Testing Legal Origins Theory within France: Customary Laws versus Roman Code
David Le Bris
KEDGE Business School
May 1, 2014
Legal origin theory emphasizes the negative consequences of civil law on financial and, subsequently, economic development. Before the Revolution, French territory was strictly divided according to the legal regime. Since the Middle-Ages, the southern part of France was under the Roman civil law and the north was under customary laws which, as with common law, gave more flexibility to judges and less right to the state. This dichotomy offers the unique opportunity to test the legal origin theory free from cross-country bias. Using fiscal revenues across 79 Departments from 1817-1821, we test if Departments under civil law, over the centuries and up to 15 years ago, exhibit lower financial and economic outcomes. We find that civil law Departments do exhibit lower economic performances but this difference is not robust when controlled for fundamental factors. The civil law appears even to have a positive effect in many specifications. Old Regime France does not confirm the legal origin theory.
Number of Pages in PDF File: 36
Keywords: Law and Finance, Economic development, France
JEL Classification: 043, O1, P48, N43working papers series
Date posted: November 25, 2013 ; Last revised: November 14, 2014
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