Economics Dictionary of ArgumentsHome
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| Legal history: Legal history is the study of how law has evolved and why it has changed. It is closely connected to the development of civilizations and operates in the wider context of social history. See also Law, Laws, History, Historiography, Civilization, Society._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Microeconomics on Legal History - Dictionary of Arguments
Parisi I 164 Legal history/microeconomics/Wangenheim: The seminal pair of papers by Rubin (1977)(1) and Priest (1977)(2) constitute the root of a long history of microeconomic publications on the evolution of the common law, that is, judge-made law. Rubin: Rubin's central argument was that legal rules will be challenged in court only if they are inefficient. If rules are efficient, Parisi I 165 all cases will be settled to avoid litigation costs. The possibility of replacing an inefficient rule by an efficient one, however, allows for enough joint expected future gains from having a better rule to outweigh the litigation costs. As a consequence, so goes Rubin's argument, the common law evolves towards efficiency. Priest: Priest (1977)(2) formalizes the argument as a simple Markov process of the proportion of rules that are efficient, where every rule can either be efficient or inefficient. >Legal history/Priest. Further development of priest’s theory: Cooter and Kornhauser (1980)(3) as well as Miceli (2010)(4) elaborate on the stochastic nature of the model and stress that law in the model fails to evolve towards a certain state but rather evolves to a stationary distribution so that the law toggles back and forth between all possible states, efficient and inefficient ones. Goodman (1978)(5), Landes and Posner ( 1979)(6), and Wangenheim (1993)(7) endogenize litigation expenditures of the parties and their effect on judicial decisions. Asymmetry: Priest and Klein (1984)(8) as well as Fon and Parisi (2003)(9) and Fon et al. (2005)(10) find that the conditions under which the parties initiate litigation imply an asymmetry between plaintiffs and defendants. Many of these variations weaken the result that judge-made law evolves towards efficiency. Vs: That it does so more than statutory law is put into question by Hirshleifer (1982)(11), Wangenheim ( 1993)(7), Rubin and Bailey (1994)(12), Georgakopoulos (1997)(13), and again Rubin (1982(14), 2005(15)) on the grounds that all arguments that are needed for the efficiency claim with respect to com- mon law equally apply to legislated law. Despite all these criticisms, the approach has served as theoretical basis for empirical studies of the effect of legal origins of countries on their economic success and the quality of their current law (e.g. La Porta et al., 1997(16); also see La Porta et al., 2017(17)). Vs: Hatzis (2002)(18), Garoupa and Morriss (2012)(19), and Garoupa and Ligüerre (2011)(20) criticize this approach and other simple dichotomies of common and Parisi I 166 statutory law, as they contradict empirical evidence on several fields of law and lack a profound understanding of the working of common and civil law. Hadfield (2011)(21) identifies alternative parameters of judicial systems that are more important than the dichotomy between common and statute law for predicting the adaptability of legal systems. Exogenous variations: Ponzetto and Fernandez (2008)(22) suggest a model in which they integrate legislative change to a model of common law evolution. Like Georgakopoulos (1997)(13), they allow for exogenous variations of the efficient state of the law and argue that under many conditions a combination of common and statute law is optimal. Rubin: Rubin et al. (2001)(23) and Osborne (2002)(24) do not take the degree to which a legal system is driven by judge-made or by legislated law as given, but rather allow rent-seekers to affect the relative weight of the two sources of law by allocating their activity between the legislator and the courts. The publications referred to so far with few exceptions concentrate on the litigating parties (the "demand side") (…). “Supply side”/judges: Ehrlich and Posner (1974)(25) study how judges' desire for reputation for not contradicting precedents may curb their private preferences concerning good law. Miceli and Cosgel (1994)(26) extend this idea by arguing that the decision to rule against a precedent is not necessarily a cost to judges but may rather be a benefit if their decisions become the foundation for a new precedent. Gennaioli and Shleifer (2007)(27) show that judges who dislike erroneous decision and are individually, but not on average, biased with respect to efficiency may be expected to improve the common law's efficiency when precedent is strict in the sense that judges may change the legal rule only by further differentiating rules, but not by overruling them. 1. Rubin, P. H. (1977). "Why Is the Common Law Efficient?" Journal of Legal studies 6: 51-63. 2. Priest, G. L. (1977). "The Common Law Process and the Selection of Efficient Rules." Journal of Legal Studies 6:65-82. 3. Cooter, R. D. and L. Kornhauser (1980). "Can Litigation Improve the Law without the Help of Judges?" Journal of Legal Studies 9: 139-163. 4. Miceli, T. J. (2010). "Legal Change and the Social Value of Lawsuits." International Review of Law and Economics 30:203-208. 5. Goodman, J. C. (1978). "An Economic Theory of the Evolution of Common Law." Journal of Legal Studies 7: 393-406. 6. Landes, W. and R. Posner (1979). "Legal Change, Judicial Behavior, and the Diversity Jurisdiction." Journal of Legal Studies 9:367-386. 7. Wangenheim, G. v. (1993). "The Evolution of Judge-Made Law." International Review of Law and Economics 13: 381-411. 8. Priest, G. L. and B. Klein (1984). "The Selection of Disputes for Litigation." Journal of Legal Studies 13: 1-55. 9. Fon, V. and F. Parisi (2003). "Litigation and the Evolution of Legal Remedies: A Dynamic Model." Public Choice 116:419-433. 10. Fon, V., F. Parisi, and B. Depoorter (2005). "Litigation, Judicial Path-Dependence, and Legal Change." European Journal of Law and Economics 20:43—56. 11. Hirshleifer, J. (1982). "Evolutionary Models in Economics and Law." Research in Law and Economics 4: 1-60. 12. Rubin, P. H. and M. J. Bailey (1994). "The Role of Lawyers in Changing the Law." Journal of Legal studies 23:807-831. 13. Georgakopoulos, N. L. (1997). "Predictability and Legal Evolution." International Review of Law and Economics 17:475-489. 14. Rubin, P. H. (1982). "Common Law and Statute Law!' Journal of Legal studies 1 1:205-223. 15. Rubin, P. H. (2005). "Why Was the Common Law Efficient?," in F. Parisi and C. K. Rowley, eds., The Origins of Law and Economics: Essays by the Founding Fathers, 383-395. Cheltenham and Northampton, MA: Edward Elgar. 16. La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny (1997). "Legal Determinants of External Finance." Journal of Finance 52: 1131-1150. 17. La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny (2017). "Legal Origins and Economic Performance: Theory and Evidence," in F. Parisi, ed., oxford Handbook of Law and Economics, vol. 3. Oxford: Oxford University Press. 18. Hatzis, A. (2002). "Having the Cake and Eating It Too: Efficient Penalty Clauses in Common and Civil Contract Law." International Review of Law and Economics 22:381-406. 19. Garoupa, N. and A. Morriss (2012). "The Fable of the Codes: The Effciency of the Common Law, Legal Origins, and Codification Movements." University of Illinois Law Review 2012: 1443-1497. 20. Garoupa, N. and C. G. Ligüerre (2011). "The Syndrome of the Efficiency of the Common Law." Boston University International Law Journal 29: 287-335. 21. Hadfield, G. K. (2011). "The Quality of Law: Judicial Incentives, Legal Human Capital and the Evolution of Law." Journal of Economic Behavior and Organization 79:80-94. 22. Ponzetto, G. A. M. and P. A. Fernandez (2008). "Case Law versus Statute Law: An Evolution Comparison." Journal of Legal Studies 3 7: 379-430. 23. Rubin, P. H., C. Curran, and J. F. Curran (2001). "Litigation Versus Legislation: Forum Shopping by Rent Seekers." Public Choice 107: 295-310. 24. Osborne, E. (2002). "What's Yours Is Mine: Rent-Seeking and the Common Law." Public Choice 111:399-415. 25. Ehrlich, I. and R. Posner (1974). "An Economic Analysis of Legal Rule Making." Journal of Legal studies 3:257-286. 26. Miceli, T. J. and M. M. Cosgel (1994). "Reputation and Judicial Decision-Making." Journal of Economic Behavior and Organization 23: 31-51. 27. Gennaioli, N. and A. Shleifer (2007). "The Evolution of Common Law." Journal of Political Economy 115:43-68. Wangenheim, Georg von. „Evolutionary Law and Economics.” In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University Press_____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Microeconomics Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
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> Counter arguments in relation to Legal History
