Democracy, Judicial Attitudes and Heterogeneity: The Civil Versus Common Law Tradition

Abstract

A key issue in the design of a legal system is the choice of the mechanism aggregating citizens ’ preferences over the harshness of punishment. While under Case law appellate judges ’ biases offset one another at the cost of volatility of the law, under Statute law a corruptible Legislator chooses certain rules that are biased only if she favors special interests: i.e., when the preference heterogeneity is sufficiently high and/or the political process sufficiently inefficient. Thus, society should possibly choose Case law only in the last scenario. Instrumental variables estimates based on data from 156 countries, which possibly reformed the transplanted law making institution, confirm this prediction