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Legal institutionalism: Capitalism and the constitutive role of law

Accepted version
Peer-reviewed

Repository DOI


Type

Article

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Authors

Gindis, D 
Hodgson, GM 
Huang, K 
Pistor, K 

Abstract

Social scientists have paid insufficient attention to the role of law in constituting the economic institutions of capitalism. Part of this neglect emanates for inadequate conceptions of the nature of law itself. Spontaneous conceptions of law and property rights that downplay the role of the state are criticized here, because they typically assume relatively small numbers of agents and underplay the complexity and uncertainty in developed capitalist systems. In developed capitalist economies, law is sustained through interaction between private agents, courts and the legislative apparatus. Law is also a key institution for overcoming contracting uncertainties. It is furthermore a part of the power structure of society, and a major means by which power is exercised. This argument is illustrated by considering institutions such as property and the firm. Complex systems of law have played a crucial role in capitalist development and are also vital for developing economies.

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Journal Title

Journal of Comparative Economics

Conference Name

Journal ISSN

0147-5967
1095-7227

Volume Title

45

Publisher

Elsevier
Sponsorship
ESRC (ES/J012491/1)
We thank the Economic and Social Research Council for financial support (ESRC grant ES/J012491/1, ‘Law, Development and Finance in Rising Powers’).