Can Quantification Aid the Comparative Task?

So far, we have examined cultural comparative law as a social-science-inspired methodology that may help the discipline of comparative law to accommodate modern legal developments, i.e. globalization of laws. In the next few posts, I would like to look at another relatively new comparative law method that was developed by economists: quantitative comparative law.

In the late 1990s, a group of economists (mostly known under the abbreviation LLSV) published several papers examining commercial laws of 49 countries of the world. In doing so, they used statistical tests to determine which laws are more efficient and therefore more likely to attract businesses. With this methodology, they reached the provocative result that

[…] countries whose legal rules originate in the common law tradition tend to protect investors considerably better than do countries whose laws originate in the civil law, and especially the French civil law, tradition. [LLSV 1996, p. 40]

Naturally, this conclusion and even more its inclusion in the 2004 and 2006 Doing Business reports of the World Bank have resulted in a wave of (critical) publications from (comparative) jurists, mostly from civil law countries. The main points of critique were the apparent bias towards the common law tradition (LLSV have a common law background) and the reliance on legal origins to group the legal systems of the world.

I will talk about the legal origins theory in my next post. For now, I would like to focus on the quantification as a possible methodology in comparative law. In contrast to cultural comparative law, quantitative comparative law looks at large samples of legal systems which are clustered and quantified. The use of numbers as a comparative tool, makes the comparison more objective and leads to clear-cut results. Such results, however, can be misleading in two ways: First, depending on the choice of variables, results may be biased – usually towards the legal system with which the author of the study is most familiar. Second, laws are never identical and their substitution with mere numbers may obliterate legal diversity. So while quantification may provide a valuable overview and might be an important first step in a series of comparative analysis, results should be viewed with a grain of salt and put further into perspective.

Bibliography

• Rafael La Porta et al., Law and Finance, NBER Working Paper 5661 (1996)
• Rafael La Porta et al., Legal Determinants of External Finance, 52 J. OF FINANCE 1131-1150 (1997)
• Rafael La Porta et al., Law and Finance, 106 J. POL. ECON. 1113-1155 (1998)
• Ralf Michaels, Comparative Law by Numbers? Legal Origins Thesis, Doing Business Reports, and the Silence of Traditional Comparative Law, 57 AM. J. COMP. L. 765-795 (2009)
• Catherine Valcke, The French Response to the World Bank’s Doing Business Reports, 60 UNIV. TORONTO L J 197-217 (2010)