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Law and Social Capital: Evidence from the Code Napoleon in Germany

  • Johannes C. Buggle

Do legal institutions affect norms of cooperation? Using the introduction of the Code Napoleon during the Napoleonic Wars in Germany as a historical experiment, I show that a positive shock to the quality of legal institutions can increase social-capital long-lastingly. I find that individuals living in regions where the Code Napoleon was used display higher levels of interpersonal trust in the data of the German Socio-Economic Panel (SOEP). This result holds true conditional on past development levels, as well as in a less heterogeneous border sample, separating regions that applied the Code Napoleon from those that did not. Artificially moving the border and comparing regional pre-treatment characteristics support the interpretation of a causal treatment effect. In addition, I show immediate effects of the Code Civil on novel measures of 19th century social capital. The analysis of historical employment data furthermore suggests economic cooperation to be a potential mechanism for the relationship between legal institutions and social capital.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.424945.de/diw_sp0566.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 566.

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Length: 51 p.
Date of creation: 2013
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp566
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