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The Common Law and Economic Growth: Hayek Might be Right

Paul G. Mahoney
University of Virginia School of Law

Journal of Legal Studies, Vol. 30, No. 2, pp. 503-525, June 2001

Abstract:
Recent finance scholarship finds that countries with legal systems based on the common law provide better investor protections and have more developed financial markets than civil law countries. These findings echo Hayek's claims of the superiority of English to French legal institutions. In this paper, I present evidence that common law countries experienced faster economic growth than civil law countries during the period 1960-1992. I suggest that the difference reflects the common law's greater orientation toward private economic activity and the civil law's greater orientation toward government intervention.

JEL Classifications: H11, K10, O17

Accepted Paper Series

Date posted: November 12, 2001 ; Last revised: August 26, 2009

Suggested Citation

Mahoney, Paul G., The Common Law and Economic Growth: Hayek Might be Right. Journal of Legal Studies, Vol. 30, No. 2, pp. 503-525, June 2001. Available at SSRN: http://ssrn.com/abstract=285131

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Contact Information

Paul G. Mahoney (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
434-924-3996 (Phone)
434-924-7536 (Fax)