Buchanan Hall (formerly Mason Hall), #D180
April 28, 2017, 01:30 PM to 10:30 AM
Across three chapters, my dissertation marries a market process perspective with traditional law and economics. By investigating the history of thought in modern law and economic analysis, the first paper argues that neoclassical economics inappropriately restricts the domain of law & economics. Chapter one, “Good Economics—Bad Law: A 40-Year Natural Experiment” utilizes Buchanan’s 1974 review of Richard Posner’s classic textbook to motivate how law and economics has evolved over the past 40 years under heavy neoclassical influence. By distinguishing between ‘efficiency’ as instrumental and final values in law & economics literature, the paper argues that neoclassical law and economics is only able to analyze laws within a given institutional context but unable to aid analysis or discussions over larger meta rules and constitutions.
The second chapter, “Dynamic Property Rights and The Market Process,” offers a case study on property rights to illustrate how the open ended discovery process taking place in markets requires complementary support from an open ended legal environment. The core argument is that creating and destroying new forms of property rights bundles is an essential entrepreneurial function overlooked in discussions on the market process. I present a case study on thirteenth century England and France to illustrate how property rights emerged differently under different legal regimes. Given this analysis, the chapter argues that open-ended law is complementary to an open-ended market process.
Chapter three, “Selective Enforcement and Rent Extraction,” argues that government inaction can be a tool for extracting rents. Specifically, politicians can harness government power to selectively enforce laws and threaten enforcement in exchange for compliance with their demands. Selective enforcement is an attractive rent extraction method for lawmakers because it increases the credibility of their threats, allows them economize on the legislative process, minimizes the amount of voters their actions might offend, and allows them to capitalize on the economies of scale and scope the states coercive power creates in an environment with selective enforcement. This mechanism suggests that zoning laws are ripe for selective enforcement, and this chapter provides a case study to support the thesis that observed selective enforcement in zoning is often rent extraction.