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Distributive Aspects of Legal Standards

Jacob Nussim

Bar-Ilan University - Faculty of Law

January 31, 2008

CLEA 2008 Meetings Paper

Externality-generating behavior is typically controlled by legal standards of behavior. A negligence tort regimes sets due care standards; a regulatory regime dictates regulatory standards of behavior. The principal purpose of these legal mechanisms is to control individual behavior. This study shows that, typically, these legal mechanisms generate an additional, incidental, distributive outcomes. In reality, tort victims as well as externality victims are heterogeneous in the potential harm they would suffer if injured, but potential injurers cannot observe ex ante individualized harm (for example, in cases of car accidents or pollution). Therefore, a uniform, rather than individualized, legal standard of behavior is applied in tort or under regulatory schemes. This paper shows that a negligence (or regulatory) regime with a uniform care standard redistributes among potential victims, whereas an equally (second-best) efficient strict liability regime does not. This overlooked observation instigates several normative implications.

Number of Pages in PDF File: 28

Keywords: tort, negligence, regulation, redistribution, tax, standards

JEL Classification: K13, K20, K34, H23

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Date posted: February 21, 2008 ; Last revised: May 1, 2009

Suggested Citation

Nussim, Jacob, Distributive Aspects of Legal Standards (January 31, 2008). CLEA 2008 Meetings Paper. Available at SSRN: https://ssrn.com/abstract=1095282 or http://dx.doi.org/10.2139/ssrn.1095282

Contact Information

Jacob Nussim (Contact Author)
Bar-Ilan University - Faculty of Law ( email )
Faculty of Law
Ramat Gan, 52900
972-3-531-7088 (Phone)
972-3-535-1856 (Fax)
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