Implementing the Law by Impartial Agents: An Exercise in Tort Law and International Law

Abstract:     
Lawmakers regularly delegate authority to agents. Such delegation is accompanied by mechanisms that attempt to ensure that the agents adhere to the will of the lawmakers. But these mechanisms are often ineffective or inefficient. Moreover, at times the very imposition of constraints distorts the agents' incentives and impels them to adopt skewed policies. We suggest that it is possible to reduce such wasteful enforcement costs by delegating authority to certain types of agents who will pursue the lawmaker's policies without constraints imposed by the lawmaker. In this Article we focus on agents who are impartial - but not indifferent! - and skillful enough to identify the proper course of action. The Article encompasses two main arguments. The normative argument is that when skillful and impartial agents can be identified, it makes sense to delegate to them decision-making powers with only limited constraints. Moreover, in such instances it may be more cost-effective to provide agents with incentives (or design agents, like administrative agencies) to act impartially rather than develop enforcement mechanisms to impose impartiality. The positive argument is that the law - sometimes explicitly and sometimes implicitly - is compatible with our normative argument in various fields. Although our argument is general in scope and applies to many areas of law, in this Article we begin by focusing on tort law and on international law. We distinguish five categories of cases where the law relies on agents and detect in some of them impartial and skillful agents. This analysis demonstrates that, in some of these categories, the law in fact relies on agents with only minimal constraints and that, in other situations, the constraints imposed by the law are counterproductive. Our normative argument thus serves an explanatory role in understanding many legal doctrines and principles, but, at the same time, offers a critical view on other doctrines and principles, which are not compatible with that argument.

Number of Pages in PDF File: 37

Keywords: Impartiality, conflict of interests, tit-for-tat, negligence, agency costs, enforcement costs, outcome interest, accuracy interest, reciprocity interest, enforcement of the law

JEL Classification: K10, K13, K33, K42

Accepted Paper Series