Legal efficiency and consistency
Leonardo Felli and
Alessandro Riboni ()
European Economic Review, 2020, vol. 121, issue C
We analyze the efficiency and consistency of court decisions under common and civil law. As a leading example, we study the enforcement of property rights. Judges are of two types: some are conservative and follow the precedent or the statute, while others maximize social welfare. When courts intervene ex-post, after the relevant economic choices have been made, welfare-maximizing courts face a “commitment problem.” Such an ex-post bias has implications on the relative “consistency” and efficiency of each legal system. Surprisingly, we find that court decisions are more consistent under common law than under civil law. The welfare comparison between the two systems is, instead, ambiguous. However, in changing economic environments, common law is more likely to dominate civil law because of its greater adaptability.
Keywords: Property right protection; Legal origin; Time-Inconsistency; Investment; Legal adaptability (search for similar items in EconPapers)
JEL-codes: C79 D23 D86 K12 K13 (search for similar items in EconPapers)
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Working Paper: Legal Efficiency and Consistency (2018)
Working Paper: Legal Efficiency and Consistency (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:121:y:2020:i:c:s0014292119301837
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