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Labor Regulation, Corporate Governance, and Legal Origin: A Case of Institutional Complementarity?

Published online by Cambridge University Press:  01 January 2024

Beth Ahlering  and
Simon Deakin
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Abstract

We explore the influential claim that “legal origin”—the historical origin of a given national legal system in the common law or civil law—accounts for a significant degree of cross-national diversity in economic regulation and development. We show that the claim is undermined by problems in index construction and by a misreading of the implications of the common law/civil law divide for the respective roles of courts and legislatures in law making. We argue that a critical factor, instead, was the timing of industrialization in relation to the emergence of legal institutions associated with the modern business enterprise (the employment relationship and the joint stock company). We also show how distinctive “legal cultures” of the common law and civil law have played a part in setting national systems on separate pathways to economic development.

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Type
Articles of General Interest
Information
Law & Society Review , Volume 41 , Issue 4 , December 2007 , pp. 865 - 908
Copyright
© 2007 Law and Society Association.

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Footnotes

The research on which this work is based was supported by the U.K. Economic and Social Research Council (ESRC)'s core grant to the University of Cambridge Centre for Business Research; by the 21st Century Centre of Excellence program of the Ministry of Education, Culture, Sports, Science and Technology, Japan; by the Omron Fund at Doshisha University, Kyoto; and by the ESRC's World Finance and Economy Programme. We are grateful to the above for their support and to John Armour, Andrew Lang, Mathias Siems, Ajit Singh, two anonymous referees, and the editor of Law & Society Review for their comments on earlier drafts. We especially thank Anna Bullock for her advice and assistance on data analysis.

References

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