Standardized Enforcement: Access to Justice vs. Contractual Innovation

Nicola Gennaioli and Enrico Perotti

No 652, Working Papers from Barcelona School of Economics

Abstract: We model the different ways in which precedents and contract standardization shape the development of markets and the law. In a setup where more resourceful parties can distort contract enforcement to their advantage, we find that the introduction of a standard contract reduces enforcement distortions relative to precedents, exerting two effects: i) it statically expands the volume of trade, but ii) it crowds out the use of innovative contracts, hindering contractual innovation. We shed light on the large scale commercial codification occurred in the 19th century in many countries (even Common Law ones) during a period of booming commerce and long distance trade.

Keywords: legal evolution; inequality; contracting; standardization (search for similar items in EconPapers)
JEL-codes: G3 K12 K41 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-law and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Standardized enforcement: Access to justice vs contractual innovation (2012)
Working Paper: Standardized Enforcement: Access to Justice vs Contractual Innovation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:652

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