Gerald W . Scully Law , Liberty and Economic Growtli Introductíon Every society has a legal system . Broadly , legal systems may be classifíed into three types : common law , civil law and socialist law . Other legal traditions influence these systems : for example , African tribal law , Oriental law . Hindú law and Muslim law . Among these only Muslim law is suffíciently influential and widespread to be addressed in this study . ' The grand issue in the structuring of a legal system is whether law should be based on common , fairly applied rules or on the will of the ruler . . The debate over " rule of law " versus " rule of men " is with US as much today as it was in the distant past . ^ In the Institutes of Justinian ( 533 A . D .), this sharp dichotomy of views on justice , law and the rights of man was recognized . Translating from the Latin : " Is justice a constant and perpetual aim granting everyone his own rights , or is that which is pleasing to the person in power [ that ] has the forcé of law ?" is Earlier studies have shown that there a positive relationship between various measures of liberty and economic growth . ^ The issue we examine here is the extent to which the characteristics of legal systems influence liberty . Based on a survey of legal systems in 167 it countries , we conclude that the degree of individual freedom is greater under common law than under civil law and that freedom under Marxist-Leninist law and Islamic law is less than under civil law ."* Three Types of Legal Systems The legal systems of the West , its former colonies and many non-colonized countries are subdivided into two major Gerald W . Scully is a Sénior Fellow of the National Canter for Policy Analysis , and a professor of economics in the School of Management , University of Texas at Dallas . His articles have appeared in the American Economic Review , the Journal of PoUtical Economy , the Journal of Law and Economics , Public Choice , and other scholarly journals . His most recent book Is The Market Structure of Sports . This article was originally published as NCPA Policy Report 189 ( December 1994 ), and is reprinted by permission of The National Center for Policy Analysis . 12655 N . Central Expressway , Suíte 720 , Dallas , Texas ( USA ) 75243 , ( 214 ) 386-6272 . Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bilí before Congress . Laissez-Faire 44

I ) categories : those derived from Román law plus codified statutes , and those derived from English common law . A third legal system , Marxist-Leninist law , has also been important in the 20th century , although it is being gradual ly dismantled in many formerly socialist countries . These three legal systems can be further characterized by religious influence ( Muslim or non-Muslim ) and by whether or not an independent judiciary exists . [ See Table I .] Let's briefly review these systems . Civil Law . Codified law govems non-English-speaking Europeans , their former colonies and many historically independent non-European countries . Among the latter , the Germán civil code was popular in Asia and adopted by a number of nations in the late 19th and early 20th centuries . More than half of the 167 countries in the sample analyzed in this study have a civil law system . Such law has a long history , with roots traceable to 450 B . C ., the date of the Twelve Tablets of Rome . Román law reached coherence in its first codification under Justinian , in 533 A . D . Common Law Civil Law TABLE Types of Legal Systems ( number of countries Rule of Law Independent Judiciary Muslim Non-Muslim No Rule of Law 6 9 39 11 32 51 Socialist 19 Total 17 41 109 In contrast to common law , which aróse spontaneously and evolves continuously , codified law emerged discretely . The Justinian Code nullified all prior law in the interest of preserving the " purity " of Román law . After the code was prepared , the use of any other commentaries was forbidden . Similarly , the Code Napoleón ( 1804 ) nullified prior law in the interest of the new bourgeois and revolutionary order . French law derives its validity not from prior legal tradition but from the act of codification . Under such a legal system , the legislature has a monopoly on the creation of law and individual rights . The protection of rights in a legal regime in which those who govem , even if they are of good will , have the power to grant , deny or modify rights typically is weaker than in a legal system in which the individual stands equal to the State before an independent judiciary . The separation of powers doctrine exists in civil law countries . But judicial independence is much less meaningful . Judgeships in pre-Revolutionary France were prívate property . Montesquieu inherited , held for a decade and then sold a judgeship . The thrust of codified law has been to make it as " judge-proof as possible . The Code Napoleón contains 2 , 281 articles . Frederick the Great's distaste for judicial latitude was so great that the Prussian Landrecht of 1794 contains some 1 6 , 000 provisions . Completeness and coherence , which give a legal system certainty , are illusions in a codified system of law . Human inventiveness erodes the legislative will expressed in the code . Ultimately , someone must interpret the code and fill in the gaps . France , followed by Italy and other nations , was inundated by requests for legislative ( political ) interpretation of Laissez-Faire 45

the code and created the Tribunal of Cassation to quash incorrect court interpretations . The tribunal , a legislative body , evolved into the Supreme Court of Cassation , a judicial entity , whose fiínction is to divine legislative intent behind statutes . Codifíed law is only part of the legal system in countries foUowing continental legal practices . Commerce , patents , copyrights , bankruptcy , insurance and other branches of law were omitted from the early codes . In fact , continental law is a hodgepodge of prívate law ( civil and commercial ) and public law ( administrative and constitutional ), each with its own courts , procedures and tribunal hierarchies . Disputes with the State are heard in administrative courts , where those who govem and administer judge the ir own conduct . In France , the review of the legality of an administrative act is the Council of State , an organ first established to advise monarchs . In civil law traditions , statutes are not subject to independent judicial review . What guáranteos individual rights in such political Systems ? Constitutions and the good will of the legislature are supposed to do so . Yet constitutions vary in the strength of their limitation on legislative power , and there is no provisión for enforcing the limitation . Unlike the United States where , since Marbury v . Madison , the review of legislation is a judicial prerogative , constitutional review in civil law countries may be a non-judicial process . In France , constitutional questions are settled by the Constitutional Council , a body composed of the former presidents of France and members chosen by the French president , the president of the Chamber of Deputies and the president of the Senate . While the authority for constitutional review rests differently in other civil law countries , the constraints on legislative power are much weaker than where constitutional questions are a judicial prerogative . Ultimately , in civil law countries liberty is at the sufferance of the legislature . Common Law . Common law govems the United Kingdom and its former colonies . About a third of the countries in the sample analyzed have adopted the English common law tradition that can be traced to the Norman conquest of 1066 A . D . and a case casuistry beginning with the Year Books in the 13th century . One hundred fifty years of tyranny followed the Battle of Hastings . The Normans imposed and enforced a truculent penal code on the Saxons to guard Norman privileges . Tax coUections on behalf of King John brought the English countryside to penury . Norman rule was broken when John was forced to sign the Magna Carta . Thomas Macaulay dates the English nation from the events at Runnymede in 1215 . He wrote in History ofEnglcoíd : Then it was that the great English people was formed , that the national character hegan to exhibit those peculiarities which it has ever since retained , and that our fathers became emphatically islanders ; islanders not merely in a geographical position , but in their politics , their feelings , and their manners .... Then it was that the House of Commons , the archetype of all the representative assemblies which now meet , either in the Oíd or in the New World , held its first sittings . Then it was that the common law rose to the dignity of a science , and rapidly Laissez-Faire 46

became a not unworthy rival of the imperialjurisprudence . What features of the common law promote individual freedom ? Equal protection and equal status of the litigants and strict judicial independence limit the coercive power of the state . Under common law , the people's interest is derivative from that of the harmed individual and , by extensión , the individual's family , peers and society as a whole . Judicial proceedings are accusatory . ( Until modem times , the office of prosecutor did not exist in England ; the state hired a lawyer to represent the people's interest , against the defendant , who also hired a lawyer .) Trial by jury is guaranteed in civil as well as criminal proceedings . and public . Triáis are open Under codifíed systems , by contrast , legal proceedings are inquisitional , partially secret , multi-stage affairs . Those charged with crimes or infractions face the terrible power of the state , not a judge refereeing a contest between the accuser and the accused . Independence of the judiciary implies more in common-law countries than the separation of powers doctrine implies elsewhere . Common law is broader in scope than civil law . Civil law is confmed to the range of legal subjects of the first three books of the Institutes of Justinian ( i . e ., the law of persons , family , inheritance , torts , property , contracts and unjust enrichment ). By contrast , what is lawful under common law rests entirely with the judiciary , whose views evolve slowly and are based on the principie of strict adherence to precedent { stare decisis ). Where the British state chooses to intervene by statute ( e . g ., child labor laws , city planning and so on ), a tradition of casuistry and precedent tends to result in the statutes being more narrowly construed than on the continent . The British have been disinclined to overthrow 700 years of legal wisdom for a modem , if popular , visión . This evolutionary character of the common law protects and nurtures individual freedoms . How Dífferent Is Common Law From Civil Law ? Some scholars assert that the differences between these legal systems and their implication for human freedom are more apparent than real , since they mainly share the Christian religión , constitutional govemment and capitalist , prívate enterprise economic systems . ' this view , the rule of law is such a common cause of concern under both systems that other institutional differences are more curious than meaningfiíl . In After all , one is as free in developed countries with a common law tradition as in developed countries with a civil law tradition . Perhaps ! But three concems about personal liberty are troubling , particularly in Third World nations without a tradition ofjudge-made law . First , since the state is the source of all law , individual rights rest ultimately and convincingly with the state ( albeit through a representative legislature in the West ). Law by legislation can weaken individual rights in several respects . ( 1 ) The electoral process requires that politicians be responsive to the popular will . The time horizon of the popular will and those who represent it often is short and respect for individual rights often Laissez-Faire 47