Legal Systems and Economic Growth By Vadym Cemmasson and Dariane Dank

1. Legal Systems and Economic Growth By Vadym Cemmasson and Dariane Dank

2. Legal Systems • Three major legal systems • Civil Law (France, Germany, Italy, Brazil, Mexico, Russia) (80) • Common Law (GB, USA (-Louisiana), Canada (- Quebec), Australia) (23) • Religious Law (Afghanistan, Saudi Arabia, Maldives Islands) (4)

3. Legal Systems

4. Legal Systems Civil Law • The oldest and most widespread system of law in the world • Based on Roman law especially Corpus Juris Civilis (“Body of Civil Law”) -> compiled to the code under the Byzantine Emperor Justinian • Prominent example: Code Civil is the French Law Code established by Napoléon Bonaparte (Code Napoléon) • Civil law is interpreted by judges rather than developed or made by them

5. Legal Systems Common Law • System of law whose sources are the decisions in cases by judges • Legislature passes new laws and statutes -> do not amend a collected and codified body of law • Developed in England and influenced by the Norman conquest of England (William the Conqueror) • Inherited by the Commonwealth of Nations (adopted by almost every former British colony) • Magna Carta -> fundamental document (limited on the power of the English Kings) • Stare decisis -> major difference to civil law system

6. Legal Systems Religious Law • Refers to the notion of a religious system or document being used as a legal source • The use of Jewish Halakah for public law-> precluding amendment through legislative acts of government or development through judicial precedent • Christian Canon law is more similar to civil law • Islamic Sharia law is based on legal precedent and reasoning by analogy

7. Legal Systems Pluralistic Law • Civil law and common law (Israel, Philippines) • Civil law and religious law (Iraq, Iran, Egypt) • Common law and religious law (India, Bangladesh)

8. Legal Systems Comparative Law The study of differences and similarities between the law in different countries. Separate branches of comparative law: • Constitutional law • Administrative law • Civil law • Commercial law • Criminal law

9. Legal Systems International Law The system of implicit and explicit agreements that bind together nation-states in adherence to recognized values and standards. • It primarily concerns states rather than private citizens • Public international law • Private international law • Supranational law

10. Legal Systems World distribution

11. Economic Growth • Common law countries tend to protect investors (directly) more than civil law countries (shareholders value) • Civil law countries => adaptive protection mechanisms (indirect protection f.e. different accounting standards) (stakeholder value) „Law and Finance“,La Porta, Shleifer; Harvard University

12. Average GNI • Gross National Income(GNI) comprises the total value produced within a country (i.e. its Gross Domestic Product), together with its income received from other countries (notably interest and dividends), less similar payments made to other countries. • Legal Systems with civil law components: 6 449 • Legal systems with common law components: 7 150 • Legal systems with civil law and common law components: 11 948

13. Thank you for your attention!