Columbia Law's Milhaupt Delivers Lecture at Brazil Senate
Columbia Law?s Milhaupt Delivers Lecture at Brazil?s Senate
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James O’Neill
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June 1, 2007 - Columbia Law Professor Curtis J. Milhaupt recently lectured before Brazil’s Federal Senate and was keynote speaker at the 11th annual meeting of the Latin American and Caribbean Law and Economics Association in Brasilia where he discussed the impact of legal systems on economic growth around the world.
The talks stemmed from a forthcoming book by Milhaupt and Columbia Law School Professor Katharina Pistor that challenges popular assumptions about which legal systems produce the most robust economic growth – assumptions that drive policy decisions by such influential institutions as the World Bank.
The book, due out in 2008, looks at a series of high profile corporate crises over the past six years, including the Enron debacle. It also looks at recent economic growth in China, Japan, South Korea, and several other countries, all of which have very different legal structures.
Milhaupt said the common assumption, which drives much current economic scholarship, is that countries with common law systems, such as the United States, provide higher quality legal protections – particularly in the area of property rights - than countries with systems of civil law. As a result, the thinking goes, common law systems encourage more rapid economic growth.
But recent scandals such as Enron have shaken confidence in the system and prompted calls for change. In addition, many of the countries enjoying recent economic growth have not had legal systems similar to the United States – China being a striking example.
``It is easy to understand why so many economists and World Bank reformers have been attracted to a simple view of law’s relationship to a liberal market economy,’’ Milhaupt and Pistor write in a draft of the introduction to their book. ``It is clean and straightforward. It depicts law as a kind of technology that can be inserted in the proper places – and imported from abroad when necessary – to accomplish an important task.’’
``On the other hand,’’ they continue, ``many countries have achieved remarkable economic growth with legal systems that don’t live up to the canonical rule of law ideal.’’
That’s potentially limiting for countries seeking to make legal changes to help their economies, Milhaupt said in an interview in his Columbia Law School office. ``It’s leading to a poverty of imagination in how countries can seek legal solutions to their economic problems,’’ he said. ``There’s not only one legal path to economic success.’’
He said the Brazilian Senate was interested to hear what he and other speakers at the conference had to say, because the country can benefit from taking a more analytical approach to the consequence of laws and legislation on market actors. ``They need to attract foreign investment and improve the quality of their domestic institutions,’’ he said.
The book, to be published by the University of Chicago Press, is called Law and Capitalism: What Corporate Crises Reveal About Legal Systems and Economic Development Around the World.
Milhaupt, 45, the Fuyo Professor of Law and director of the Center for Japanese Legal Studies, joined the Columbia Law School faculty in 1999. His principal areas of research include Japanese law, law and economics and the relationship between legal institutions and economic growth. He earned his bachelor’s degree from the University of Notre Dame in 1984 and his juris doctor degree from Columbia Law School in 1989. As a law student, he was editor of Columbia Law Review.
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