An Economic Analysis of Civil versus Common Law Property

56 Pages Posted: 7 Mar 2012 Last revised: 1 Mar 2013

Yun-chien Chang

Academia Sinica - Institutum Iurisprudentiae (IIAS); Cornell Law School

Henry E. Smith

Harvard Law School

Date Written: February 17, 2012

Abstract

Common law and civil law property appear to be quite different, with the former emphasizing pieces of ownership called estates and the latter focusing on holistic ownership. And yet the two systems are remarkably similar in their broad outlines, for functional reasons. This paper offers a transaction cost explanation for the practical similarity and the differing styles of delineating property and ownership in the two systems. As opposed to the “complete” property system that could obtain in the world of zero transaction costs, actual property systems employ structures characterized by shortcuts in order to achieve property’s substantive goals of protecting interests in use. Overlooking this structure leads to the bundle of rights picture of property, even though property is a structured bundle of relationships. The architecture of property consists in part of four basic relationships, and a number of characteristic features of property automatically arise out this architecture, including exclusion rights, in rem status, and running to successors. Where civil law and common law differ is in their style of delineation, which reflects the path dependence of initial investment in feudal fragmentation in the common law and Roman-inspired holistic dominion in civil law. This transaction cost explanation for the functional similarities but different delineation process in the two systems promises to put the comparative law of property on a sounder descriptive footing.

Keywords: property, common law, civil law, bundle of rights, style of delineation, path dependence

JEL Classification: K11

Suggested Citation

Chang, Yun-chien and Smith, Henry E., An Economic Analysis of Civil versus Common Law Property (February 17, 2012). 88 Notre Dame Law Review 1-55 (2012); Harvard Public Law Working Paper No. 12-19. Available at SSRN: https://ssrn.com/abstract=2017816

Yun-chien Chang

Academia Sinica - Institutum Iurisprudentiae (IIAS) ( email )

128 Academia Sinica Rd., Sec. 2
Nankang
Taipei City, 11529
Taiwan

Cornell Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

Henry E. Smith (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

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