Economics Dictionary of ArgumentsHome
| |||
|
| |||
| Legal entrepreneurship: in economics refers to the innovative use of legal frameworks to create, expand, or optimize business opportunities. It involves leveraging laws, regulations, or legal strategies to gain a competitive edge, resolve disputes, or establish new markets while navigating the legal environment effectively._____________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. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
Austrian School on Legal Entrepreneurship - Dictionary of Arguments
Parisi I 283 Legal Entrepreneurship/ Austrian school: Whitman (2002)(1) (…) extends the idea of entrepreneurship to the role played by lawyers and litigants. He examines how legal entrepreneurs discover and exploit opportunities to change legal rules—either the creation of new rules or the reinterpretation of existing ones to benefit themselves and their clients. Harper: Harper (2013)(2) believes that the entrepreneurial approach lays the groundwork for explaining the open-ended and evolving nature of the legal process—it shows how the structure of property rights can undergo continuous endogenous change as a result of entrepreneurial actions within the legal system itself. The most important differentiating factor separating the entrepreneurship of the market process from legal entrepreneurship is the absence of the discipline of monetary profit and loss in the latter case. Although money may change hands in the process of legal entrepreneurship, its outputs may not be valued according to market prices, especially when there is a public-goods quality to the rule at issue. Whether effective feedback mechanisms exist in the contexts is therefore an open question. Martin: Martin argues that, in such structures, the feedback mechanism in polities is not as tight as feedback in the market mechanism, and therefore ideology plays a greater role in such decision-making (Martin, 2010)(3). Legal entrepreneurship can be coordinating and yet also increase uncertainty and conflicts in society. It all depends on the kind of legal order in operation and the mechanism by which it is generated and maintained. Rubin/Priest: Rubin (1977)(4) and Priest (1977)(5) originally analyzed how the openly competitive legal process tends to promote economic efficiency. They more recently point out that the common law system has succumbed to interest group pressures and has deviated from producing efficient rules (Tullock, 2005/1980(6); Tullock, 2005/1997(7); Priest, 1991)(8). They argue that litigation efforts by private parties can explain both the common law’s historic tendency to produce efficient rules as well as its more recent evolution away from efficiency in favor of wealth redistribution through the intrusion of strong interest groups into political and legal processes. Zywicki: Zywicki (2003)(9) describes the common law system in the Middle Ages as polycentric. He focuses on three institutional features of the formative years of the common law system. First, courts competed in overlapping jurisdictions and judges competed for litigants. Second, there was a weak rule of precedent instead of the present-day stare decisis rule. And third, legal rules were more default rules, which parties could contract around, instead of mandatory rules. These features are missing in the present-day common law system, which is non-competitive, has strong rules of precedent, Parisi I 284 precedent, and is dominated by mandatory rules. The efficiency claims pertain to a social system grounded in private ordering where those who are subject to those legal rules select the rules in open competition. Rajagopalan/Wagner : Rajagopalan and Wagner (2013)(9) argue that the inefficiency claims pertaining to the current system of common law rules are a result of the entrepreneurial action within the contemporary system of the “entangled political economy.” The entangled political economy is essentially a “hybrid” of a monocentric state structure interacting with polycentric or private ordering, encouraging “parasitical” entrepreneurship within the legal system (Podemska-Mikluch and Wagner, 2010)(10). Rajagopalan (2015)(11) provides India as a case study to discuss a system of rules incongruent to the economy consequently giving rise to “parasitical” entrepreneurial action and entanglement of economic and legal orders. There is also “political entrepreneurship” within a given constitutional or governance structure that seeks to create coalitions to effect specific legislation or transfers of wealth (rent seeking). Martin and Thomas (2013)(2) describe such political entrepreneurship at different levels of the institutional structure, at the policy level, legislative level, or the constitutional level. These non-market orders determine the precise form that entrepreneurship takes (Boettke and Coyne, 2009(13); and Boettke and Leeson, 2009)(14). Political entrepreneurship may also attempt to change higher-level rules—like property rights systems, constitutional constraints, and so forth—as a means to gain rents and transfers within an economy (Rajagopalan, 2016)(15). 1. Whitman, D. G. (2002). “Legal Entrepreneurship and Institutional Change.” Journal des Economistes et des Etudes Humaines 12(2): 1–11. 2. Harper, D. A. (2013). “Property rights, entrepreneurship and coordination.” Journal of Economic Behavior and Organization 88: 62–77. 3. Martin, A. (2010). “Emergent Politics and the Power of Ideas.” Studies in Emergent Order 3: 212–245. 4. Rubin, P. H. (1977). “Why is the Common Law Efficient?” Journal of Legal Studies 6(1): 51–63. 5. Priest, G. L. (1977). “The Common Law Process and the Selection of Efficient Rules.” Journal of Legal Studies 6(1): 65–77. 6. Tullock, G. (2005/1980). “Trials on Trial: The Pure Theory of Legal Procedure,” in C. Rowley, ed., The Selected Works of Gordon Tullock, Vol. IX. Indianapolis, IN: Liberty Fund. 7. Tullock, G. (2005/1997). “The Case Against the Common Law,” in C. Rowley, ed., The Selected Works of Gordon Tullock, Vol. IX. Indianapolis, IN: Liberty Fund. 8. Zywicki, T. J. (2003). “The Rise and Fall of Efficiency in the Common Law: A Supply Side Analysis.” Northwestern University Law Review 97(4): 1551–1633. 9. Rajagopalan, S. and R. Wagner (2013). “Legal Entrepreneurship within Alternative Systems of Political Economy.” American Journal of Entrepreneurship 6(1): 24–36. 10. Podemska-Mikluch, M. and R. W. Wagner (2010). “Entangled Political Economy and the Two Faces of Entrepreneurship.” Journal of Public Finance and Public Choice 28(2–3): 99–114. 11. Rajagopalan, S. (2015). “Incompatible institutions: socialism versus constitutionalism in India.” Constitutional Political Economy 26(3): 328–355. 12. Martin, A. and D. Thomas (2013). “Two-tiered political entrepreneurship and the congressional committee system.” Public Choice 154(1): 21–37. 13. Boettke, P. J. and Coyne, C. J. (2009). Context matters: Institutions and entrepreneurship. Hanover: MA, Now Publishers Inc. 14. Boettke, P. J., C. J. Coyne, and P. T. Leeson (2008). “Institutional Stickiness and the New Development Economics.” American Journal of Economics and Sociology 67(2): 331–358. 15. Rajagopalan, S. (2016). “Constitutional Change: A public choice analysis,” in Sujit Choudhary, Pratap Bhanu Mehta, and Madhav Khosla, eds., The Oxford Handbook of the Indian Constitution. New York: Oxford University Press, pp 127–142. Rajagopalan, Shruti and Mario J. Rizzo “Austrian Perspectives on Law and Economics.” In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University._____________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. |
Austrian School Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
||
> Counter arguments against Austrian School
> Counter arguments in relation to Legal Entrepreneurship
Authors A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Concepts A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
