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Law and inequality: A comparative approach to the distributive implications of legal systems

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  • Barriola, Illan
  • Deffains, Bruno
  • Musy, Olivier

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, a country’s legal structure also conditions the primary distribution of income and may have a comparative advantage over taxation as a distributive instrument. We use cross-section and panel estimates to show that the level of income inequality in a country is correlated with its legal system. By several measures of inequality, common law countries are on average more unequal than civil law countries. We explain these results by the nature of the systems. The looser regulation in common law countries limits their capacity to achieve social objectives such as combating income inequality.

Suggested Citation

  • Barriola, Illan & Deffains, Bruno & Musy, Olivier, 2023. "Law and inequality: A comparative approach to the distributive implications of legal systems," International Review of Law and Economics, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:irlaec:v:75:y:2023:i:c:s0144818823000170
    DOI: 10.1016/j.irle.2023.106139
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    More about this item

    Keywords

    Legal origins; Legal systems; Inequality; Gini; Top incomes;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K15 - Law and Economics - - Basic Areas of Law - - - Civil Law; Common Law
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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