Tuesday, December 10, 2013

Le Bris on Law and Finance Theory in Old Regime France

David Le Bris, BEM Bordeaux Management School, has posted Customary versus Civil Law within Old Regime France.  Here is the abstract:
Law and finance 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 Justinian 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 law and finance 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 law and finance theory.

2 comments:

Tzung-Mou Wu said...

I wonder if Mr. Le Bris remembered that the Civil Code entered into effect in March, 1804, and wiped out the traditional dichotomy. It is also risky to assume that the more tax money a government can levy, the better the economic performance is.

Anonymous said...

-15 years of similar Code Civil can't erase 600 years of legal dichotomy.
- the tax amount is a fixed rate of what is earned: a higher tax amount means a better economic performance