economic growth. For other dependent variables, the results are mixed.

Subject Area

Banking and Finance, Civil Law, Comparative Law, Courts, Law and Economics, Legal History

Recommended Citation

Daniel M. Klerman, Paul Mahoney, Holger Spamann, and Mark Ira Weinstein, "Legal Origin or Colonial History?" (August 2011). University of Southern California. University of Southern California Law and Economics Working Paper Series. Working Paper 132.
http://law.bepress.com/usclwps/lewps/art132