An Economic Theory of the Evolution of Common Law

Goodman, John C.

doi:10.1086/467600

Cited by 141 publications

(34 citation statements)

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“…Had…eld (1992) assumes judges have socially-aligned incentives and make no errors and considers the capacity of common law to evolve to e¢ ciency when the information generated through litigation is necessarily a biased sample, in contrast to the potential for legislative investigation to be comprehensive. Other authors rest predictions about the likelihood that the common law will evolve to e¢ ciency, with or without judges who are interested in e¢ ciency, on the incentives of litigants to continue challenging ine¢ cient rules (Rubin 1977, Priest 1977, Goodman 1978, Cooter, Kornhauser and Lane 1979. Despite di¤erences, these models of the evolution of the common law all share a common recognition that courts do not start out with the right rules.…”

Section: Introductionmentioning

confidence: 99%

The Quality of Law: Judicial Incentives, Legal Human Capital and the Evolution of Law

Hadfield

2007

SSRN Journal

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Much of the existing literature investigating the relationship between legal regimes and economic growth focuses on an abstract, often unrealistic, distinction between judge-made common law and civil codes and on the agency problem of aligning judicial incentives with largely static conceptions of social welfare. In this paper I look at the institutionallygrounded factors that in ‡uence the dynamic quality of law when judges have incentives to promote social welfare but they have limited knowledge, and information about a local or changing environment is costly to obtain. The central mechanism by which the law adapts to new information is the interaction among three factors: 1) judicial incentives for rule-following and rule-adaptation, 2) litigant incentives for investing in costly evidence and innovative legal argument and 3) the accumulation of shared legal human capital -de…ned as the sum of litigant investments in evidence and argument-which determines the systemic likelihood of judicial error. This analysis focuses attention on the detailed institutional structure of a legal regime rather than the abstract distinction between judge-made and code law. I identify …ve key legal institutional parameters that a¤ect the dynamic quality of law. These parameters, I claim, provide a better guide for the comparative analysis of the economic impact of legal regimes than the current focus on the dichotomous categorization of regimes as either common law or civil code.

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Section: Introductionmentioning

confidence: 99%

The Quality of Law: Judicial Incentives, Legal Human Capital and the Evolution of Law

Hadfield

2007

SSRN Journal

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“…Goodman (1978) argued that efficient precedents were worth more to parties who would benefit than inefficient precedents were to their beneficiaries, and thus litigants would be willing to invest greater amounts in the pursuit of efficient precedents than inefficient precedents, producing a tendency toward efficiency. While this assumption may be true (although contestable), Goodman does not consider the potential for collective action problems to undermine the ability of parties to effectively litigate in favor of efficient rules if the benefits are widely dispersed and are received by parties other than the litigating party as discussed below.…”

Section: = (Vl)mentioning

confidence: 99%

Common law and economic efficiency

Zywicki¹,

Stringham²

2017

Encyclopedia of Law and Economics

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“…28 26. Key papers that adopt the former focus include Cardozo (1921), Cooter, Kornhauser, and Lane (1979), Gennaioli and Shleifer (2007), and Ponzetto and Fernandez (2008), and notable papers that reflect the latter focus are Rubin (1977), Priest (1977), Goodman (1978), and Landes and Posner (1979).…”

Section: Quarterly Journal Of Economicsmentioning

confidence: 99%

The Role of Dispute Settlement Procedures in International Trade Agreements*

Maggi¹,

Staiger²

2011

The Quarterly Journal of Economics

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Although disputes are typically treated as synonymous with concerns about enforcement in economic models of trade agreements, in reality most WTO disputes seem to concern the interpretation of vague provisions, or instances where the agreement is silent. And some have suggested that the WTO's Dispute Settlement Body (DSB) could usefully grant exceptions to rigid contractual obligations. These activist DSB roles could help "complete" an incomplete contract. But how activist should the DSB be? Should DSB rulings set precedent? We address these questions by characterizing the optimal choice of contract form and DSB mandate under various contracting conditions. JEL Codes: D02, D78, D86, F13, K12, K33.

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An Economic Theory of the Evolution of Common Law

Cited by 141 publications

References 0 publications

The Quality of Law: Judicial Incentives, Legal Human Capital and the Evolution of Law

The Quality of Law: Judicial Incentives, Legal Human Capital and the Evolution of Law

Common law and economic efficiency

The Role of Dispute Settlement Procedures in International Trade Agreements*

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