Lawyers and Politicians: The Impact of Organized Legal Professions on Institutional Reforms

Abstract

Spurred by the observation that the organized legal professions have been central in institutional development in countries with the highest quality institutions, we develop a model that identifies the link between the role of organized professions and the quality of institutional reform. Professional review of interest-group reform proposals solves informational problems when interest groups know the quality of reform proposals better than the government even though the only direct effect of the organized profession is the delay that is intrinsic in opening up reform proposals to general debate. Focusing on the incentives of politicians, the model predicts how the role of the organized legal profession varies with democracy and political stability, showing that democracy, political stability, and professional power are substitutes. The model's applicability is examined by comparing its predictions to a varied array of facts. The model predicts that organized professions might be used by autocrats, as for example in the USSR, and shows why the role of legal professions might be weaker in early post-communist transition. The predictions are consistent with the role played by organizations of lawyers in 1688 in England and 1789 in France, and therefore why these two revolutions had such different consequences for the rule of law. The model offers an explanation of why and when civil law and common law systems differ, suggesting a reconciliation of divergent results on economies with different legal origins.

Keywords: Organized professions, legal profession, institutional reform, interest groups, civil society, civil law and common law, colonies, Soviet Union, Louis XIV, glorious revolution

JEL Classification: D72, D82, H10, K40, N40, P51