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The common law process: Efficiency or order?

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  • Louis Alessi
  • Robert Staaf

Abstract

The common law applies to conflicts not covered by statutes or the U.S. Constitution. Because constitutional law and common law are applicable (common) to all members of the community, they both confront aggregation problems of the sort discussed by Buchanan and Arrow. p ]Recent writings in law and economics view the common law as an efficient process that promotes the evolution of efficient rules through an auction-like mechanism. Because the common law applies to all individuals, however, the auction analogy fails to cope with the problem of aggregating preferences. Moreover, the belief that the efficiency of the common law is enhanced by assigning disputed rights so as to lower transaction costs is also flawed. The common law provides a form of unanimity by allowing individuals to contract around the rule and provides order by maintaining transitivity, through the use of precedent, in the application of the rule to new situations. Copyright George Mason University 1991

Suggested Citation

  • Louis Alessi & Robert Staaf, 1991. "The common law process: Efficiency or order?," Constitutional Political Economy, Springer, vol. 2(1), pages 107-126, December.
    • Handle: RePEc:kap:copoec:v:2:y:1991:i:1:p:107-126
    DOI: 10.1007/BF02393228
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    References listed on IDEAS

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    1. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    2. De Alessi, Louis, 1983. "Property Rights, Transaction Costs, and X-Efficiency: An Essay in Economic Theory," American Economic Review, American Economic Association, vol. 73(1), pages 64-81, March.
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    Cited by:

    1. Alessi Louis De, 1998. "Reflections on Coase, Cost, and Efficiency," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 8(1), pages 5-26, March.
    2. Todd Zywicki, 2015. "Bruno Leoni's Legacy and Continued Relevance," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 30(Spring 20), pages 131-141.
    3. Eckardt, Martina, 1999. "The Evolution of the German Tort Law in the 19th Century - An Economic Analysis of the Evolution of Law," Thuenen-Series of Applied Economic Theory 23, University of Rostock, Institute of Economics.
    4. Louis Alessi, 1992. "Efficiency criteria for optimal laws: Objective standards or value judgements?," Constitutional Political Economy, Springer, vol. 3(3), pages 321-342, September.
    5. William F. Shughart, 2022. "On the Virginia school of antitrust: Competition policy, law & economics and public choice," Public Choice, Springer, vol. 191(1), pages 1-19, April.
    6. Eckardt, Martina, 2004. "Evolutionary approaches to legal change," Thuenen-Series of Applied Economic Theory 47, University of Rostock, Institute of Economics.
    7. Bruce Benson, 2006. "Contractual nullification of economically-detrimental state-made laws," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 19(2), pages 149-187, June.
    8. Louis De Alessi, 1994. "Reputation and the Efficiency of Legal Rules," Cato Journal, Cato Journal, Cato Institute, vol. 14(1), pages 11-21, Spring/Su.
    9. L. Van Den Hauwe, 1998. "Evolution and the Production of Rules—Some Preliminary Remarks," European Journal of Law and Economics, Springer, vol. 5(1), pages 81-117, January.
    10. William Blomquist & Elinor Ostrom, 2008. "Deliberation, learning, and institutional change: the evolution of institutions in judicial settings," Constitutional Political Economy, Springer, vol. 19(3), pages 180-202, September.
    11. Richard Wagner, 1992. "Crafting social rules: Common law vs. statute law, once again," Constitutional Political Economy, Springer, vol. 3(3), pages 381-397, September.

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