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Law, Coercion And Socioeconomic Equilibrium

Author

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  • Gerasimos T. SOLDATOS

    (, American University of Athens, 3 Kodrou str., 15232 Athens, Greece)

Abstract

This paper investigates the economic conditions under which the performance of a Judiciary does not impede non-coercive fair socioeconomic allocations under “Strotz-myopia” regarding the law variable, i.e. under a static view of it in an otherwise dynamic context. The law, here, is the positive factor by which consumption volume is multiplied as a result of law introduction in an otherwise fully private social economy. Lexicographic preferences regarding the law is the keyword in establishing non-coercive equilibria either in the static context of a stone-age economy or in the dynamic context of a jungle economy, given in the latter the presence of farsightedness. Nevertheless, such equilibria are found here to exist even under myopia and regardless the presence of lexicographic preferences. We first detect them within a fully private social economy, and we next qualify them by introducing the Judiciary as state officials. The optimality regarding state finances imposes additional restrictions in establishing myopic non-coercive equilibria. In any case, an equilibrium will be stable if it is not influenced by the homotheticity or not of the preferences, i.e. by income distribution considerations. So, any suboptimal behaviour of the Judiciary should be attributed exclusively to the suboptimality of state finances: Macroeconomics does affect law administration.

Suggested Citation

  • Gerasimos T. SOLDATOS, 2015. "Law, Coercion And Socioeconomic Equilibrium," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 16, pages 39-50, December.
  • Handle: RePEc:aic:revebs:y:2015:d:16:soldatosg
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    References listed on IDEAS

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    More about this item

    Keywords

    Myopic law preferences; Non-coercive allocations; Homotheticity; Judiciary;
    All these keywords.

    JEL classification:

    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General

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