The Syndrome of the Efficiency of the Common Law

Our article is a methodological critique of the recent legal origins literature. We start by showing that the legal origins literature cannot easily be based on the efficiency hypothesis of the common law. By debunking the relationship between the efficiency hypothesis and the legal origins literature, we are left with no consistent theory to explain the alleged inferiority of French civil law. It is clear that the legal origins literature is based on a particular, biased selection of “cherry-picked” legal doctrines. A different selection of “cherry-picked” legal doctrines would produce a different assessment. We discuss examples that look at substantive law and procedure in the core areas of property, contracts, and torts. These are areas that have been documented as being crucial for economic growth. The second set of examples looks at the organization of the legal system and governance. The influence of these variables on economic growth is more controversial, but they are part of the argument against the efficiency of French civil law. We argue that a careful examination of rules and legal institutions shows that the inefficiency hypothesis of French law is not sustainable under the current framework of comparative law and economics. Our goal is not to argue that French law is more efficient than common law. Rather, our criticism is essentially methodological. Robust microbased assessments of rules and legal institutions should prevail over macro generalizations and “cherry-picking” theories that lack a serious theoretical framework. The academic discussion concerning the efficiency superiority of the common law should not overcome the detailed study of legal institutions around the world. Successful legal reforms need to address local problems under local restrictions and specific determinants. In our view, legal reforms based on misperceptions and generalizations are actually detrimental.