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There ain’t no such thing as a free deed: the case of Italian notaries

Author

Listed:
  • Luciano Lavecchia

    (Istituto Bruno Leoni)

  • Carlo Stagnaro

    (Istituto Bruno Leoni)

Abstract

The cost of starting a business in Italy is relatively high as compared with other EU member states. One reason is the cost of notarization, which is mandatory under the Italian law. In order to reduce this cost, in 2012 a new type of limited liability company was created—the simplified limited liability company—for which notarization should be provided free-of-charge. In this paper we explore the reasons behind the requirement of notarization and review the evidence from a few cases where notarization was made optional. Subsequently, we describe the results of an ad hoc experiment in order to evaluate the design of the policy. We performed a randomized control trial involving almost 350 notaries in Rome, Italy. We find that the majority of the notaries in our sample do not fulfill the obligation by asking a greater-than-zero fee, therefore suggesting the policy is not fully effective. We conclude that obliging notaries to perform specific tasks below-costs (or even free-of-charge) may not be an effective policy, leading to suboptimal results.

Suggested Citation

  • Luciano Lavecchia & Carlo Stagnaro, 2019. "There ain’t no such thing as a free deed: the case of Italian notaries," European Journal of Law and Economics, Springer, vol. 47(2), pages 277-290, April.
    • Handle: RePEc:kap:ejlwec:v:47:y:2019:i:2:d:10.1007_s10657-019-09612-x
    DOI: 10.1007/s10657-019-09612-x
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    More about this item

    Keywords

    Notary; Competition; Italy; Liberalization; Productivity; RCT;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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