The Divergence of Legal Procedures

Abstract

Simeon Djankov et al. (2003) introduce a measure of the quality of contract enforcement -- the formalism of civil procedure -- for 109 countries as of 2000. For 40 of these countries, we compute procedural formalism every year since 1950. We find that large differences in procedural formalism between common and civil law countries existed in 1950 and widened by 2000. For this area of law, the findings are inconsistent with the hypothesis that national legal systems are converging, and support the view that legal origins exert long lasting influence on legal rules. (JEL K41, O17)

Finance and Inequality: How Does Globalization Change Their Relationship?

“…Merryman et al (1994) and Del Duca (2007), among others, are supportive of the hypothesis of common and civil law convergence, whereas Legrand (1996), Juenger (1997), and Kerameus (1997), among others, disapprove of the convergence hypothesis. Among economists, only Balas et al (2009) examine the convergence hypothesis. Their empirical findings on the formalism of legal procedure are inconsistent with the convergence hypothesis.…”

Financial Regulation, Financial Globalization, and the Synchronization of Economic Activity

“…Our identification scheme builds on the insights of the law and finance literature showing that sound investor protection and legal quality lead to deep and efficient capital markets (see La Porta et al (1997Porta et al ( , 1998, La Porta, Lopez-de-Silanes, and Shleifer (2008)). It is also related to a new strand in the corporate finance and law and economics literatures that examines the effects of legal convergence on capital markets (see Balas et al (2009), Enriques and Volpin (2007), and Christensen, Hail, and Leuz (2011), among others). Our identification method associates changes in the legal-regulatory environment governing financial intermediation that aim to harmonize segmented financial systems with changes in cross-border banking activities among countries that adopt the same piece of legislation, and in turn with changes in output synchronization.…”

1. At the Intersection: A Review of Institutions in Economic Development

“…One view could be that legal procedures are on trend toward convergence and that given enough time all legal systems will approximate some optimum. However, in newer work, Balas et al (2009) showed that procedural formalism across countries with different legal origins has if anything diverged since 1950, suggesting important forces prevent convergence even if procedural formalism is associated with worse outcomes.…”