Legal Traditions and Economic Performances: Theory and Evidence.

A key feature of a legal system is the set of institutions used to aggregate the citizens\u2019 preferences overthe harshness of punishment, i.e., the legal tradition. While under common law appellate judges\u2019 biasesoffset one another at the cost of volatility of the law, under civil law the legislator chooses a certain legalrule that is biased only when he favors special interests, i.e., when preferences are sufficiently hetero-geneous and/or the political process is sufficiently inefficient. Hence, common law can be selected onlyunder this last scenario. This prediction is consistent with a novel dataset on the lawmaking and adjudi-cation institutions in place at independence and in 2000 in 155 transplants, many of which reformed thetransplanted legal tradition