by Daniel Berkowitz and Karen B. Clay. Princeton, New Jersey: Princeton University Press, 2011. 240pp. Cloth $39.50. ISBN: 9780691136042.
Reviewed by Kevin R. C. Gutzman, Department of History & Non-Western Cultures, Western Connecticut State University. E-mail: gutzmank [at] wcsu.edu.
What causes income disparities within and among societies?, this study asks. It then proceeds to analyze several potential answers to the question.
Daniel Berkowitz and Karen B. Clay are both economists. Although their study is essentially a historical one, it is not narrative. Rather, each chapter considers a postulate concerning the course of state development in America on the basis of various historical data. Of 201 pages in the body of the book, 14 are devoted to end-of-chapter appendices and another 71 are given over to charts and graphs. Thus, the book’s actual text is a rather scanty 116 pages. Substantial meat is packed into those few pages.
Berkowitz and Clay say early on that, “The primary goal of this book … is to understand political and legal institutions,” because they assume that such institutions drive societies’ prosperity or poverty (pp.3, 5). Particular factors that they consider are levels of political competition and judicial independence. Since levels of income are persistent, they posit that “conditions early in a state’s history may have played a formative role in shaping political and legal institutions.” Ultimately, they push their inquiry back as far as possible: to various environmental factors and to the legal traditions from which each state’s government descended.
So, the authors investigate the extent to which weather patterns and proximity to water transportation had ongoing effects upon states’ relative wealth. Perhaps surprisingly, they find both that employment homogeneity of the elite was negatively correlated with societal wealth and that the elite’s wealth had no consistent relationship to the wealth of a society (p.9). These effects are noted even when data are controlled for the existence of slavery, although that control does reduce the effects somewhat.
One novel element of the book is its classification of states according to whether they ever were civil-law jurisdictions. It turns out that the thirteen that were – the eight states on America’s southern periphery from California to Florida, plus Arkansas, Missouri, Illinois, Indiana, and Michigan – continue to bear distinguishing characteristics from the states that always had common-law systems (p.10). This is highly counter-intuitive, as some of those jurisdictions had civil law only very briefly and long ago. Yet, Berkowitz and Clay establish a clear correlation: state governments of the civil-law states have always had more dominant legislatures and weaker judiciaries than the other states. This relative weakness of judiciaries has manifested, and continues to manifest, itself in numerous ways. Other scholars, the authors assert, have assumed that the [*138] residue of the civil-law culture faded away when that law was displaced. They insist that this assumption was mistaken (p.14).
The level of political competition in a state, they show, has also long been correlated with the degree of subordination of courts to legislature. Apparently dominant parties opt for dominated courts, while when the parties are more competitive, they prefer independent courts. The authors say that persistence results from the difficulty of making formal changes to written constitutions, so that relative levels of judicial independence are difficult to recalibrate (p.12).
Controlling for per capita income in 1900, Berkowitz and Clay find a strong positive correlation between judicial independence and income in 2003 (p.13). In other words, long-term economic performance is tied to governmental and political institutions.
Chapter Two, “Legal Initial Conditions,” considers the effects of civil law and of common law upon states’ later development. “Strong courts,” they say, “are generally thought to be good for economic activity and society more broadly” (p.17). In some common-law states, residents insisted on a balance of power very early on. Here, they point to the quarrel in early Massachusetts over the proper relationship between judges and magistrates (p. 17; also see Hall, 2011)). The chapter explains how the authors came to classify each of the 48 contiguous states as either civil-law or common-law.
Chapter Three, “Initial Conditions and State Political Competition,” examines the relationships between “temperature, precipitation, distance to oceans, distance to rivers and lakes, and colonial legal system [civil law or common law],” on one hand, and political competition, on the other (p.60). Competition – or lack thereof – in state legislatures has been highly persistent, the authors note (p.61), and they want to show why. After extensive statistical analysis using various measures, they establish that while precipitation and distance to rivers and lakes were related to competition, the initial legal system was not (p.86).
Chapter Four, “The Mechanism,” identifies a factor that drove political competition. The state’s elite occupational homogeneity, Berkowitz and Clay conclude, was strongly negatively related to political competitiveness. In other words, where the elite shared economic interests, they were far less apt to be politically divided (p.119). Here as elsewhere, the authors take account of the fact that slavery and the Civil War/ Reconstruction experience led to the South’s long-running domination by the Democratic Party. They note that several of the states most strongly marked by elite occupational homogeneity were outside the South, and that even when one controls for slavery statistically, there is still a strong negative relationship between elite occupational homogeneity and political competition. (p.124). Yet, “The point is not to dismiss the importance of slavery or the experience of the southern states. It is to show that other factors, notably the occupational homogeneity of the elite, also shaped political competition in state legislatures and political institutions more broadly”(p.128)
In Chapter Five, “State Courts,” the authors consider various questions related to judicial independence. In particular, they want to establish the extent to which [*139] original legal system and political competition have affected judicial independence (p.133). They explain their interest by asserting that, “The independence of judges in state high courts influences their behavior on the bench and thus economic and social outcomes” (p.133). Here, they point to a study purporting to show this link by proving that where judges face Republican electorates for reelection, those judges tend to rule in a conservative way across a range of issues, while when they face Democratic voters, they tend to rule in the opposite direction across the same range of issues. One can of course think of alternative explanations to a direct causal link.
Berkowitz and Clay demonstrate that only marked shifts in political competition will lead to alterations of a state’s judicial retention system. In other words, “In the absence of changes in the levels of political competition, current levels of judicial independence will persist” (p.134). Other factors did influence the equation, however.
Among those was the jurisdiction’s original legal system. States that began as civil-law polities persisted in lower levels of judicial independence, and they increased those levels at higher levels of political competition than did common-law states (p.135). States with more legislative competition were much less likely to use partisan judicial elections (p.148). Judicial term length, too, rose with political competition (p.155). One wishes the authors had controlled for the end of the Solid South, but they seemingly did not.
In Chapter Six, “Legislatures and Courts,” we are told that judicial expenditures (and judicial salaries (p.180)) are strongly correlated with political competition and negatively correlated with judicial elections and civil-law origins (p.170). Chapter Seven, “Institutions and Outcomes,” draws the study together by noting that while political systems were highly persistent, change was correlated with the few factors previously discussed.
In general, this book will appeal to political scientists and to political historians. The authors clearly explain the statistical methods they employ, and their findings all seem plausible. One cannot help but note, however, that correlation simply is not causation, and so it is always possible that the correlations they have identified do not amount to causal links.
Still, with that caveat in mind, I found this work highly enlightening. Particularly fascinating to me was the insight that states with civil-law origins, however fleeting, demonstrated distinctive trajectories of institutional development over their entire histories. So persistent are constitutional arrangements that very brief periods of civil-law culture weigh on states that experienced them even now, many decades later. Even if it were only for that insight, this brief, clear, persuasive book would repay a reading.
Hall, David D. 2011. A Reforming People: Puritanism and the Transformation of Public Life in New England. Knopf.
© Copyright 2012 by the author, Kevin R. C. Gutzman.