7 Law & Dev. Rev. 1 (2014)

handle is hein.journals/ldevr7 and id is 1 raw text is: 




Article


Giuseppe Maggio, Alessandro Romano* and Angela Troisi

The Legal Origin of Income Inequality


Abstract: The legal origin movement is implicitly functionalist, while it explicitly
prioritizes economic dimensions  of development.  From  this perspective, the
empirical findings presented in this paper seem to uncover the existence of a
paradox. On  the one hand, common  law  countries are apparently characterized
by countless advantages, yet they do not grow  faster than civil law countries.
On the other hand, common   law countries present a more unequal distribution
of income, thus suggesting that also from a static perspective there is no a priori
reason to prefer a common  law system. To further investigate this paradox, we
analyze if common   law countries are at least characterized by a better kind
(earned) of inequalities. However, as the economic distinction between inequal-
ities of opportunities and inequalities of effort is too fragile, this proved to be an
impossible task. We  are therefore left with the unsolved riddle of the contra-
dicting results obtained by the legal origins literature. From a more practical
perspective, the empirical findings seem to disprove the dogma that common
law countries are under every condition the perfect benchmark  for reforms in
developing countries.

Keywords:  income inequality, developing countries, legal origins, inequality of
opportunity, inequality of outcome


DOI 10.1515/ldr-2014-0003



I  Introduction

In the late 1990s, the series of papers known as Legal Origin from R. La Porta,
F. Lopez-de-Silanes, A. Shleifer, and R. W. Vishny (LLSV) drastically changed

*Corresponding author: Alessandro Romano, Institute of Law and Economics, Erasmus
University, Rotterdam, Netherlands; Department of Law, LUISS Guido Carli, Rome, Italy, E-mail:
aromano@live.it
Giuseppe Maggio, Department of Economics and Finance, LUISS Guido Carli, Rome, Italy,
E-mail: giuseppemaggio86@gmail.com
Angela Troisi, Department of Law, LUISS Guido Carli, Rome, Italy, E-mail: atroisi@luiss.it


LDR


The Law and Development Review 2014; 7(l): 1-21

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