How the Rule of Law Shapes Trust? The Role of the Transplant Effect and Legal Families

Abstract

This study empirically examines the argument that the borrowing of laws and legal institutions from other countries affects the effectiveness of the legal system and, in turn, interpersonal trust. We utilise instruments on legal transplantation to understand the effectiveness of the legal system. Our instrumental variables estimations suggest that successful legal transplantation fosters trust by improving the effectiveness of the legal system. If a recipient country is familiar or culturally close to the transplanted law, or adaptation of the transplanted law has been achieved, a better legal system through mitigating the transplant effect promotes trust. Moreover, diverse and weak estimates for legal families suggest that they do not consistently affect the effectiveness of a legal system. Moreover, even after the addition of legal families into the instrument list, the transplant type variable still has a robust and consistent effect on the effectiveness of a legal system and, in turn, on trust. Regardless of the legal family of the transplanted law, if a transplant country shares cultural similarities with the country of origin, it tends to have higher interpersonal trust due to its better legal system. Therefore, lawmakers should carefully consider the importance of the nexus between legal transplantation, the legal system, and trust in addressing the economic and social challenges faced by countries. © 2025 Akadémiai Kiadó, Budapest