Slaev and Daskalova, ‘Complex property rights and Coasean bargaining in natural resource management’

This paper contributes to the debate on whether private or common property rights are better for advancing the sustainable management of natural resources. This contest between public and private ownership is often exaggerated, we claim, because in the real world, complex entitlements with varying degrees of privateness/publicness prevail. Property rights belonging to families, companies, clubs, corporations, and communities are simultaneously common to the members/shareholders and private to the entities. We call these entitlements private-common entitlements. When we acknowledge this complexity, it becomes evident that neither private nor common ownership rights are alone responsible for resource depletion. Instead, depletion is caused by freeriding or evading the payment of the full price of natural resources. This invites Coase’s solution to resource allocation. Therefore, the key problem is whether and how Coasean bargaining is employed to allocate ownership over resources threatened by depletion. We contribute to the debate by showing that Coase’s approach promotes not only economically efficient but also ecologically sustainable resource management. Often, this approach would lead to the establishment of largely private property or control rights by largely collective/public entities. We apply this theoretical framework to the development of a ski resort in Pirin Mountain, Bulgaria.

Aleksandar D Slaev and Diliana Daskalova, Complex property rights and Coasean bargaining in natural resource management, Journal of Environmental Policy and Planning. Published online: 23 May 2020.

‘A New Kind of Public/Private Partnership’

Rory Van Loo, The New Gatekeepers: Private Firms As Public Enforcers, 106 Virginia Law Review 467 (2020). The cooperation of public and private actors to achieve public goals is not new. More than 80 years ago, Louis Jaffe lauded the longstanding and substantial involvement of private groups in the regulatory sphere. The scope, range, and legal significance of coordination between the public and private spheres have expanded since then. Modern governance is a complicated web of relationships between public and private actors, command and cooperative structures, and hard law versus soft guidance …” (more)

[Kristin Hickman, JOTWELL, 28 May]

‘Can the Adoption of the CISG Save the Commercial Relationship of Parties in India?’

“Commerce cannot thrive if contractual bargains are not enforced by law. Such enforcement has to be predictable, consistent and accessible. The parties need to be reassured that the law will protect the ‘benefit of their bargain’ or, in the alternative, provide suitable remedies. In a move affirming the ‘civil’ approach towards enforcement of contracts, the Government of India enacted the Specific Relief (Amendment) Act (Act) on August 1, 2018, to make specific relief effective and conducive for doing business in India …” (more)

[Ajar Rab and Siddharth Jain, Oxford Business Law Blog, 28 May]

Baumann, Friehe and Langenbach, ‘Fines versus Damages: Experimental Evidence on Care Investments’

This paper studies the differential effects of fines and damages on people’s investment in accident prevention. We report results from a laboratory experiment in which monetary payoffs are maintained across the two policy instruments. While standard theory predicts no difference in behavior, we find that potential injurers invest substantially more money in accident prevention when they are subject to damages instead of a fine. We discuss possible behavioral channels that may explain our findings.

Baumann, Florian and Friehe, Tim and Langenbach, Pascal, Fines versus Damages: Experimental Evidence on Care Investments (May 12, 2020). MPI Collective Goods Discussion Paper, No 2020/8.

‘Peer Review: A Casualty of the Pandemic?’

“I confess: even in the best of times, my first impulse upon spotting an email from a journal or book publisher or tenure and promotion committee that I just know is a request for peer review is not to rejoice at yet another chance to serve and sustain the Republic of Scholars. With so many other unexpected demands on our time – personal as well as professional – how could we not be expected to reply ‘Sorry; just can’t’, hit send, and return to whatever mishegas had been enveloping us? …” (more)

[Dan Ernst, Legal History Blog, 27 May]

Peter Jaffey, ‘Policy and principle and the character of private law’

Some commentators recognise a distinction between policy and principle and regard private law as exclusively a matter of principle. Variants of this approach are found in Dworkin and corrective justice and ‘rights’ theorists. For these commentators, the distinction is fundamental to the character of private law, and to its development through the common law. Other commentators, in particular proponents of policy-oriented accounts, including the economic analysis of law, deny that there is any basis for such a distinction. I discuss in outline some of the attractions and difficulties of these approaches, and I set out a version of the principle/policy distinction in terms of the ‘standpoint limitation’, which I argue determines the character of private law. I consider how the standpoint limitation gives rise to the characteristic structural features of private law, focussing on contract and negligence in tort. I also show how, on one approach to the common law, the standpoint limitation is implicit in ordinary common law reasoning.

Peter Jaffey, Policy and principle and the character of private law, Jurisprudence: An International Journal of Legal and Political Thought. Published online: 27 May 2020.

Bar-Gill and Ben-Shahar, ‘Rethinking Nudge: An Information-Costs Theory of Default Rules’

Policymakers and scholars – both lawyers and economists – have long been pondering the optimal design of default rules. From the classic works on ‘mimicking’ defaults for contracts and corporations to the modern rush to set ‘sticky’ default rules to promote policies as diverse as organ donations, retirement savings, consumer protection, and data privacy, the optimal design of default rules has featured as a central regulatory challenge. The key element driving the design is opt-out costs – how to minimize them, or alternatively how to raise them to make the default sticky. Much of the literature has focused on ‘mechanical’ opt-out costs – the effort people incur to select a non-default alternative. This focus is too narrow. A more important factor affecting opt-out is information – the knowledge people must acquire to make informed opt-out decisions. But, unlike high mechanical costs, high information costs need not make defaults stickier; they may instead make the defaults ‘slippery’. This counterintuitive claim is due to the phenomenon of uninformed opt-out, which we identify and characterize. Indeed, the importance of uninformed opt-out requires a reassessment of the conventional wisdom about Nudge and asymmetric or libertarian paternalism. We also show that different defaults provide different incentives to acquire the information necessary for informed opt-out. With the ballooning use of default rules as a policy tool, our information-costs theory provides valuable guidance to policymakers.

Bar-Gill, Oren and Ben-Shahar, Omri, Rethinking Nudge: An Information-Costs Theory of Default Rules (April 24, 2020). Harvard John M Olin Discussion Paper No 1031.

Robert Brain, ‘The Unnecessary Implied Warranty of Fitness for a Particular Purpose’

… This Article has three major substantive parts. Part II explains why the proper theory for fitness problems is through an express warranty theory. Part III traces a brief history of the fitness warranty in the King’s courts, demonstrating that even from its inception, express warranty was the proper theory to resolve fitness issues. In fact, the judges who decided the inaugural case ushering in the implied warranty of fitness held that the express warranty was the proper theory to decide the case. Part IV explains some beneficial collateral consequences of subjecting fitness problems to the express warranty analysis, including resolving some persistent failings of the Code that have long plagued courts and practitioners dealing with the fitness warranty. Finally, an appendix is attached, with suggested edits to the UCC to bring about the changes suggested by this Article …

Robert D Brain, The Unnecessary Implied Warranty of Fitness for a Particular Purpose, 23 Chapman Law Review 163 (2020).

David Ellerman, ‘Corporations!’

Corporations have been getting a bad rap lately. Many blame ‘corporations’ for a litany of ills that, upon closer examination, should be blamed on another institution. Our goal is to analyze a miscellany of fallacies concerning the Citizens United case, corporate personhood, the stakeholder theory, the affected interests principle, and finally ending with the deeper fallacies concerning the rights of capital that are embedded in the conventional economic theories of capital and corporate finance. In the last analysis, there is another institution that arguably is more at the root of the problems in the current economic system, namely the renting of human beings in the employment relation.

Ellerman, David, Corporations! (April 24, 2020).

Frederick Wilmot-Smith, ‘Illegality as a Rationing Rule’

Legal systems have limited resources; those resources have to be distributed, and ideally the distribution would be just. This paper considers the role of legal doctrines – and, in particular, the doctrine of illegality – to ration and distribute individuals’ access to the goods of a legal system. My conclusion is that the illegality doctrine cannot be justified, if it can be justified, by reference to these distributive ends.

Wilmot-Smith, Frederick, Illegality as a Rationing Rule (2018) in Green and Bogg (eds), Illegality After Patel v Mirza (2018).