Rule of Law, Rule of Wealth: Dialectical Legal Fragmentation and the Offshore Economy

• In Event: Global Perspectives on Wealth and Elites

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.

Authors

• Gregory Jackson, King's College London

• Bruce Hearn, University of Southampton