Law Commons^™

Scaffolding: Using Formal Contracts To Build Informal Relations To Support Innovation, Gillian K. Hadfield, Iva Bozovic

Gillian K Hadfield

Building Legal Order In Ancient Athens, Federica Carugati, Gillian K. Hadfield, Barry Weingast

Gillian K Hadfield

How do democratic societies establish and maintain order in ways that are conducive to growth? Contemporary scholarship associates order, democracy, and growth with centralized rule of law institutions. In this article, we test the robustness of modern assumptions by turning to the case of ancient Athens. Democratic Athens was remarkably stable and prosperous, but the ancient city-state never developed extensively centralized rule of law institutions. Drawing on the “what-is-law” account of legal order elaborated by Hadfield and Weingast (2012),we show that Athens’ legal order relied on institutions that achieved common knowledge and incentive compatibility for enforcers in a largely decentralized …

The Cost Of Law: Promoting Access To Justice Through The (Un)Corporate Practice Of Law, Gillian K. Hadfield

Gillian K Hadfield

The U.S. faces a mounting crisis in access to justice. Vast numbers of ordinary Americans represent themselves in routine legal matters daily in our over-burdened courts. Obtaining ex ante legal advice is effectively impossible for almost everyone except larger corporate entities, organizations and governments. In this paper, I explain why, as a matter of economic policy, it is essential that the legal profession abandon the prohibition on the corporate practice of law in order to remedy the access problem. The prohibitions on the corporate practice of law rule out the use of essential organizational and contracting tools widely used in …

Microfoundations Of The Rule Of Law, Gillian K. Hadfield, Barry R. Weingast

Gillian K Hadfield

Many social scientists rely on the rule of law in their accounts of political or economic development. Many however simply equate law with a stable government capable of enforcing the rules generated by a political authority. As two decades of largely failed efforts to build the rule of law in poor and transition countries and continuing struggles to build international legal order demonstrate, we still do not understand how legal order is produced, especially in places where it does not already exist. We here canvas literature in the social sciences to identify the themes and gaps in the existing accounts. …

Constitutions As Coordinating Devices, Gillian K. Hadfield, Barry R. Weingast

Gillian K Hadfield

Why do successful constitutions have the attributes characteristically associated with the rule of law? Why do constitutions involve public reasoning? And, how is such a system sustained as an equilibrium? In this paper, we adapt the framework in our previous work on “what is law?” to the problem of constitutions and their enforcement (see Hadfield and Weingast 2012, 2013a,b). We present an account of constitutional law characterized by two features: a system of distinctive reasoning and process that is grounded in economic and political functionality; and a set of legal attributes such as generality, stability, publicity, clarity, non-contradictoriness, and consistency. …

Democracy, Courts And The Information Order, Gillian K. Hadfield, Dan Ryan Jr.

Gillian K Hadfield

Conventional wisdom about civil litigation, both among scholars and political actors, holds that abuse of the legal process is common, that there is too much litigation, that it is “all about the money,” and that “a bad settlement is better than a good trial.” This constellation of attitudes that emphasize the economic function of law suggests that courts are an expensive conflict resolution mechanism of last resort and that their use would be minimized in a healthy market-based democracy. In this paper we apply a new sociological framework to understand the meaning and function of civil litigation in a democratic …

Law Without The State: Legal Attributes And The Coordination Of Decentralized Collective Punishment, Gillian K. Hadfield, Barry R. Weingast

Gillian K Hadfield

Most economic and positive political theory presumes the existence of an effective legal regime (protecting property rights or implementing legislative or judicial choices, for example). Yet social science has devoted little systematic attention to the question of what constitutes distinctively legal order. Most social scientists take for granted that law is defined by the presence of a centralized authority capable of exacting coercive penalties for violations of legal rules. Moreover, the existing approach to analyzing law in economics and positive political theory works with a very thin concept of law, one that does not account for the distinctive attributes of …

Rational Reasonableness: Toward A Positive Theory Of Public Reason, Gillian K. Hadfield, Stephen Macedo

Gillian K Hadfield

Why is it important for people to agree on and articulate shared reasons for just laws, rather than whatever reasons they personally find compelling? What, if any, practical role does public reason play in liberal democratic politics? We argue that the practical role of public reason can be better appreciated by examining the structural similarities in normative and positive political theory. Specifically, we consider the analytical parallels between Rawls’ account of political liberalism and a rational choice model of legal order recently proposed by Hadfield & Weingast (2011). The positive model proposes that a shared system of reasoning—a common logic—plays …

What Is Law? A Coordination Model Of The Characteristics Of Legal Order, Gillian K. Hadfield, Barry R. Weingast

Gillian K Hadfield

Legal philosophers have long debated the question, what is law? But few in social science have attempted to explain the phenomenon of legal order. In this article, we build a rational choice model of legal order in an environment that relies exclusively on decentralized enforcement, such as we find in human societies prior to the emergence of the nation state and inmanymodern settings.Wedemonstrate thatwecan support an equilibrium in which wrongful behavior is effectively deterred by exclusively decentralized enforcement, specifically collective punishment. Equilibrium is achieved by an institution that supplies a common logic for classifying behavior as wrongful or not. We …

Producing Law For Innovation, Gillian K. Hadfield

Gillian K Hadfield

In this chapter I first discuss why we need to think of legal infrastructure as economic infrastructure requiring focused economic policymaking, what is wrong with our existing legal infrastructure and why we need to change our modes of legal production. I then set out a vision of what greater reliance on market-based production of legal infrastructure could look like. Finally, I suggest some concrete steps that policymakers can take to move us toward a more open, competitive system of legal production. These include 1) opening up access to the provision of legal services, such as by establishing a federal licensing …

Producing Law For Innovation, Gillian K. Hadfield

Gillian K Hadfield

In this contribution to the forthcoming Rules for Growth prepared by the Kauffman Task Force on Law, Innovation and Growth, I first discuss why we need to think of legal infrastructure as economic infrastructure requiring focused economic policymaking, what is wrong with our existing legal infrastructure and why we need to change our modes of legal production. I then set out a vision of what greater reliance on market-based production of legal infrastructure could look like. Finally, I suggest some concrete steps that policymakers can take to move us toward a more open, competitive system of legal production. These include …

The Dynamic Quality Of Law: The Role Of Judicial Incentives And Legal Human Capital In The Adaptation Of Law, Gillian K. Hadfield

Gillian K Hadfield

Much of the existing literature investigating the relationship between legal regimes and economic growth focuses on the agency problem of aligning judicial incentives with social welfare. In this paper I look instead at the factors that in‡fluence the quality of law when judges have incentives to promote social welfare but they have limited knowledge about the environment in which law is to be applied. The key insight is that the capacity for a legal regime to generate value-enhancing legal adaptation to local and changing conditions depends on its capacity to generate and implement adequate expertise about the environment in which …

Higher Demand, Lower Supply? A Comparative Assessment Of The Legal Landscape For Ordinary Americans, Gillian K. Hadfield

Gillian K Hadfield

In this paper I review the small amount of available data on the extent to which ordinary individuals in the U.S. have access to legal resources to navigate the law-thick world that Robert Kagan has famously called ‘adversarial legalism—the American way of law.’ I present this data in comparative context, relating what (little) we know about the availability of law in the U.S. to what (little) we know about the availability of law in other advanced societies and in countries transitioning to legally-mediated market democracy. I review first a set of ‘legal needs’ surveys that ask households about their experiences …

The Role Of International Law Firms And Multijural Legal Human Capital In The Harmonization Of Legal Regimes, Gillian K. Hadfield

Gillian K Hadfield

The problem of harmonizing legal rules across multiple overlapping legal orders is, in part, a problem of knowledge. If the public goal of harmonization is to promote value in transactions and dispute resolution, a legal regime needs institutions that facilitate the production of multijural human capital: expertise about how legal rules interact with each other and with the environment in which economic actors design transactions and dispute processing mechanisms. Because much of this expertise is embedded with the actors involved in transactions and disputes, the production of expertise has to be supported by adequate incentives for private actors to invest …

The Dynamic Quality Of Law: The Role Of Judicial Incentives And Legal Human Capital In The Adaptation Of Law, Gillian K. Hadfield

Gillian K Hadfield

Much of the existing literature investigating the relationship between legal regimes and economic growth focuses on the agency problem of aligning judicial incentives with social welfare. In this paper I look instead at the factors that influence the quality of law when judges have incentives to promote social welfare but they have limited knowledge about the environment in which law is to be applied. The key insight is that the capacity for a legal regime to generate value-enhancing legal adaptation to local and changing conditions depends on its capacity to generate and implement adequate expertise about the environment in which …

The Public And The Private In The Provision Of Law For Global Transactions, Gillian K. Hadfield

Gillian K Hadfield

In this essay, I revisit the public/private divide in order to explore more fully the potential for private production of law in global exchange and also to clarify what I think are differences in the way common law and civil legal scholars think about the public and the private in law.

The Strategy Of Methodology: The Virtues Of Being Reductionist For Comparative Law, Gillian K. Hadfield

Gillian K Hadfield

In this comment I respond to three comments by comparative legal scholars on my paper "Levers of Legal Design: Institutional Determinants of the Quality of Law." In this comment I respond to concerns about the potential for the reductionist methodology employed by economist to illuminate issues in comparative law, particularly in light of commitments in comparative legal scholarship to deep understanding of culture and respect for different legal systems.

Framing The Choice Between Cash And Courthouse: Experiences With The 9/11 Victim Compensation Fund, Gillian K. Hadfield

Gillian K Hadfield

In this paper I report the results of a quantitative and qualitative empirical study of how those who were injured or lost a family member in the September 11, 2001 terrorist attacks evaluated the tradeoff between a cash payment--available through the Victim Compensation Fund--and the pursuit of litigation. Responses make it clear that potential plaintiffs saw much more at stake than monetary compensation and that the choice to forego litigation required the sacrifice of important non-monetary, civic, values: obtaining and publicizing information about what happened, prompting public findings of accountability for those responsible, and participating in the process of ensuring …

The Levers Of Legal Design: Institutional Determinants Of The Quality Of Law, Gillian K. Hadfield

Gillian K Hadfield

In the past decade a comparative law and economics literature has emerged that is largely organized around an effort to explain differences in country economic performance in terms of differences between common law and civil code systems. Assumptions about differences between common law and civil code regimes and the correspondence between legal regimes and judicial behavior are, however, still only weakly based in real institutional features of modern legal systems. In this paper, I examine the institutional determinants of the quality of law developed by a legal regime, drawing on a model from Hadfield (2006) which identifies five key parameters …

Don’T Forget The Lawyers: Legal Human Capital And The Role Of Lawyers In Supporting The Rule Of Law, Gillian K. Hadfield

Gillian K Hadfield

No abstract provided.

Judging Science: An Essay On The Unscientific Basis Of Beliefs About The Impact Of Law On Science And The Need For Better Data About Law, Gillian K. Hadfield

Gillian K Hadfield

No abstract provided.

The Many Legal Institutions That Support Contractual Commitment, Gillian K. Hadfield

Gillian K Hadfield

One of the fundamental contributions of transaction cost theory and institutional economics has been to focus attention on opening the "black box" of contract enforcement, drawing attention to the institutions required to achieve effective and low-cost contract enforcement. The idea that the effectiveness of contract law is critical to the growth of economic activity is widespread in the literature on development and transition economies. Recent studies attempting to document toe relative strength of contract enforcement in different settings (La Porta, et al., 19982; Djankov, et al., 2003), however, have focused on relatively abstract notions of "courts" and "legal systems" and …

Delivering Legality On The Internet: Developing Principles For The Private Provision Of Commercial Law, Gillian K. Hadfield

Gillian K Hadfield

No abstract provided.

Privatizing Commercial Law: Lessons From Icann, Gillian K. Hadfield

Gillian K Hadfield

No abstract provided.

The Price Of Law: How The Market For Lawyers Distorts The Justice System, Gillian K. Hadfield

Gillian K Hadfield

Why are lawyers so expensive? This paper explores the economics of the markets for lawyers and the reasons why pricing for lawyers departs from competitive pricing. Unlike conventional analyses, which emphasize entry restrictions, this analysis emphasizes market imperfections due to the nature of legal reasoning and practice and in particular the role of increasing returns to specialization and cognitive skill. The analysis also emphasizes the impact of market dynamics on the distribution of legal services, particularly high end legal work, between corporate and individual clients.

The Price Of Law, Gillian K. Hadfield

Gillian K Hadfield

No abstract provided.