Legal Traditions as Economic Borders

This article makes two main claims: A state’s legal tradition is embedded into its domestic institution in each issue area and a state that has a common/civil law-type domestic institution in a certain issue area (not necessarily a state that has common/civil law tradition) prefers common/civil law-type international agreements in the same issue area. The consequence of these two claims is that states’ legal tradition is often one of the primary sources of international cooperation, especially issue-specific cooperation. This in turn means that the difference in legal traditions is often a potential factor that would induce economic disintegration. By conducting theoretical and empirical investigations of three issue areas covered by free trade agreements (i.e., trade in goods, trade in services, and investment), this article demonstrates that different modes of governance are preferred by civil and common law states domestically and internationally, and that the difference in domestic systems partially explains participation and non-participation in international agreements.