Law without the State: Legal Attributes and the Coordination of Decentralized Collective Punishment
11 Feb 2013-Journal of Law and Courts (University of Chicago PressChicago, IL)-Vol. 1, Iss: 1, pp 3-34
Abstract: 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 that does not account for the distinctive attributes of legal order as compared with other forms of social order. Drawing on a model developed elsewhere, we reinterpret key case studies to demonstrate how a theoretically informed approach illuminates questions about the emergence, stability, and function of law in supporting economic and democratic growth.
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01 Jan 2011TL;DR: In this article, a case study about a services coalition in a developing country that provides a viable solution to developing the services sector in a country is presented. The focus of the case study is Barbados, a very small island (166 square miles) in the Caribbean with a population of 280,000 people.
Abstract: This case study is about a services coalition in a developing country that provides a viable solution to developing the services sector in a country. The focus of the case study is Barbados, a very small island (166 square miles) in the Caribbean with a population of 280,000 people. Services constitute 84 per cent of the island’s GDP. Services also constitute two-thirds of the world’s economy and form the fastest growing component of world trade.
64 citations
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TL;DR: In this article, the authors canvas literature in the social sciences to identify the themes and gaps in the existing accounts and conclude that this literature has failed to produce a microfoundational account of the phenomenon of legal order.
Abstract: 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. We conclude that this literature has failed to produce a microfoundational account of the phenomenon of legal order. We then discuss our recent effort to develop the missing microfoundations of legal order to provide a better framework for future work on the rule of law.
58 citations
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TL;DR: In this article, the authors canvas literature in the social sciences to identify the themes and gaps in the existing accounts and conclude that this literature has failed to produce a microfoundational account of the phenomenon of legal order.
Abstract: 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. We conclude that this literature has failed to produce a microfoundational account of the phenomenon of legal order. We then discuss our recent effort to develop the missing microfoundations of legal order to provide a better framework for future work on the rule of law.
52 citations
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TL;DR: In this paper, the authors apply the concept of "efficient anarchy" to legal titling in rural Afghanistan, and show that anarchy of land governance is a better option than legal Titling.
Abstract: Scholars and policymakers prescribe legal titling to improve prospects for economic development and political order However, a public choice literature exists that has long recognized that self-governance often works well and that the state may not be able to improve upon local economic institutions at reasonable cost Although the implication that legal titling should proceed with caution is seemingly straightforward, the literature on legal titling does not take anarchy seriously as a policy option In addition, there is a public choice literature that presumes the state is the most important source of property rights This essay fills this gap in the property rights literature by applying the concept of “efficient anarchy” to legal titling in Afghanistan Original fieldwork evidence from rural Afghanistan suggests that anarchy of land governance is a better option than legal titling The essay concludes by opening up the black box of state building by explaining why it often makes sense to sequence improvements in political capacity and political constraints prior to investing in legal titling
48 citations
References
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01 Feb 2011TL;DR: In this paper, a survey of merchant guilds, efficiency, and social capital is presented, along with an overview of the main features of a merchant guild and its role in economic development.
Abstract: 1. Merchant guilds, efficiency, and social capital 2. What was a merchant guild? 3. Local merchant guilds 4. Alien merchant guilds and companies 5. Merchant guilds and rulers 6. Commercial security 7. Contract enforcement 8. Principal-agent problems 9. Information 10. Price volatility 11. Institutions, social capital and economic development.
107 citations
"Law without the State: Legal Attrib..." refers background in this paper
...…may have worked too well: by the mid-13th century, merchants were clamoring for relief from responsibility for the debts of their community members ðOgilvie 2011Þ. Law without the State | 25 can sustain an equilibrium based exclusively on decentralized collective punishment of the type that…...
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...Ogilvie ð2011Þ emphasizes, rightly we think, the multiplicity of enforcement institutions available to medieval merchants....
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TL;DR: The authors argue that culture matters in solving collective-action problems in the California gold fields and that cultural concepts of fairness served to create norms and institutions that miners were willing to defend, which included majority rule, election of officials, trial by jury, allocation of a first-come, first-served basis and rules for working claims.
Abstract: Earlier accounts of the creation of property rights in the California gold fields ignored culture and are incomplete. We argue that culture matters in solving collective-action problems. Such problems in the California gold fields were solved through reliance on cultural focal points. Focal points included individualism, equality, respect for property, and rewards commensurate to work. Cultural concepts of fairness served to create norms and institutions that miners were willing to defend, which included majority rule, election of officials, trial by jury, allocation of a first-come, first-served basis and rules for working claims.
105 citations
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TL;DR: In this article, the authors examine the nature of contract choice by employing the tools of price theory and try to explain the choice of contracts observed among gold miners during the California gold rush of 1848-1850.
Abstract: EVERY time an exchange takes place between two or more people there is a contract, either explicit or implicit. These contracts can take a variety of forms which are subject to the discretion of the contracting parties. The purpose of this paper is to examine the nature of contract choice by employing the tools of price theory. In particular (using a model developed by Cheung1), I will try to explain the choice of contracts observed among gold miners during the California gold rush of 1848-1850. In his 1969 article, Cheung developed one of the first theories of contract choice. The basic proposition set forth in his paper is that individuals, in choosing between a fixed rent or a sharing contract, will select the one which minimizes risk (defined here as the variance in income), but their choice is subject to the constraint of positive transaction costs. While I will use the same methodology as Cheung and, indeed, the same theoretical proposition, there are at least three significant differences which will require modifications of the analysis. First, Cheung's model explicitly assumes that property rights to all the factors of production are clearly delineated. However, as I will show later, this assumption cannot be used when examining contract choice in the California gold fields. Because the mineral lands were a nonexclusive resource, the theory must take into account the additional costs of privately maintaining exclusive rights. Second, Cheung's model was constructed to explain contract choice in agriculture, and so his discussion emphasized the problems in contracting in this particular industry. Yet, his theory suggests that the costs of contracting will be a function of both the production technology and the nature of the product itself. Therefore, a careful examination of the characteristics of gold and the
101 citations
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TL;DR: The relation between the Rule of Law (or legality) and the work we do in general jurisprudence on the concept of law has been explored and connected by.
Abstract: This article explores and connects two issues: (1) the relation between the Rule of Law (or legality) and the work we do in general jurisprudence on the concept of law; and (2) the distinction between conceptions of the Rule of Law that emphasize certainty, rules, and predictability and conceptions of the Rule of Law that also emphasize procedure and argument, even when legal argumentation detracts from the certainty emphasized the first set of conceptions. It argues (1) in favour of a more demanding understanding of what law is (informed by the ideal of the Rule of Law) and against "casual positivism" that takes almost any instance of centralized command and control as a legal system. And it argues (2) in favour of a procedural and argumentative conception of the Rule of Law. It connects the two arguments by observing that casual positivism is commonly associated with an impoverished rule-oriented understanding of the Rule of Law is associated commonly; and (following Dworkin and MacCormick) it suggests that a jurisprudence that emphasizes the role of legal argumentation and the institutions that sponsor it, will inevitably bring our conceptions of law and legality very close together.
101 citations
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TL;DR: In this paper, the authors consider a game with multiple equilibria and show that the rational supply of justice is essentially connected with questions of multiple equilibrium in games and argue that the foundations of any social institution may be understood in terms of more fundamental games that have multiple equilibrium.
Abstract: Schelling's concept of the focal-point effect in games with multiple equilibria is among the most important ideas in social theory. When justice is recognized as a criterion for identifying focal equilibria, we see how justice can affect the rational behavior of selfish economic actors. The foundations of political institutions can be understood in terms of focal equilibrium selection in a more fundamental game. This paper probes these ideas with some simple game-theoretic examples. Multiple equilibria are analyzed in a rival-claimants game, and this coordination game is extended to simple models of property rights, political institutions, boundaries, and economic investment. I. INTRODUCTION How can justice influence the decisions of a rational economic agent? In this paper, I seek a fundamental perspective on this question by considering some simple game-theoretic models where people's treatment of each other may be rationally guided by considerations of justice. In particular, this paper argues that the rational supply of justice is essentially connected with questions of multiple equilibria in games. More broadly, I argue here that the foundations of any social institution may be understood in terms of more fundamental games that have multiple equilibria. Questions about the supply of justice are ancient in the literature of social philosophy. We may begin with a definition of justice cited in Book 1 of Plato's Republic: that justice is giving each person what is due to him.1 But it is difficult for economic theorists to accept Plato's subsequent suggestion that a good society could create an ample supply of justice simply by educating its rulers to love justice above all else. Such ideas of culturally-determined endogenous preferences are very hard to assimilate into economic analysis because they hold the potential of trivializing all our questions about designing or reforming social institutions. It is an economist's job to develop methodologies for analyzing how changes in the structure of institutions may affect people's behavior and welfare. In such questions, we do not want to assume that the problems of poverty could be solved simply by educating the poor to develop a taste for their plight. Virtually any institution could generate better social outcomes if everyone could be motivated solely by a benevolent desire to raise the aggregate welfare of the whole society. To avoid such trivialization of questions about institutional reforms, most economic analysis has been based on a restrictive assumption that individuals' fundamental motivations are generally selfish and materialistic. If an institution cannot perform well under such an assumption, then we have grounds for seeking to reform it. The great successes of economic analysis have been based on this approach. But if everyone is a selfish materialist, then how can anyone be motivated to treat another person better simply because such better treatment is justly "owed" to him? If there were only one decisionmaker in the world, then a person who does not intrinsically care about behaving justly could be induced to respond to demands of justice only if he were otherwise completely indifferent among his behavioral options. Such complete indifference could not provide more than a fragile basis for the supply of justice. But when we consider games with many decisionmakers, we often find multiple equilibria. That is, many different patterns of behavior among the players may be rationally sustained as unique best responses to each other. In such situations, criteria of justice may be a crucial determinant of each individual's rational behavior precisely because he expects everyone else's behavior to be influenced by the same concepts of justice. Thus, justice may be rationally supplied by selfish individuals because justice is a criterion for selecting among equilibria of a game. Although this point is simple, it may have been relatively neglected in economic literature because of a methodological bias against studying games that have many equilibria. …
100 citations