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Hastings International and Comparative Law Review

Abstract

This Article analyzes the problem of property law reform in former Socialist countries from a comparative law and economics perspective. While traditional classification of former Socialist countries as a homogeneous family can now be questioned on the basis of both past and present legal transplants, they still share sufficiently similar political, economic and institutional backgrounds to justify codification efforts directed towards the entire region.

Codification of property law must be preceded by political choices regarding distribution. In the context of former Socialist countries, such codification takes place in concomitance with the allocation of relevant goods to owners for the first time. This creates a tension between the broad rights granted to owners by the new Constitutions and the privatization enactments adopted as a result of idealization of laissez- faire capitalism following the fall of the Soviet regime. The drafting of efficient rules, however, is predicated upon the adoption of a sufficiently sound theoretical basis regulating the means of acquiring property. The lack of such theoretical basis results in a weakness of the control apparatus, which in turn undermines the privatization effort.

The success of any property law reform initiatives, however, is dependent upon the effectiveness of the legal process used to enforce them. As property law deals with problems of both public and private law, it is important to address the proper balance between them in reforming property laws in former Socialist countries. Comparative law and economics shows that systems of law in transition would mostly benefit from entrusting such choices to a unitary system of courts similar to the common-law model.

Legal tradition is a major source of high transaction costs. The Roman law conception of property rights, in particular, introduces very high costs in the area of property law. Property law reform in former Socialist countries provides a clear opportunity to do away with such inefficient principles of civil law and replace them with more efficient rules offered by common-law systems. These efforts would make a real contribution to the development of European private law.

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