Beliefs, Legal Origins and the Deep Roots of Trust Working Paper

 For this working paper by Fabian Wahl I have mixed feelings. While the title did grab my attention: "Why it Matters What People Think: Beliefs, Legal Origins and the Deep Roots of Trust" and the overall concept is appealing, at the end of it I have a nagging feeling that something is missing. Below is the abstract:

   "This paper deals with the direction of causality between culture and formal institutions. It does so by analysing the causal relationship between legal origins (institutions) and trust (culture). It empirically investigates the deep historical roots of trust by constructing a proxy for the persistent component of trust. By making use of these persistent trust scores, and drawing on information about the exogenous or endogenous introduction of legal origins, it assesses whether trust is endogenous or exogenous to institutions or whether there is a two-way causality between both variables as it is suggested by recent theoretical studies. Here, it provides evidence that: (i) countries for which legal origins are endogenous developed different legal institutions depending on their persistent (ex-ante) trust values; and (ii) that the effects of an exogenous introduction of legal origins (through e.g. colonization) vary depending on persistent trust levels. In consequence, it concludes that there is a complex two-way causality between trust and legal origins. This result has important policy consequences, since it means that institutional change can be successful in the long-run only if it takes into account the already existing culture in the affected countries."

The finding that introducing civil law in countries with low levels of trust may be more positive than introducing common law is quite interesting and may shape some approaches regarding constitution drafting and rule of law programming. The paper also highlights that institutional reforms can be successful in the long-run if they take into account already existing norms and values. It seems quite obvious... until we look around and see attempts of copy-paste institutions from best practice models. There should be more second-best advocacy around! Then again, in the long-run we are all dead, including the auditors and evaluators.

However, I find the paper falling short in a couple of instances:

- historical trust measurement. The author does acknowledge the difficulty of finding variables that are exogenous of the legal framework and not path-dependent historical development processes. And yet I find the indicators unconvincing, although the author has cleverly included the word persistent, that allows for a then-and-now 'comparison'. I would say that trust is very much path-dependent by definition, without prior experience is quite hard to trust something or somebody. Moreover, European history (more later) is an ebb and flow of degrees of trust, as the many uprisings, revolutions, revolts, migrations, secessions and other acts of disagreement show. Intertemporarility is a tricky thing to deal with.

- Eurocentric. Legal systems not-sourced from Europe are ignored, maybe for a good reason, but I could not find it. Sizable parts of the world population actually live by other systems (customary, Islamic), although nominally under either civil or common law. Probably many customary/traditional legal frameworks could be understood as common law but yet this point seems not to be addressed properly. This is specially problematic if we are to propose policy approaches in developing countries where multiple legal systems may coexist (and the official one is not necessarily the strongest).

Too econometric/statistical for my liking (taking into account I am algorithmically challenged, my liking threshold is very low), I was expecting a more comparative/qualitative approach (it appeared in the Social & Political Philosophy eJournal after all!!!) but it may give the readers some ideas.