Law and Inequality: A Comparative Approach to the Distributive Implications of Legal Systems

Barriola, Illan and Deffains, Bruno and Musy, Olivier (2022): Law and Inequality: A Comparative Approach to the Distributive Implications of Legal Systems.

Abstract

The literature on legal traditions focuses on the comparative macroeconomic effects of legal systems concentrating on efficiency alone and leaving distributive issues to taxation. However, the legal structure of a country also conditions the primary distribution of income and can have a comparative advantage as a distributive tool relative to taxation. We use cross-section and panel estimates to show that the level of income inequality in a country is indeed correlated with its legal system. By several measures of inequality, on average, common law countries are more unequal than civil law countries. We explain these results by the nature of the systems. The reduced regulation of common law countries limits their capacity to achieve social objectives such as combating income inequality.

• Item Type: MPRA Paper
• Language: English
• Keywords: Legal Origins ; Legal Systems ; Inequality ; Gini ; Top Incomes
• Subjects: D - Microeconomics > D3 - Distribution; K - Law and Economics > K0 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; P - Economic Systems > P5 - Comparative Economic Systems > P51 - Comparative Analysis of Economic Systems

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