The Continuing Debate on Equity and Efficiency in the Law: A Counter-Response to Kaplow and Shavell (2000)

Abstract:     
Almost all Law and Economic analysis evaluates legal rules solely on the basis of the efficiency criterion with no consideration of distributive justice. Recently, the rationale for this long standing practice has been called into question by scholars within the Law and Economics community. In response, proponents of pure efficiency have offered new counterarguments in an attempt to shore up the consensus methodology. This comment critically evaluates these counterarguments. It finds that they mischaracterize and misconceive the recent criticisms of pure efficiency. Assessing the overall debate, the comment concludes that Law and Economics' exclusive focus on efficiency continues to lack justification even within the limited purview of modern economic reasoning. [Note: The current version of this paper is incorporated into Parts III and IV of Deconstructing the New Efficiency Rationale, 86 Cornell L. Rev. 1003 (July 2001)]

Keywords: Optimal Taxation, Equity, Income Tax Only Results

JEL Classifications: K00, K34, K13, H21, H23

Working Paper Series