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The Negligence Rule in the Presence of Judicial Corruption and Social Norms

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  • Juin-jen Chang
  • Chia-ying Liu

Abstract

This paper investigates the phenomenon of judicial corruption and incorporates it into Polinsky, A. M. (1980). Strict liability vs. negligence in a market setting. American Economic Review, 70, 363–367 framework so as to analyze the efficiency of the negligence rule. By shedding light on the role of social norms in regard to the phenomenon of judicial corruption, this analysis provides implications for policy. First, more prevalent corruption at the status quo tends to intensify the extent of the corruption itself and, as a result, the effectiveness of the government’s corruption enforcement is greatly lessened. This implies that an excessively lenient policy of corruption may result in an uncontrollable consequence; once corruption becomes rampant, it is costly to bring it down. Of great importance, in the presence of such a corruption effect, the social optimum cannot be achieved based on the negligence rule and the equivalence between the strict liability and negligence rule fails. Secondly, the attitude of the society toward a corrupt judge plays a crucial role in governing the effectiveness of an efficient wage arrangement. If the society can fully accept a corrupt judge, corruption will never be controlled even with the incentive wage scheme. Copyright International Atlantic Economic Society 2007

Suggested Citation

  • Juin-jen Chang & Chia-ying Liu, 2007. "The Negligence Rule in the Presence of Judicial Corruption and Social Norms," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(2), pages 203-215, June.
    • Handle: RePEc:kap:atlecj:v:35:y:2007:i:2:p:203-215
    DOI: 10.1007/s11293-007-9068-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Judicial corruption; Negligence rule; Social norms; K13; K42;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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