Comparative law and economics is a growing area of interest in the interaction between law and economics, comparative law, comparative economics and comparative political science. It includes both strands of the more traditional literature, namely the role of legal families from comparative law, and the microeconomic analysis of legal rules from conventional law and economics.

Whether teaching a short seminar on comparative law and economics or including a few sessions on the subject in a semester-long course on comparative law, difficulties arise when one searches for a bibliography—this is true whether one is preparing a mandatory or suggested reading list for students. It is always a struggle to find a comprehensive and appropriate comparative law and economics reference list.

One possible way to introduce the subject to students is to assemble a collection of seminal articles on appropriate topics. There are a few difficulties in introducing students to the subject in this way. First, due to the multidisciplinary nature of comparative law and economics, the language is often inconsistent across articles. Second, some articles are difficult for an audience not very familiar with formal mathematical models or advanced econometrics. Third, in subject matter, there is a widespread lack of harmony; there is even a lack of consistency in the acknowledgment of different authors, topics and approaches in comparative law and economics.

The alternative approach is to look for a more comprehensive source that systematically provides an approachable overview of comparative law and economics. Mattei (1998) is still an excellent seminal reference, but this book largely predates the rise and dominance of the legal origins’ theory in the debate between and among scholars, policymakers and international organizations such as the World Bank. More recent readings include De Geest (2009) and Eisenberg and Ramello (2016). Both books present a wonderful collection of insightful and noteworthy articles in comparative law and economics, but they are neither organized nor intended as a short introduction to students and researchers. They do not serve as a comprehensive roadmap to a more provocative and ambitious syllabus.

There are useful methodological overviews such as the ones provided by Caterina (2012) and Faust (2019). As a leading scholar in law and economics, Ogus offers plenty of comparative law examples in his excellent and engaging paperback (Ogus 2006).

The last century has witnessed significant articulations and rearticulations of indigenismo and andinismo in Peru, as intellectuals and activists contemplate how to best define the heterogeneous cultures that have developed in the Andean region since the arrival of the first Europeans almost five hundred years ago, and how to best understand the role of Indigenous cultures in the national imaginary and in various modernizing political and social projects that have marked Peruvian history. While these discussions have been led principally by sociologists and anthropologists (and sometimes sociologists against anthropologists, as seen in the infamous roundtable on Todas las sangres in 1965), with key contributions by literary and cultural studies critics, certainly, I propose that Grupo Cultural Yuyachkani, which celebrated its 50th anniversary in 2021, has developed into one of the key theoretical voices on defining and locating lo andino—namely, Andean Indigenous-mestizo cultures, peoples, and epistemologies—in contemporary Peru through its methodical and meticulous development of a poetics, or perhaps more aptly a “theatrics,” of race.

The Yuyas, as they are affectionately known, began as a group of young actors with a mission to take politically engaged pedagogical theater to disenfranchised communities throughout Peru. The original seven actors, Augusto Casafranca, Amiel Cayo, Ana Correa, Débora Correa, Teresa Ralli, Miguel Rubio (artistic director), and Julian Vargas, formed what is now one of the longest continually operating and most important theater collectives in Latin America. True to its commitment to “think Peru theatrically” (Rubio 2003), a large part of Yuyachkani's corpus is dedicated to the human rights and social justice issues that affect the country, particularly Peru's marginalized rural Indigenous-mestizo communities and urban popular classes. Its role as a political and social commentator became particularly evident during Peru's internal armed conflict between Shining Path and Peruvian military forces (1980–2000), and many of the group's over thirty plays (and counting) are dedicated to human rights and memory work about this period. Yuyachkani earned the Peruvian National Human Rights Award in 2000 and was invited by the Peruvian Truth and Reconciliation Commission (2003) as one of the principal artistic collaborators in its transitional justice efforts. Yuyachkani is a major force in Latin American theater, and the actors have participated in countless festivals, led numerous workshops at universities and cultural cent-ers, and performed extensively throughout both North and South America over the collective's five decades.

Economic Diseases Caused by Regulation

Consequences of fragile stability

Achieving sustainable price stability is problematic without considering the causal links of prices with the entire financial system. The need to consider those links becomes increasingly evident after each financial and economic crisis. Low inflation, which is artificially achieved by increasing the bank rate, will be accompanied by high reserve requirement, restrained exchange rate, depletion of foreign exchange reserves and high interest rates for government bonds. In those conditions, the seemingly stable annual inflation is followed by unreasonably high real bank rate, seasonal and structural substantial price fluctuations, the decline in GDP growth rate, deterioration of its structure and a decrease in the growth of exports. Even with seemingly stable low inflation, those characteristics certainly are not reminiscent of financial stability, making the very process of ensuring price stability ineffective.

Under those conditions the penalty for artificially low inflation is high, and the risk of its sudden leap increases even from minor changes in the world economy. Paradoxically, low inflation, in that case, becomes very fragile. Extra-systemic price stability arises. Hence, the contradiction between price stability and financial stability may result in sudden price fluctuations, especially for the most sensitive prices of essential goods.

In transforming economies inflation below 2 percent or above 5 percent is usually accompanied by a significantly high real bank rate, which is more than 2 percent. Moreover, a high real bank rate may substantially push up the risk of uncontrollable inflationary processes. Those bounds represent estimated sensitivity thresholds for inflation.

Exiting the marked interval about the interconnected key economic indicators will stipulate the occurrence of the following economic diseases:

• 1. A decline in economic growth, deterioration of its structure;

• 2. Decrease in exports;

• 3. Reduction of foreign exchange reserves;

• 4. Growth of public debt, mostly external;

• 5. Inadequately low monetization ratio;

• 6. Seemingly stable exchange rate, which is not conducive to GDP growth or improvement of its structure.

The smaller the attainable interval for inflation, the more it contributes to economic predictability and development. Thus, it is better to have sustainable and predictable inflation between 2 percent and 5 percent, that is, an interval of no more than 3 percentage points, than to aim for inflation below 2 percent with a probability of a sudden leap in this indicator.

Historical scholarship since the 1960s has established that during the Great Depression the long-term unemployed were capable of great militancy, on a broad and sustained scale. Roy Rosenzweig, an expert on the subject, says—in what is likely a considerable understatement—that “easily two million jobless workers engaged in some form of activism at some time in the thirties.” Mark Naison's 1983 study Communists in Harlem during the Depression shows that the Communist Party was a major force in Harlem the entire decade, in fact in New York City as a whole. James Lorence's Organizing the Unemployed (1996) makes it equally clear that across Michigan, from Keweenaw County to Detroit, the jobless actively protested the indignities and hardships that were imposed on them. Late in the decade, the Workers Alliance (WA) was still a “dynamic force” in many counties, and by the spring of 1938 over 80 percent of Michigan's WPA workers were members of the United Auto Workers. Demonstration after demonstration in cities across the country—and Chicago in the first five years of the Depression had well over two thousand such—saw upward of ten or twenty thousand people clamor for action by political authorities, risking police brutality in order to force leaders of business and politics to remember the forgotten man.

At the same time, however, social historians since the 1960s have sometimes been at pains to deny that in these years the masses had much interest in radical ideologies. An image is painted of Americans that seems to attribute to them a sort of cultural inertia, political passivity, a stubborn clinging to individualism and the American political system, and a lack of “class consciousness.” Melvyn Dubofsky's 1980 paper “Not So ‘Turbulent Years’: A New Look at the 1930s,” for example, is a classic statement of this perspective. In explaining why (so he argues) “durable working-class radicalism” did not emerge in the Great Depression, Dubofsky invokes the supposed “inability of most workers and their leaders to conceive of an alternative to the values of marketplace capitalism, that is to create a working-class culture autonomous from that of the ruling class.” Workers did not become “a class fully aware of their role, power, and ability to replace the existing system with ‘a better, firmer, more just social order [than] the one to be torn down.’”

Many commentators during and after the 1930s were inclined to make sweeping negative generalizations about the long-term unemployed. They were seen as almost universally passive, apathetic, despairing, and atomized, something like an inert mass of lost souls. One observer in 1933 wrote, “The acquiescence of the unemployed […] is what impresses us. To be sure, there are mutterings and bursts of sullen resentment and an occasional riot, but the prevailing attitude up to the present time has been submissive.” Another declared baldly that “the unemployed man and his wife have no social life outside the family. The extent of the social isolation of the family is truly striking. This refers not only to formal club affiliations but also to informal social life.”

As we have seen, such interpretations are by no means wholly false. They have a kernel of truth, but they state it in a tendentious and exaggerated form. Some of the long-term unemployed did, of course, succumb to abject despair and even suicide, but most did not. In fact, there are historians who draw almost the opposite conclusions from those just quoted. Anthony Badger, for instance, insists that “what characterised the American workers’ response to unemployment was tough-minded realism. Such stoicism and resilience might militate against political radicalism but it did not signify self-blame, indifference, or hopeless despair.”

In this chapter, accordingly—and in later ones—we’ll consider Chicago's Depression-era unemployed from the perspective of their activity, unlike in the previous chapter. Because of what they had to endure, they were frequently compelled to adopt a courageous stance, for the sake of loved ones. In the tasks of survival and day-to-day living, the socially disadvantaged are, on both implicit and explicit levels, continually resisting, improvising, calculating, cooperating, and rationally using whatever means are available to take what they can get from a callous world. The struggle of living-while-poor is a class struggle—in fact a direct and immediate outgrowth of “the” class struggle, the conflict between elite and subordinate classes—and as such is essentially opposed to the dominant society.

The classical economics view is that that regulation pursues public interest when it corrects for market failures. Information asymmetry is the main market failure that applies to professional legal markets. Specifically, for most clients or consumers, professional legal services are credence goods. The explanation is typically the following: a standard consumer is less informed about the nature and quality of the service and must rely on the expertise of the professional lawyer in order to assess (the so-called agency function) and implement the adequate strategy (known as the service function). Under these conditions, the market for professional legal services will fail to produce the socially optimal quantity and quality of legal services. Some protection for the standard consumer of professional legal services is necessary to guarantee quality and mitigate inefficiencies. This protection of legal consumers frequently takes the form of regulation of the legal profession, that is, the supply side of the professional legal services market.

However, asymmetry of information between the demand and supply sides is not the only market failure that economists see in the market for professional legal services. The overall quality of the legal system is positively related to the quality of lawyers. The consequences of poor representation, for example, go beyond the direct client and generate serious negative externalities to the public. A poorly drafted will, for example, will likely have to be litigated, consuming judicial resources. Regulation is justified because the regulatory body will have more information and expertise at judging quality, thereby reducing the negative externality caused by bad lawyering. The converse is also true—regulation can create positive externalities by improving the quality of the justice system via the lawyers that staff and represent that system.

The nature and regulation of legal services limit competition in the market for professional legal services. Alongside asymmetry of information and negative externality, there is another source of potential deadweight loss—lack of perfect competition. In particular, lack of perfect competition is a market failure that is either intrinsic to the market for legal services or a regulation failure, a loss imposed by regulation. This is generally referred to as government failure in the public choice literature.

The Minimal Uncertainty Intervals of Economic Indicators

To have an unattainable exact forecast or an achievable forecast in the minimal interval?

The interval uncertainty of key economic indicators represents the infeasibility to pinpoint an economic indicator within the minimal uncertainty interval. The probability of the minimal interval may change, and the interval will have to be adjusted. The minimal uncertainty interval should not be equated to the confidence interval; the uncertainty interval is not the mean value of an indicator with a statistical estimate of the probability of its deviation.

The presented uncertainty interval should not be regarded as a purely statistical tool with which it is possible, as in other intervals, to estimate the probability of a particular parameter of the population. Economic indicators are always changing, and their parameters and distributions also change over time. Not to mention the substantial amount of noise generated by the markets. Considering the factor of heterogeneity of economic indicators and in most cases small samples, the exact calculation of probabilities or p-values of one or another indicator is meaningless.

All outcomes are possible in the uncertainty interval; their probability is indefinable; a point estimate and the mean are an artifice in the interval. The mean or the average often gives the illusion of stability. The concept of the average is inefficient; the key here is the minimal uncertainty interval.

The average value is usually uninformative. The information can be obtained with the uncertainty interval and, of course, with an estimate of the likelihood of serious repercussions when exiting a said interval. Even if some value is declared as an average, the likelihood of its fulfillment does not become higher or more preferable than other possible values within the interval. Indeed, this expression is appropriate here: do not jump off ledges in the dark if their average is a meter or three feet.

When inflation is expected to be between 2 and 5 percent, this does not mean that the likelihood of the average, which is 3.5 percent, will exceed 3 percent. For illustrative purposes, let's assume that the weather will change and the air temperature will drop by 4–6 degrees; this does not mean that the likelihood of 5 degrees is greater than 5.5 degrees. Moreover, the conse-quences of exiting the interval are quite different here.

The period 1924–1925 witnessed the publication of two novels in “La Novela Semanal,” a weekly collection of the newspaper El Universal Ilustrado: La resurrección de los ídolos by José Juan Tablada and a reissue of Los de abajo by Mariano Azuela. In the 1920s, El Universal became a journalistic forum, paradigmatic of the discursive machine that the Mexican Revolution set in motion after its armed phase. The goal was to find the node of inscription of the nomadic force triggered by the revolution after the fall of the Porfiriato and cipher its meaning within a horizon of confrontation over the symbolic capital of postrevolutionary nationhood. Los de abajo was destined to gain sudden fame; it became canonized as the foundational novel of the Mexican Revolution after a series of debates, which turned Azuela, a hardly known novelist until then, into the sine qua non writer of the revolution.

Unlike Los de abajo, and contrary to Tablada's expectations, La resurrección de los ídolos went down in history as an oddity, a minor achievement of Tablada's otherwise highly reputed trajectory as a former modernista and as a prominent avant-garde poet, a foremost connoisseur of Japanese art, who considered himself ambassador of Mexican modern culture in the United States. José Eduardo Serrato Córdova attributes this failure to Tablada's anachronistic and elitist perspective to politics and culture in this novel, which made him appear as the last nineteenth-century intellectual of the new century (2001, 57). Tablada did remain a closet Porfirian despite his ability to survive the vicissitudes of the revolution as the representative of José Vasconcelos, minister of education, in the city of New York. His repulsion toward revolutionary anomie is indisputable in the novel. Yet, such attitude was not necessarily outdated. It was shared by many intellectuals at the time, including Noriega Hope, the editor in chief (1920–25) of El Universal Ilustrado. The idea that the Indigenous masses engaged in revolutionary violence without knowing why was a shared assumption among the intellectual elites and became a salient motif in La inútil curiosidad (1923), a collection of short stories by Noriega Hope as well as in Los de abajo by Azuela.

The topic of the culturally and ethnically complex Latin American identity has always been of utmost importance in the field known as Latin American studies: in historical, social, and literary works. Moreover, a vast body of psychological research indicates that analyzing and understanding the experiences of individuals representing multiple cultural backgrounds are vital to analyzing and understanding the communities and societies they belong to. Studying life narratives of individuals and communities, whether in purely historical or literary context, enriches and enhances the understanding of pluricultural nations: the otherwise “compartmentalized” experiences or “unstable identities” get “woven” into the big picture of a given world region or nation. Moreover, analyzing the fusion of different ethnicities that gives rise to new cultural phenomena, new values, and new social quality expands the more traditional view of Latin American studies.

Furthermore, the cultural, social, and political relations between Latin America and Asia are a tricky and complex topic. If you google “Asia and Latin America,” you get almost 6 billion results. They address various issues related, among others, to business relations (strategic partnerships vs. competition, Latin American investments in Asia and vice versa and its social and political implications, like the growing importance of Asian-Latin American relations on the global level) and cultural and literary relations (connected to migration and cultural exchange), both from the historical point of view and in the context of shaping future relationships.

The Asian immigration to the Americas dates to the sixteenth century. The Asians participated in the Galeón de Manila trade with Spain and Portugal in the 1500s, and over the next centuries thousands of people from different Asian countries left their homes to find new life opportunities across the ocean and constituted an important labor force in the region. Nevertheless, commonly, and despite the historical and contemporary presence of the Asian communities, the multiculturalism and Latin American miscegenation have been mostly defined as the “mixture” and “cohabitation” of the European, autochthonous, and African substratum, frequently leaving aside the “Asian element,” either marginalizing it or treating it as a mere “curiosity.”

Black and Female

Nancy Morejón, born in Havana and publishing poetry since 1962 until date, is the black female poet par excellence in the Spanish Americas. Her work has been translated into many languages and analyzed in an already solid body of literary criticism, in which her “black” and gender qualities are emphasized. Morejón is the subject of special issues of professional journals such as Callaloo (2005) and the Revista Iberoamericana (2011), both edited by Juanamaría Cordones-Cook, among others. However, in addition to these studies, it is also important to pay attention to the political dimension of her poetry. Seen from a European viewpoint, for instance, it is striking that Morejón lives in a socialist country, because this political system is not particularly well-known for having focused on “black” problems. We don't know of any translation into Russian, German, Polish or other East European languages before 1989 of one of Morejón's famous poems, “Mujer negra” (Black Woman, 1975) pub-lished in the bimonthly Casa de las Américas. This poem is contemporary with black women's writing in the United States. The Nobel Prize winner Toni Morrison, after having published The Bluest Eyes (1970) and Sula (1974), had her breakthrough with the Song of Solomon (1977). And the enormous international success of the book and film The Color Purple (1982) by Alice Walker documented the growing interest in problems related to gender and color. So, Morejón's poem was at the forefront of the rise of African American female literature, except that she writes in Spanish.

On the other hand, Astrid Roemer, born in Paramaribo, Suriname, is Morejón's three-year junior and the outstanding “black” female writer in the Dutch language at this time. She received the P. C. Hooft Prize, the most important literary prize in the Netherlands, in 2016, and was awarded the Prize of the Dutch Language Union (Nederlandse Taalunie) for the Dutch-speaking countries in 2021. Roemer started to publish in Suriname at the beginning of the 1970s. After moving to the Netherlands, she became famous with Over de gekte van een vrouw. Een fragmentarische biografie (About the madness of a woman. A fragmentary biography, 1982), a cult book read in Feminist and Gender studies (Phaf 1985, 202).

The relationship between comparative law literature and economic scholarship on legal families is replete with remarkable ironies. The legal origins’ theory, as one will see in the following chapter, relies heavily on the classifications of legal families devised by comparative law scholars. Yet economists popularized the concept of legal families precisely when comparative lawyers began to abandon this landmark contribution of their own field.

a) Common-law and civil-law

Comparisons among foreign legal systems, whether casual or profound, have a long history—and so does the idea that English law is significantly different from the French and Roman law. The effort to extrapolate from differing legal systems and divide the world map into a handful of “legal families” based on the heritage and character of the underlying legal systems is far more recent. This approach is closely intertwined with the history of modern-day comparative law itself, a discipline whose birth, for most scholars, dates to about the early 1900s. However, reigning conceptions of legal families have varied over time, casting doubt on the systematic reliability and historicity of these categories.

The central importance of legal families as one of the main theoretical achievements of comparative law came in the 1960s due to the work of important comparative law scholars, including Konrad Zweigert and Hein Kötz. In 1969, these authors proposed a well-known classificatory, recognizing common-law and civil-law systems. They subdivided the civil-law family into three separate branches: the French, the German and the Scandinavian civil-law systems. The three civil-law families, together with the common-law, far-Eastern law, Islamic law and Hindu law families, defined the main “styles” of legal systems around the globe. The scheme advanced by Zweigert and Kötz was widely popular and came to be the substantial basis for the literature on legal families. This categorization was, remarkably, of relatively minor importance in their treatise, whose primary purpose was to redefine the study of comparative law in functional terms. This intellectual ambition was far different from the legal families’ project.

The rapidly expanding legal origins’ theory (see Chapter 4) in the late 1990s related conventional legal-family classifications to major economic variables and relevant puzzles in the development literature (e.g., why some countries grow successfully and others do not, why there is a trap for middle-income countries, which legal institutions are important in explaining successful and unsuccessful reforms).

The Systematization of Economic Indicators

Conditions for stable economic development

Target indicators

Systematization of key indicators with the detection of their uncertainty intervals is a necessary condition for an efficient economic policy. Key indicators constitute nodes that link economic processes into one system. Links of key indicators accumulate other connections of economic processes and present them in a summarized form. The U.S. government estimates around 45,000 economic variables, and nongovernmental sources keep track of at least four million data. In this case, many of the formulated variables will be of minor importance.

Thus, it is necessary to present the nodes, which summarize other variables to obtain tolerable results in the study of economic causations. This system approach should be carried out using a combination of economic objectives, normative constraints and the basic principles of regulation in the economy.

The system approach and a precise mating of key economic indicators are exceptionally important for economic development. Unfortunately, there are numerous examples of inconsistencies. For example, adherence to the principle of price stability often turns into a tough, inflexible monetary policy. Not enough attention is often paid to its feedback, that is, the explicit impact on GDP, structure of GDP, exports and employment.

In the most concentrated form, the key indicators are given and legislated in the so-called Magic square. In 1967, Germany adopted the Act to Promote Economic Stability and Growth, which formulated the basic principles of economic policy to avoid a subjective approach. Those principles for the key indicators, which are required as the basis for the preparation of budgets and financial planning, are as follows: steady economic growth, balanced foreign trade, a high level of employment and price stability. The “Magic square” represents the key indicators of an economy in a concentrated form. They must be considered in a single system. An attempt to single out a sole indicator with no regard to its causations to other key indicators will not yield a quality result, especially in the long run.

Goodhart's law may snap into action if the monetary policy is represented by a single indicator. Once a government or a central bank starts using a sole indicator, its significance may not match the economic reality.

The role of uncertainty has increased in the economy. The economy shows increased volatility; the frequency of changing situations and policies can rapidly change the economic landscape, thus giving them a new quality.

An economy does not develop along with programmed principles. The economic, social and political situations and the market, as well as international economic relationships, are variable. Economic regulation oftentimes requires substantial adjustments demanding readiness, which can be achieved using the intervals of economic indicators.

In a transforming economy, the issue of uncertainty is even more urgent, while the aftermath of unpredictability and an unfeasibility of precision forecasting the economic processes may be even more sensitive. The transforming economies are the states staging the process of transforming the command economy into the market economy. The economic regulation constantly changes in those countries. This is reflected in the key economic indicators characterizing the country's development. The level of uncertainty is higher, especially in transforming economies, and the likelihood of forecast fulfillment is lower. Uncertainty intervals for forecasting are wider in those countries as they have more sensitivity thresholds, which are the critical bounds of key economic indicators. The crossing of those thresholds can cause even greater changes than in the developed countries, which have stronger homeostasis of the economic system. For instance, the drop of GDP in transforming economies after the crisis by far exceeds the drop of GDP in developed countries.

Under those conditions, it is rather unproductive to compile static equations to be used in studying the economic processes. Moreover, the number of sensitivity thresholds increases, which changes the elasticity of economic indicators. Besides, the same value of an indicator, say, inflation or an exchange rate, may correspond to very different values of other economic indicators such as GDP, its structure and exports. Thus, those causal links are ambiguous; hence, the forecasts compiled upon unambiguous links will be inadequate for describing economic prospects.

The principles of the economy are mostly identical; however, they are manifested with differing intensities under different conditions and times. Economic diseases, having a universal character, show themselves distinctly in transforming economies. It is especially a small ship coming to be in the process of renovation in heavy seas that encounters quite some unexpected situations.