Labour Regulation, Corporate Governance and Legal Origin: A Case of Institutional Complementarity?

We explore the finding of La Porta et al. that differences in "legal origin" account for part of cross-national diversity in labour regulation and corporate governance. We suggest that the finding needs a better historical grounding and that a mechanism which might explain it has not been adequately spelled out. In search of an explanation we focus on the role of complementarities between legal and economic institutions, and in particular the part played by the distinctive "legal cultures" of the common law and civil law in setting national systems on separate pathways to economic development.