Wagner, Richard E. --- "Dispute resolution when rationalities conflict: cost and choice in a mixed economy" [2017] ELECD 1576; in Zywicki, J. Todd; Boettke, J. Peter (eds), "Research Handbook on Austrian Law and Economics" (Edward Elgar Publishing, 2017) 209

Book Title: Research Handbook on Austrian Law and Economics

Editor(s): Zywicki, J. Todd; Boettke, J. Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849801133

Section: Chapter 10

Section Title: Dispute resolution when rationalities conflict: cost and choice in a mixed economy

Author(s): Wagner, Richard E.

Number of pages: 22

Abstract/Description:

In bringing economic analysis to bear on the settlement of legal disputes, it is commonly presumed that the parties to the dispute are governed by the principles of private property and so are residual claimants to their legal expenses. This institutional framework promotes a substantive rationality that is often conducive to the settlement of disputes without trial. In contemporary mixed economies, however, a political agency is often party to a dispute. These agencies operate under a different substantive rationality because the framework of collective property under which they operate means they do not have residual claims on their legal expenses. They can, however, convert those expenses into investments in politically preferred activity. What results is a conflict between rationalities that generates societal tectonics that often are misidentified as market failures when they are really systemic properties of the conflicting rationalities.