Law as a ByProduct: Theories of Private Law Production

Public lawmakers lack incentives to engage in a socially optimal amount of legal innovation. Private lawmaking is a potential solution to this problem. However, private lawmaking faces a dilemma: In order to be effective privately produced laws need to be publicly enacted, but under current law enactment eliminates the intellectual property rights that are essential to motivate private lawmakers. Because of this dilemma, much private lawmaking is done as a byproduct of other activities. The mixed incentives entailed in this "byproduct" approach make it a second-best response to the problems of public lawmaking. Potential solutions involve finding a better balance between public access and private rights.

JEL Classification: K10, 11, 12, 22, 34, 41, L22

Suggested Citation: Suggested Citation

Kobayashi, Bruce H. and Ribstein, Larry Edward, Law as a ByProduct: Theories of Private Law Production (July 13, 2011). JOURNAL OF LAW, ECONOMICS & POLICY, VOL. 9 (2013), pp. 521-567, Illinois Program in Law, Behavior and Social Science Paper No. LBSS11-27, Available at SSRN: https://ssrn.com/abstract=1884985 or http://dx.doi.org/10.2139/ssrn.1884985