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Title: Economic Efficiency and the Common Law.
Author : Atlantic Economic Journal
Release Date : January 01, 2004
Genre: Business & Personal Finance,Books,
Pages : * pages
Size : 249 KB

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Introduction Do legal rules based on the common law in the U.S. result in economically efficient outcomes? The evidence or what there is of it, seems to suggest otherwise. Tullock [1997] noted that while the precise social cost of legal disputes is unknown, it must be substantial and certainly much higher compared to developed economies. Tullock noted that in 1983, the U.S. federal, state, and local spending on civil and criminal justice amounted to almost $40 billion or about $170 per capita. This accounted for about 3 percent of total the U.S. government expenditures. Of this amount, $37 per capita was expended on judicial services [Cooter and Ulen, 1988, p. 478], which "amounts to only a small fraction of the social cost of resolving disputes though the courts, since most of these costs are borne by private parties" [Tullock 1997, p. 45]. Cooter and Ulen [1988] estimated that the labor cost of a full trial was about $400 per hour, not including the cost of court facilities. According to Tullock [1997, p. 52]: