The Common Law and Economic Growth: Hayek Might Be Right

Posted: 12 Nov 2001

See all articles by Paul G. Mahoney

Paul G. Mahoney

University of Virginia School of Law

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Recent finance scholarship finds that countries with legal systems based on the common law provide better investor protections and have more developed financial markets than civil law countries. These findings echo Hayek's claims of the superiority of English to French legal institutions. In this paper, I present evidence that common law countries experienced faster economic growth than civil law countries during the period 1960-1992. I suggest that the difference reflects the common law's greater orientation toward private economic activity and the civil law's greater orientation toward government intervention.

JEL Classification: H11, K10, O17

Suggested Citation

Mahoney, Paul G., The Common Law and Economic Growth: Hayek Might Be Right. Journal of Legal Studies, Vol. 30, No. 2, pp. 503-525, June 2001, Available at SSRN:

Paul G. Mahoney (Contact Author)

University of Virginia School of Law ( email )

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