Social capital and procedural formalism

ABSTRACT

Differences in the extent of formalism of civil proceedings between common and civil law countries have expanded between 1950 and 2000. We study the role of social capital in this divergence using data on up to 35 countries. We find that higher-trust societies, and those that are less tolerant of opportunistic behaviours, were more likely to reduce the degree of procedural formalism over time, thus making litigation a more efficient means of seeking administration of justice. This result suggests that lowering of formalism may reflect a cultural bias for less formal dispute resolution among parties in high social capital societies.

KEYWORDS:

• Procedural formalism
• trust
• social capital
• opportunism

JEL CLASSIFICATION:

• K20
• K41
• Z18

Acknowledgement

We thank the anonymous referees for their helpful comments and Nicholas Moellman for assistance with dataset preparation. All errors remain our own.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Similarly, Bergh and Bjornskøv (2011) argue that trust facilitates the creation of universal welfare state because bureaucracies and societies anticipate less tax cheating and public good free riding, supporting their fiscal sustainability.

² We compute these variables consistent with Landier et al. (2008).