LAW AND ECONOMICS AND THE ECONOMICS OF LEGAL REGULATION

Transcription

1 LAW AND ECONOMICS AND THE ECONOMICS OF LEGAL REGULATION

2 INTERNATIONAL STUDIES IN ECONOMICS AND ECONOMETRICS Volume Harder T: Introduction to Mathematical Models in Market and Opinion Research With Practical Applications, Computing Procedures, and Estimates of Computing Requirements. Translated from the German by P.H. Friedlander and E.H. Friedlander Heesterman ARG: Forecasting Models for National Economic Planning Heesterman ARG: Allocation Models and their Use in Economic Planning Durdag M: Some Problems of Development Financing. A Case Study of the Turkish First Five-Year Plan, Blin JM: Patterns and Configurations in Economic Science. A Study of Social Decision Processes Merkies AHQM: Selection of Models by Forecasting Intervals. Translated from the Dutch by M. van Holten-De Wolff Bos HC, Sanders M and Secchi C: Private Foreign Investment in Developing Countries. A Quantitative Study on the Evaluation of its Macro-Economic Impact Frisch R: Economic Planning Studies Selected and Introduced by Frank Long. Preface by Jan Tinbergen Gupta KL: Foreign Capital, Savings and Growth. An International Crosssection Study Bochove CA van: Imports and Economic Growth Bjerkholt 0, Offerdal E (eds.): Macroeconomic Prospects for a Small Oil Exporting Country Weiserbs D (ed.): Industrial Investment in Europe: Economic Theory and Measurement Graf von der Schulenburg J-M, Skogh G (eds.): Law and Economics & The Economics of Legal Regulation

3 Law and Economics and The Economics of Legal Regulation edited by J.-Matthias Graf von der Schulenburg (Wissenschaftszentrum Berlin) Goran Skogh (University of Lund) 1986 KLUWER ACADEMIC PUBLISHERS DORDRECHT I BOSTON I LANCASTER

4 Distributors for the United States and Canada: Kluwer Academic Publishers, P.O. Box 358, Accord Station, Hingham, MA , USA for the UK and Ireland: Kluwer Academic Publishers, MTP Press Limited, Falcon House, Queen Square, Lancaster LAI lrn, UK for all other countries: Kluwer Academic Publishers Group, Distribution Center, P.O. Box 322, 3300 AH Dordrecht, The Netherlands Book-information Selected papers of a Conference of the International Institute of Management Wissenschaftszentrum Berlin Library of Congress Cataloging in Publication Data Law and economics and the economics of legal regulation. (International studies in economics and econometrics ; 13) "Selected papers of a conference of the International Institute of Management Wissenschaftszentrum Berlin." Includes index. Contents: Law and economics and the economics of legal regulation I Goran Skogh -- Efficiency. equity, and inalienability I Susan Rose-Ackerman -- Negotiated settlement I Gordon Tullock -- [etc.] 1. Law--Congresses. 2. Economics--Congresses. 3. Industrial laws and legislation--congresses. 1. Schulenburg, Johann-Matthias, Craf von der. II. Skogh, Goran Ill. International Institute of Management. IV. Series: International studies in economics and econometrics i v. 13. K481.E3L ' ISBN-13: : / e-isbn-13: Copyright 1986 by Martinus Nijhoff Publishers, Dordrecht. Softcover reprint of the hardcover 15t edition 1986 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publishers, Martinus Nijhoff Publishers, P.O. Box 163, 3300 AD Dordrecht, The Netherlands.

5 CONTENTS Acknowledgement List of contributors vii viii PART!. INTRODUCTION 1. Law and Economics and the Economics of Legal Regulation 3 Goran Skogh PART II. LAW AND ECONOMICS 2. Efficiency, Equity and Inalienability 11 Susan Rose-Ackerman 3. Negotiated Settlement 39 Gordon Tullock 4. Economic Efficiency and the Common Law: A Critical Survey 51 Peter H. Aranson 5. Default Risk and the Optimal Pricing of Court Enforcement Services 85 Hugh Gravelle 6. Transaction Cost and Communication 113 Michael Hutter PART III. ECONOMICS OF LEGAL REGULATION 7. Regulatory Measures to Enforce Quality Production of Self-

6 Employed Professionals - a theoretical study of a dynamic market process 133 J.-Matthias Graf v.d. Schulenburg 8. Controlling Insider Trading in Europe and America: The Economics of the Politics 149 David D. Haddock & Jonathan R. Macey 9. The Regulation of Shop Opening Hours in the United Kingdom 169 Susan M. Jaffer & John A. Kay 10. Belgian Pulbic Policy Towards the Retailing Trade 185 Roger Van den Bergh 11. Assessing the Effectiveness of Economic Efficiency of an E.E.C. Pollution Control Directive: The Control of Discharges of Mercury to the Aquatic Environment 207 John Ashworth, Ivy Papps & David J. Storey Participants of the Conference on Law and Economics, Berlin 227 Index 229

7 ACKNOWLEDGEMENT On June , 1985 the International Institute of Management of the Wissenschaftszentruin Berlin organized a conference on "Law and Economics of Legal Regulation". This conference was held in connection with the Annual Meeting of the European Association of Law and Economics. At the conference forty papers were presented focusing on the principles of the economics of law, antitrust regulations, economic aspects of public decision processes, the theory of property rights, health economics, and regulations to protect the environment. Employing an anonymous referee-process, eleven papers were selected for publication in this volume. The selection resulted from the idea of offering high-quality papers, presented at the conference, to a larger audience. The papers document the latest developments in the research on law and economics and will enhance further research in this field. We would like to thank the participants and contributors and regret that we can not include more of the interesting papers presented at the conference. Special thanks are due to Meinolf Dierkes, President of the Wissenschaftszentrum Berlin, and Manfred Fleischer, International Institute of Management, for their support. We are also very grateful to those who have served as referees. J.-Matthias v.d. Schulenburg Berlin Goran Skogh Lund Vll

8 LIST OF CONTRIBUTORS Peter H. Aranson is Professor of Economics at Emory University. He received his PhD in Political Science from the University of Rochester (1972). His research encompasses related issues in the fields of Public Choice and Law and Economics. He serves as co-editor of Public Choice and formerly served as editor of the Supreme Court Economic Review. He is a member of the Editorial Board of the Journal of Politics. His publications include "American Government: Strategy and Choice", "Judicial Control of the Political Branches: Public Purposes and Public Law", The Cato Journal (Winter 1985), and "A Theory of Legislative Delegation", Cornell Law Review (November 1982) (with E. Gellhorn and G.O. Robinson). John Ashworth is Lecturer in Economics, University of Durham, England since Roger Van den Bergh is Doctor of Law at the University of Antwerp (1982). His doctoral research focused on "Buying Power and Price Discrimination". He is Professor of Business Law at the Antwerp Business School (Handelshogeschool) and Assistant Professor at the Law School of the University of Antwerp (U.I.A.). He has published several books and articles on Belgian and European Competition Law. His current research is in the area of the economics of Belgian law. Hugh S.E. Gravelle is Reader in Economics at Queen Mary College, University of London. He has published papers on public enterprise, health economics, uncertainty and the economics of law. His current research interests include the pricing of court services, unemployment and suicide and the evaluation of breast cancer screening. viii

9 IX David H. Haddock is Associate Professor of Economics at Emory University, Atlanta, and a Research Professor at the Emory University Law and Economics Center. He is a specialist in both the economic analysis of law and industrial organization. Since receiving a PhD in 1980 from the University of Chicago, he has published articles examining delivered pricing systems, negligence standards in torts, securities regulation, punitive damages, and property rights. Before moving to Emory, he worked at UCLA and Ohio State University. During the academic year, he was a Research Fellow in Civil Liability at the Yale Law School, where much of the work on the paper included here was completed. Michael Hutter is Assistant Professor of Economics at the University of Munich. He holds an M.A. degree from the University of Washington (Seattle) and received his doctorate from the University of Munich. He has published in the areas of law and economics, history of economic thought, competition theory, health economics and economics of the arts. Susan M. Jaffer studied economics and accountancy at the University of Melbourne, and has worked as a chartered accountant. From 1983/5 she was Research Officer at the Institute for Fiscal Studies, London, where her research concerned issues in the economics of regulation. She is now an econometrician researcher in the London Office of National Economic Research Associates. John A. Kay is Director at the Institute for Fiscal Studies, London, and a Fellow of St. John's College, Oxford. He taught economics at Oxford University before taking up his present appointment. He is joint author ofthe British Tax System, now in its fourth edition and of Concentration in Modern Industry and the reform of Social Security. He has published work on industrial economics and fiscal policy. Jonathan R. Macey is Visiting Professor of Law at the University of Virginia Law School and Associate Professor of Law at Emory University School of Law where he is also Senior Academic Member ofthe Law and Economic Center. He received his A.B. in 1977 from Harvard University and his J.D. in 1982 from Yale Law School. He has published articles in the fields of corporate law, banking regulation, law and economics, and the economics of regulation. Ivy Papps is Lecturer in the Economics of the Middle East, Department of Economics, University of Durham, England since 1975.

10 x Susan Rose-Ackerman is Professor of Law and Political Economy at Columbia University and Director of Columbia Law School's Center for Law and Economic Studies. She is co-author of "The Uncertain Search for Environmental Policy" (1974), the author of "Corruption: A Study in Political Economy" (1978), and a writer of numerous articles in professional journals. Her current work involves the relationship between administrative law and social science. J.-Matthias Grafv.d. Schulenburg is currently on leave from the University of Munich and Research Fellow at the International Institute of Management of the Wissenschaftszentrum Berlin. He holds a master's degree in economics from the University of Gottingen and received his doctorate from the University of Munich. In he was a Visiting Fellow at the Woodrow Wilson School of International and Public Affairs at Princeton University. His publications are in the fields of risk and insurance, health economics and international monetary theory. Goran Skogh is Associate Professor at the University of Lund and President of the European Association of Law and Economics. His dissertation "Straffditt och Samhallsekonomi" (Penal law and Economics), Lund Economic Studies, was published in He edited "Law and Economics: Report from a symposium in Sweden", Societatis Juridicae Lundensis, no 28, After that he has published work on the economics of crime, liability, regulation and insurance. David J. Storey is Principal Research Associate at the Centre for Urban and Regional Development Studies, University of Newcastle upon Tyne,. England. Gordon Tullock graduated from the University of Chicago Law School in He then spent ten years in the Diplomatic Service, specializing on China. Since 1958 he has held various academic appointments. Currently he is Harris Distinguished University Professor at George Mason University. He is a past-president ofthe Southern Economic Society and of the Public Choice Society. He is author of numerous books and articles, arid Editor of Public Choice.