68 Pages Posted: 29 May 2016 Last revised: 23 Jun 2016
Date Written: May 27, 2016
Do “cultural factors” substantively influence the creation and evolution of property institutions? For the past several decades, few legal scholars have answered affirmatively. Those inclined towards a law and economics methodology tend to see property institutions as the outcome of self-interested and utilitarian bargaining, and therefore often question the analytical usefulness of “culture.” The major emerging alternative, a progressive literature that emphasizes the social embeddedness of property institutions and individuals, is theoretically more accommodating of cultural analysis but has done very little of it.
This Article develops a “cultural” theory of how property institutions are created and demonstrates that such a theory is particularly powerful in explaining large-scale institutional differences between societies. Empirically, it argues that, in the two centuries before large-scale industrialization, China, England, and Japan displayed systematic and fundamental differences in their regulation of property use and transfer. It further argues that these legal and institutional differences are best explained by certain aspects of social culture, specifically by the criteria for sociopolitical status distribution. Some of these criteria are distinctly “cultural” in the sense that they were probably generated by the widespread social internalization of moral values, rather than by utilitarian bargaining.
Cultural paradigms can exist, therefore, in property institutions. If we assume, as conventional law and economics urges, that individuals generally approach property use and regulation through a self-interested and utilitarian mindset, their pursuit of personal utility can nonetheless be constrained or empowered by cultural norms of status distribution that determine their relative bargaining power.
Keywords: Property, Culture, Law and Economics, Modern China, Early Modern England, Tokugawa Japan
JEL Classification: K00, K11
Suggested Citation: Suggested Citation
Zhang, Taisu, Cultural Paradigms in Property Institutions (May 27, 2016). Yale Journal of International Law, Forthcoming; Yale Law & Economics Research Paper No. 545. Available at SSRN: https://ssrn.com/abstract=2785880
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