DP16565 The impact of common law on the volume of legal services: An international study

Author(s): Enzo Dia, Jacques Melitz
Publication Date: September 2021
Keyword(s): civil law, Common law, Legal services, rent-seeking, Trade openness
JEL(s):
Programme Areas: Public Economics, Financial Economics, International Macroeconomics and Finance
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16565

We show that the heavy use of legal services relative to output in the US is not a peculiarity of the country but applies to common law countries in general. It stems largely from better ability to contract and easier access to justice. Yet in close association, common law also offers lawyers potentially more room for rent-¬seeking than civil law. Thereby the costs could outweigh the benefits. Both real GDP per capita and openness emerge as further factors making room for lawyers.