ABSTRACT Title of Dissertation: INSTITUTIONAL PERSISTENCE AND CHANGE IN ENGLAND’S COMMON LAW: 1700-1865 Martin Schmidt, Doctor of Philosophy, 2016 Dissertation directed by: Professor Peter Murrell, Department of Economics Institutions are widely regarded as important, even ultimate drivers of economic growth and performance. A recent mainstream of institutional economics has concentrated on the effect of persisting, often imprecisely measured institutions and on cataclysmic events as agents of noteworthy institutional change. As a consequence, institutional change without large-scale shocks has received little attention. In this dissertation I apply a complementary, quantitative-descriptive approach that relies on measures of actually enforced institutions to study institutional persistence and change over a long time period that is undisturbed by the typically studied cataclysmic events. By placing institutional change into the center of attention one can recognize different speeds of institutional innovation and the continuous coexistence of institutional persistence and change. Specifically, I combine text mining procedures, network analysis techniques and statistical approaches to study persistence and change in England’s common law over the Industrial Revolution (1700-1865). Based on the doctrine of precedent - a peculiarity of common law systems - I construct and analyze the apparently first citation network that reflects lawmaking in England. Most strikingly, I find large-scale change in the making of English common law around the turn of the 19th century - a period free from the typically studied cataclysmic events. Within a few decades a legal innovation process with low depreciation rates (1 to 2 percent) and strong past-persistence transitioned to a present-focused innovation process with significantly higher depreciation rates (4 to 6 percent) and weak past-persistence. Comparison with U.S. Supreme Court data reveals a similar U.S. transition towards the end of the 19 th century. The English and U.S. transitions appear to have unfolded in a very specific manner: a new body of law arose during the transitions and developed in a self-referential manner while the existing body of law lost influence, but remained prominent. Additional findings suggest that Parliament doubled its influence on the making of case law within the first decades after the Glorious Revolution and that England’s legal rules manifested a high degree of long-term persistence. The latter allows for the possibility that the often-noted persistence of institutional outcomes derives from the actual persistence of institutions. INSTITUTIONAL PERSISTENCE AND CHANGE IN ENGLAND’S COMMON LAW: 1700-1865 by Martin Schmidt Dissertation submitted to the Faculty of the Graduate School of the University of Maryland, College Park, in partial fulfillment of the requirements for the degree of Doctor of Philosophy 2016 Advisory Committee: Professor Peter Murrell, Chair Professor John Wallis Professor Ethan Kaplan Professor Allan Drazen Associate Professor Michelle Girvan © Copyright by Martin Schmidt 2016 Dedication To my parents and Yehuda in love ii Table of Contents List of Tables ix List of Figures x Chapter 1: Introduction 1 Chapter 2: The long way to the English Reports 14 Literature on the history of Western European law 15 Origins of Western European law 19 Origins of English law 22 Common law courts 25 Equity courts and prerogative courts 26 The Glorious Revolution and the predominance of common law 28 Doctrines of precedent 29 Case reports 32 The English Reports 35 Chapter 3: Data preparation 37 Data extraction 38 Choosing a database 39 Creating text files 39 Extracting case information 39 Extracting case citations 41 Extracting statute citations 42 Correcting OCR errors (case names and case dates) 44 Cleaning and combining data 44 Merging duplicate nominate citations 45 Adding missing dates 45 Adding reporter volume information 46 Matching cited cases 46 Removing duplicate case and statute citations 47 Deleting erroneous case and statute citations 48 Final dataset 49 Citation network 49 Chapter 4: Data interpretation and reliability 51 Legal process 51 Written precedents and statutes 53 Holdings, analogies and images of law 55 Meaning and influence of ER citations 60 ER random sample: extraction reliability and citation content 64 Meaning of ER citation 69 Legal evolution 71 iii Chapter 5: Patterns in the citation network 74 Fluctuations in the number of cases and case reports 75 Random citing model 77 Equity law - common law split 78 Entanglement of common law courts 80 Five most cited common law cases 82 Time depreciation - aging 88 Distribution of citation frequency 91 Controlling heterogeneities 94 The representative courtroom 97 Meaningful network structure 101 Chapter 6: Persistence and change - case precedents 103 Long-term persistence of case rulings 106 Rise and fall of common law’s top authorities 109 Time profiles 114 Common law communities 123 Varieties of persistence and change 129 Chapter 7: Persistence and change - U.S. case precedents 135 Basic structural features 137 Long-term persistence of case rulings 138 U.S. Supreme Court’s top authorities 139 Time profiles 141 U.S. communities 143 Commonalities and differences: insights from the U.S. 144 Chapter 8: Persistence and change - statutes 148 Basic structural features 149 Long-term persistence 151 Top statute authorities 152 Statute time profiles 155 Statute presence in courtrooms 157 Commonalities and differences: insights from statutes 158 Chapter 9: Conclusions and future research 160 Construction of citation network 161 Long-term persistence 162 Statute influence on law making 164 Transition in legal innovation 165 Unfolding of the transition 171 Accelerated legal innovation 173 Further research 176 iv Tables 179 Figures 207 Appendix A: Python code for citation extraction 249 ER search 249 search cases 256 search statutes 258 Appendix B: Stata code for data cleaning 264 1_prepare case information & volume attributes 264 2_merge cases data 268 3_merge statutes data 280 Appendix C: R code for the detection of network communities 286 Appendix D: Stata code for the preparation of tables and figures 290 Bibliography 361 v List of Tables Table 1: Variables names and descriptions of the citation dataset 179 Table 2: Data summary of citation dataset 181 Table 3: Random sample of 25 case reports used in the process of data validation 182 Table 4: Summary statistics of data reliability variables in random sample with 25 case reports 200 Table 5: Summary statistics of citation content variables in random sample with 25 case reports 201 Table 6: List of the 20 most cited common law case reports (citations between the years 1700 and 1865) 202 Table 7: Estimations of exponential model to capture overall time depreciation 203 Table 8: Modularity scores for the 2 different community detection algorithms and 3 different predetermined community sizes 204 Table 9: Time profile correlations between cited semi-decades of select citing decade 205 Table 10: Overlaps between members of the two detected spinglass and Louvain communities 206 vi List of Figures Figure 1: Stylized view on the Court of King’s Bench (back left), the Court of Chancery (back right), and the Court of Common Pleas (right), and the surrounding life in Westminster Hall in the year 1797 207 Figure 2: Reproduction from English Reports of the first volume of Taunton’s Court of Common Pleas reports: page 210 208 Figure 3: Reproduction of case report 1 Taunton 210 after export from Juta Law database (compare with previous page) 209 Figure 4: Reproduction from the English Reports of two case reports with the same nominate citation 1 Taunton 64 210 Figure 5: Part of citation network that is a depiction of the case reports (nodes) and citations (links) mentioned in the ER case report 1 taunton 210 211 Figure 6: Illustration of how cumulative cultural evolution is reflected in a citation network 211 Figure 7: Annual number of ER case reports for common law and equity law courts 212 Figure 8: Cases in advanced stages in King’s Bench and Common Pleas, 1640-1830 212 Figure 9: Relative distribution of citations between equity law and common law 213 Figure 10: Relative distribution of citations between common law’s courts of King’s Bench, Common Pleas and Exchequer 213 Figure 11: Frequency distribution of citing dates of the 5 most cited common law cases 214 Figure 12: Frequency distribution of citations by the age of cited cases 215 Figure 13: Log frequency distribution of citations by the age of cited cases 215 Figure 14: Frequency distribution of cases by number of received citations 216 Figure 15: Decade average number of new citations relative to previously accumulated citations 217 Figure 16: Degree of long-term persistence of case rulings for two representative decades 218 vii Figure 17: Degree of long-term persistence of case rulings for all decades between 1580 to 1700 219 Figure 18: Means and standard deviations of annual age composition of common law’s top authorities (1700-1865) 220 Figure 19: Medians and median absolute deviations of annual age composition of common law’s top authorities (1700-1865) 220 Figure 20: Means and standard deviations, medians and median absolute deviations of annual age composition model top authorities of data that was generated based on the random citing model (1700-1865) 221 Figure 21: Annual age composition of common law’s top 100 authorities in 4 different years 222 Figure 22: Annual temporal composition