Rule of law, rule of wealth: dialectical legal fragmentation and the offshore economy
Rule of law, rule of wealth: dialectical legal fragmentation and the offshore economy
Offshore financial centres (OFCs) present a paradox: they offer strong legal protections for mobile capital while undermining the universal application of law. To explain this, we develop the concept of dialectical legal fragmentation (DLF)—a condition in which calculable legal frameworks coexist with sovereign-crafted exceptions that hollow out legal generality. Drawing on Franz Neumann’s theory of law under monopoly capitalism, we argue that OFCs institutionalize this dualism by combining legal stability with selective privilege. Using logistic regression on 226 jurisdictions, we find that OFCs are significantly more likely to exhibit high political stability and elite mobility infrastructure, but lower levels of rule-of-law generality. Predicted margins show that OFC status increases with sovereign privileges such as residency-by-investment schemes. OFCs are thus not legal anomalies or regulatory failures, but structured expressions of capitalism’s demand for both order and exception. The DLF framework advances socio-legal theory by clarifying how law is reconfigured to serve elite interests
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
November 2025
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Hearn, Bruce
(2025)
Rule of law, rule of wealth: dialectical legal fragmentation and the offshore economy.
International Corporate Governance Society [ICGS] annual conference 2025: International Corporate Governance Society [ICGS] annual conference 2025, AMBS, Manchester, UK, Manchester, United Kingdom.
18 - 19 Oct 2025.
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Conference or Workshop Item
(Paper)
Abstract
Offshore financial centres (OFCs) present a paradox: they offer strong legal protections for mobile capital while undermining the universal application of law. To explain this, we develop the concept of dialectical legal fragmentation (DLF)—a condition in which calculable legal frameworks coexist with sovereign-crafted exceptions that hollow out legal generality. Drawing on Franz Neumann’s theory of law under monopoly capitalism, we argue that OFCs institutionalize this dualism by combining legal stability with selective privilege. Using logistic regression on 226 jurisdictions, we find that OFCs are significantly more likely to exhibit high political stability and elite mobility infrastructure, but lower levels of rule-of-law generality. Predicted margins show that OFC status increases with sovereign privileges such as residency-by-investment schemes. OFCs are thus not legal anomalies or regulatory failures, but structured expressions of capitalism’s demand for both order and exception. The DLF framework advances socio-legal theory by clarifying how law is reconfigured to serve elite interests
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ofc paper - icgs manchester jackson hearn
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Published date: November 2025
Venue - Dates:
International Corporate Governance Society [ICGS] annual conference 2025: International Corporate Governance Society [ICGS] annual conference 2025, AMBS, Manchester, UK, Manchester, United Kingdom, 2025-10-18 - 2025-10-19
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Local EPrints ID: 510434
URI: http://eprints.soton.ac.uk/id/eprint/510434
PURE UUID: 21315692-ae01-4d02-8288-36b31f7c2417
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Date deposited: 31 Mar 2026 16:43
Last modified: 01 Apr 2026 01:57
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