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Legal Origins and the Evolution of Institutions: Evidence from American State Courts

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Author Info
Daniel Berkowitz
Karen Clay

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Abstract

Several important studies of institutions assume that the quality of institutions is persistent following some formative historic event. The assumption of institutional persistence, however, begs the question of how these institutions persisted. To better understand this issue, this paper examines the evolution of state courts in the United States. We begin by reviewing the evidence that France, Spain, and Mexico operated civil-law legal systems in territory that would later make up thirteen states. One important philosophical difference between civil-law and common-law legal systems arises from differences in their beliefs regarding the appropriate degree of judicial independence. To show how these beliefs, if persistent, would manifest themselves, we present a model in which legislatures allocate budgets to their judges. In the model, common and civil-law legislatures have different preferences regarding the level of judicial independence. Our model predicts civil-law legislatures will give fewer discretionary resources to their judges when judicial elections are replaced by a system of appointments. We confirm this prediction using state-level data for the period 1961-1999. Finally, we argue that one important reason why civil-law preferences for a weak judiciary appear to have persisted in the American states is that the political culture within state legislatures is slow-moving.

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Paper provided by University of Pittsburgh, Department of Economics in its series Working Papers with number 320.

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Date of creation: Jun 2007
Date of revision: Jun 2007
Handle: RePEc:pit:wpaper:320

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  1. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February. [Downloadable!] (restricted)
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  2. Timothy Besley & Anne Case, 2003. "Political Institutions and Policy Choices: Evidence from the United States," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 7-73, March.
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  3. Landes, William M & Posner, Richard A, 1975. "The Independent Judiciary in an Interest-Group Perspective," Journal of Law & Economics, University of Chicago Press, vol. 18(3), pages 875-901, December.
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  4. Stanley L. Engerman & Kenneth L. Sokoloff, 2001. "The Evolution of Suffrage Institutions in the New World," NBER Working Papers 8512, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December. [Downloadable!] (restricted)
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  6. F. Andrew Hanssen, 2004. "Is There a Politically Optimal Level of Judicial Independence?," American Economic Review, American Economic Association, vol. 94(3), pages 712-729, June. [Downloadable!] (restricted)
  7. Glaeser, Edward & Scheinkman, Jose & Shleifer, Andrei, 2003. "The injustice of inequality," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 199-222, January. [Downloadable!] (restricted)
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  8. Daniel Berkowitz & Chris Bonneau & Karen Clay, 2006. "Judicial Independence and Minority Interests," Working Papers 286, University of Pittsburgh, Department of Economics, revised Nov 2006. [Downloadable!]
  9. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December. [Downloadable!] (restricted)
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  10. Henning Bohn & Robert P. Inman, 1996. "Balanced Budget Rules and Public Deficits: Evidence from the U.S. States," NBER Working Papers 5533, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September. [Downloadable!] (restricted)
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  12. F. Andrew Hanssen, 2004. "Learning about Judicial Independence: Institutional Change in the State Courts," Journal of Legal Studies, University of Chicago Press, vol. 33, pages 431-473. [Downloadable!]
  13. Mahoney, Paul G, 2001. "The Common Law and Economic Growth: Hayek Might Be Right," Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 503-25, Part I Ju.
  14. Ramseyer, J Mark, 1994. "The Puzzling (In)dependence of Courts: A Comparative Approach," Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 721-47, June.
  15. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06. [Downloadable!]
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  16. Daniel Berkowitz & Karen Clay, 2006. "The Effect of Judicial Independence on Courts: Evidence from the American States," Journal of Legal Studies, University of Chicago Press, vol. 35, pages 399-440. [Downloadable!]
  17. Daniel Berkowitz & Karina Pistor & Jean-Francois Richard, 2001. "Economic Development, Legality, and the Transplant Effect," William Davidson Institute Working Papers Series 410, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  1. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2007. "The Economic Consequences of Legal Origins," NBER Working Papers 13608, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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