I am trying to avoid writing about Brexit, but somehow cannot help myself. But I promise a rather unique approach today – that of an economist with interest in comparative legal studies. In the early part of my research career I co-authored
several papers in the law and finance literature (together with Asli Demirguc-Kunt and Ross Levine), a literature that shows a critical difference in (i) how legal systems have developed over the centuries
across different legal “families” and (ii) how this legal system development has influenced the development of the financial system. A headline finding is that Common Law countries (US, UK and former British colonies) have more developed financial
systems than Civil Law countries (pretty much everyone else) controlling for other factors. The critical historical difference between Common and Civil Law lies in the role of the judiciary and the flexibility and adaptability of the legal system. One critical
difference in the historic development of the UK and France (two mother countries of their respective legal tradition) was the role of the judiciary in the British and French revolutions in the 17th and 18th centuries, respectively. In
short, the judiciary was on the winning side in the conflict between Parliament and King in the UK and on the losing side in the conflict between ancien regime and revolutionaries in France. Siding with parliament over the king (under the motive Lex Rex)
helped establish the independence and ultimately supremacy of the judiciary in the UK (unlike in France and other French Civil Code countries where the judiciary has a much weaker role among the different branches of government). Another critical difference
is the role of jurisprudence (past decisions) and willingness and ability of Common Law judges to adapt legal decisions to circumstances, including looking beyond form to intention.