Zywicki, Todd J.; Stringham, Edward Peter --- "Common Law and Economic Efficiency" [2011] ELECD 1065; in Parisi, Francesco (ed), "Production of Legal Rules" (Edward Elgar Publishing, 2011)

Book Title: Production of Legal Rules

Editor(s): Parisi, Francesco

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848440326

Section: Chapter 7

Section Title: Common Law and Economic Efficiency

Author(s): Zywicki, Todd J.; Stringham, Edward Peter

Number of pages: 25

Extract:

7 Common law and economic efficiency
Todd J. Zywicki and Edward Peter Stringham



1. Introduction
From its inception, a foundational claim of law and economics is that the
common law tends to the promotion of economic efficiency (Posner 2007).
Much of the traditional law and economics research agenda has been concerned
with positive analysis testing the efficiency properties of rules across different
common law doctrinal areas. The strength of this claim has been tempered over
time, however, as some leading law and economics scholars have argued that the
efficiency-enhancing attributes of the common law have weakened over time
and that during the 20th century the common law has increasingly produced
rules that promote wealth redistribution instead of efficiency. Nonetheless, the
application of economics to determine the efficiency-promoting tendencies of
various legal rules remains a defining research agenda for law and economics.
Since the articulation of the efficiency of the common law hypothesis,
analysts have been concerned with a corollary question: if the common law
does tend to efficiency, what is the mechanism or mechanisms that produce that
result? The question is especially puzzling in light of the general absence from
judicial opinions of any express stated concern with promoting efficiency or any
obvious expertise or concern of judges to further efficiency. Here we focus not
on the postulated efficiency-enhancing properties of particular legal rules, but
rather this corollary question of the common law process itself and whether that
process tends to the promotion of efficiency-enhancing rules. ...