An Economic Perspective

Legal institutions as exogenous variable: measuring economic growth

Measuring growth is the primary task of the economic historian.“ The eco­nomic historian's task extends to ‘investigating the institutional developments that made it possible to reach a certain level of... capital accumulation': ‘[r]endering the complexity of this evolution is the key to making sense of the process of growth'.“ It is the legal historian's primary task to render the com­plexity of legal evolution: this task has been performed for pignus and hypoth­eca in this book. For investigating how legal institutions may have contributed to economic growth, legal historians are less well equipped. Nevertheless, here also they can contribute to the economic debate. One possible approach in order to measure—in the absence of sufficient statistical data—per capita growth is: ‘to identify the existence in antiquity of drivers of economic growth, to demonstrate that the conditions existed which would have made growth possible'.“ Among the relevant conditions are ‘institutional attitudes and stimuli' as appear from ‘documentary and epigraphic evidence'.“ I would think that the existence of a versatile law of secured credit, as appears from the Sulpicii archive and can be reconstructed from the Corpus iuris civilis, would count among the conditions which would have made economic growth possible.

In section 12.3 secured credit will be analysed from an economic perspec­tive, not because I regard the drive to minimize transaction costs as the only evolutionary force in law,^{[1320] [1321] [1322] [1323] [1324] but, rather, in order to review the adaptedness of the Roman law of real security to an economic environment in which credit played a significant role. Law and Economics has provided valuable insights into the role of the law of secured credit in modern economies. In my contri­bution to Roman Law and Economics, I have concluded that the economic functions of security identified in economic analyses of secured credit (e.g., risk reduction, reduction of monitoring costs, depersonalizing credit relation­ships) were also performed by real security in the Roman economy?6 There is, therefore, enough similarity with the role of the law of secured credit in the Roman empire in order to apply the findings of Law and Economics to it.}

Economic considerations of the jurists

Gordley argues that Law and Economics is based on a ‘fallacy' as it assumes that because a given rule leads to a certain result, and that result furthers someone's interest, the rule was made to promote that interest (efficiency). But the ‘rules to which they refer are ancient and framed by jurists who could not possibly have these purposes in mind’?⁷ Of course, it is true that the Roman jurists did not ponder the efficiency of a legal rule, as understood by modern Law and Economics. There can be no doubt, however, that the Roman jurists did take (what we call) economic considerations into account when designing or supporting new legal rules?⁸ They usually failed to dis­close them, or to describe them in a manner which is accessible to us?⁹ It is extremely difficult to imagine that legal fields such as the Roman law of con­tracts, the liability of masters for contracts by their slaves (actiones adjecticiae qualitatis), inheritance law, and the law of (personal and real) security were developed by the jurists without regard to the needs of the Roman economy and society in general.^{[1325] [1326] [1327] [1328] Gordley's critique would be justified if the validity of economic analyses of legal change depended on the assumption that, in order for a rule to enhance efficiency, the jurists framing this rule must have intended this. But this assumption is clearly wrong. Just as certain legal rules which were intended to enhance efficiency may fail to achieve this, other rules may turn out to be efficient as an unintended side effect?1 This useful effect, although not intended, may have contributed to the survival of the rules con- cerned.22 This is precisely what is claimed by evolutionary theories of legal and economic change.}

There can be no doubt that the Roman jurists did take economic consider­ations into account when dealing with pignus and hypotheca. It is true, as Schulz observed, that the Roman jurists did not formulate questions like ‘What is the economic function of the pledge?³ Pellecchi has recently observed that the Roman jurists did not reach their conclusions on the basis of assessments which were conditioned by their economic impact?⁴ The ‘horizon' of the jurists was essentially defined by the logical structure (legal dogmatics) of the various institutions which the ‘polymorphous nature' of the conventio pignoris allowed to bring into play?⁵ In those few cases where one succeeded in overcoming this fundamental logical structure, this did not hap­pen with the intention to steer the market for secured credit in one or another direction, but simply in order to safeguard, in any case, the choices made by the parties (party autonomy)?⁶ On this point, I largely but not entirely agree with Pellecchi's (otherwise convincing) account of the economic dimensions of the Roman law of real security. The Roman jurists were frequently prepared to go a long way in order to respect party autonomy and accommodate new variants of pignus and hypotheca into the system of Roman private law?⁷ The hypotheca granted nuda conventione, the transformation of the actio Serviana from an actio in rem to an actio in personam (pignus nominis and antichresis), the ius offerendi et succedendi and its extension to novation and the general pledge (which most modern civil law jurisdictions still fail to recognize); these are all quite radical innovations, which greatly enhanced the economic adaptedness of the right of pledge. The jurists' main concern, it is true, would normally not be to find the most economically efficient solution, but to find a juridically consistent solution for a new problem.^[1329] The adaptation of an existing form of action by the praetor to a new situation would involve this kind of consistency?^[1330] But this does not contradict the fact that economic con­siderations avant la lettre did influence the evolution of Roman law.