466 HARVARD LAW REVIEW [Vol.120:460 causative links offered thus far in legal origins theory are weak.For another,legal origin in the wealthy West also correlates with other his- torical characteristics,such as how Western nations experienced the early twentieth century's wars and disruptions t mo odern history had powerful political economy nsequence that deeply affecte markets,financial and otherwise.To buttress this alternative explana- tion,I use the proponents'method of quantifying national differences to show that twentieth-century history and politics explain financial differences as well as legal origin does and qualitatively link more strongly to oute comes thap do or gin In ons where legal origir originated,policy varia the domain of eg slatures and regula tors -strongly predict basic financial institutional facts. Those policy differences seem more attuned to differences in postwar politics than to distant differences in legal origin.For example,a risk-averse polity or one preoccupied with left-right conflict would not rebuild strong fi. with alac rity And re mbe that for the first deca after World War II,fighting communism was central to the political agenda in much of Western Europe and East Asia.This anti communist agenda alone strongly affected Western European and East Asian nations'policies toward capital markets through the 198os. n fact,the differential impact of the World Wars and civil wars of the ugly early en tieth century generally pa cks a much planator power as legal origins in predicting the depth of late-twentieth-century financial markets in the wealthy West. I describe in Part I the theories that link legal origin to financial re sults and bring to bear r the legal acad my iews of the classical dif ferences between civil and common law. First,common law systems simply regulate less,it's said;they prefer market solutions and private contracting to centralized,statist regulation.Second,the common law judge better protects outside financiers,especially minority stockhold- ere with common law-based fiduciary duties.The civil law judge is in contrast hamstrung by rigid code because leg gal c 1 preceded modern financial outcomes,markets could not have deter mined origin.Because common law nations protect investors better than civil law nations,origin seems in the theory to cause deep finan- cial markets.But the correlation here seems more coincidental than causal.The qualitative links between origins and investor protection seem weak,and witho ut those link linchpin in the e theory is re moved,suggesting that a strong causal connection vil law and weak financial markets just may not exist Many in the legal academy see the classical differences between civil and common law as not very important in modern economies,whose policy needs induce nations everywhere to regulate and codify. Moreover.while commonHARVARD LAW REVIEW causative links offered thus far in legal origins theory are weak. For another, legal origin in the wealthy West also correlates with other his￾torical characteristics, such as how Western nations experienced the early twentieth century's wars and disruptions. That modern history had powerful political economy consequences that deeply affected markets, financial and otherwise. To buttress this alternative explana￾tion, I use the proponents' method of quantifying national differences to show that twentieth-century history and politics explain financial differences as well as legal origin does and qualitatively link more strongly to outcomes than do origins. In nations where legal origin originated, policy variables - the domain of legislatures and regula￾tors - strongly predict basic financial institutional facts. Those policy differences seem more attuned to differences in postwar politics than to distant differences in legal origin. For example, a risk-averse polity or one preoccupied with left-right conflict would not rebuild strong fi￾nancial markets with alacrity. And remember that for the first decades after World War II, fighting communism was central to the domestic political agenda in much of Western Europe and East Asia. This anti￾communist agenda alone strongly affected Western European and East Asian nations' policies toward capital markets through the i98os. In fact, the differential impact of the World Wars and civil wars of the ugly early twentieth century generally packs as much explanatory power as legal origins in predicting the depth of late-twentieth-century financial markets in the wealthy West. I describe in Part I the theories that link legal origin to financial re￾sults and bring to bear the legal academy's views of the classical dif￾ferences between civil and common law. First, common law systems simply regulate less, it's said; they prefer market solutions and private contracting to centralized, statist regulation. Second, the common law judge better protects outside financiers, especially minority stockhold￾ers, with common law-based fiduciary duties. The civil law judge is in contrast hamstrung by a rigid code. Third, because legal origin long preceded modern financial outcomes, markets could not have deter￾mined origin. Because common law nations protect investors better than civil law nations, origin seems in the theory to cause deep finan￾cial markets. But the correlation here seems more coincidental than causal. The qualitative links between origins and investor protection seem weak, and without those links a linchpin in the theory is re￾moved, suggesting that a strong causal connection between civil law and weak financial markets just may not exist. Many in the legal academy see the classical differences between civil and common law as not very important in modern economies, whose policy needs induce nations everywhere to regulate and codify. Moreover, while common [VOL. 120:46o