Enforcement of contracts and property rights lies at the heart of sustainable economic growth. During the past decade, our understanding of the historical evolution of various institutional mechanisms to cope with this issue has been greatly enhanced and in many ways, in particular by the so-called historical and institutional analysis formalized in a game-theoretic framework. The analysis demonstrates that these mechanisms, whether informally organized through repeated interaction of economic agents or formally institutionalized in a state-backed legal system, were central to the securing of property rights and contract enforcement around the world. Meanwhile, the burgeoning research on economic growth and convergence has also pointed to the importance of formal legal institution. The so-called legal origins debate centres on the relative merits of common law versus civil law and the impact of these two different legal regimes on the financial structure, corporate governance and industrial organization in the respective countries and regions.
Another strand of literature pioneered by sociologists and legal historians such as Max Weber had long argued that unique features of Western legal institution, i.e. legal formalism and the rule of law, laid the foundation of modern capitalism in the West. The Weberian thesis has been hotly contested among scholars of comparative law and area studies. Recent research on non-Western legal traditions have not only challenged or refuted – and sometimes enriched or reinforced - the prevailing premises, but also vastly improved our knowledge in this area based on new archival and empirical findings.
This conference aims to bring such a truly global perspective to examine the relationship between law and long-term economic growth. It is striking that the narrow focus on Western legal regimes among institutional and growth economists, led to a fundamental neglect of important non-Western legal traditions such as Chinese, Islamic or Hindu, that had shaped – and continues to shape – institutions for contract enforcement in these great civilizations. Meanwhile, the rich and varied findings from the comparative law historians and area specialists have rarely been linked up with an economic analysis to address the fundamental issue of long-term economic growth. We hope to gather a group of experts from the disciplines such as economics, history, area studies, comparative law, political science to address the following important questions:
1. What is the fundamental nature of different legal traditions and institutions around the world? What are the major similarities and differences of different legal traditions? For example, how are different legal institutions organized around the world? What are their relationships with other organizations such as the state or commercial organization? How arbitrary or rule-bound is the legal system in a comparative framework? Is the “rule of law” ideal unique only to the West? And how and when it evolved in the West or elsewhere? Is legal tradition relevant to the “Great Divergence” debate?
2. What are the interaction and mutual influence between legal traditions throughout history? In modern era, an important development is the adoption and absorption of Western legal systems around the world whether through colonization or voluntary introduction? What are the major lessons of failures and success in these cases as measured by their impact on long-term economic growth in these countries? What are the conflicts, tensions or innovations that emerged in this process?
3. What is the relative economic efficiency of different legal regimes both in the short-run and long-run? While we are interested in theoretical models and explanations, we are also keen on specific case studies and empirical research that (micro or macro level) to delineate the economic impact of different legal traditions and institutions on economic performance, and specifically on financial market, credit institutions, corporate governance, commercial organization, market structure, government bureaucracy and so on.
The plan is to organize a three-day workshop in the tradition of the Global Economic History Network (GEHN) and the related conferences organized at Utrecht University, to be held on 21-23 September 2007, to discuss these issues. As with previous GEHN meeting and Utrecht conferences (see their programme on http://www.iisg.nl/hpw/conference.php), the Great Divergence debate will be the starting point of the meeting. We invite legal and economic historians to present papers on the legal traditions of parts of Eurasia – or Africa or the Americas – and their impact on long term economic development in the period before the Industrial Revolution. We are particularly interested in survey papers reviewing these big issues for major parts of the world, but detailed case studies clarifying the interaction between law and economic growth are also welcomed.
Please send, before March 1 2007, an abstract of your paper proposal to email@example.com and D.Ma1@lse.ac.uk.
Jan Luiten van Zanden (UU/IISG) and Debin Ma (LSE)