Norms and Law: Putting the Horse Before the Cart
28 Pages Posted: 15 Dec 2012
Date Written: December 1, 2012
Law and society scholars have long been fascinated with the interplay of formal legal and informal extralegal procedures. Unfortunately, the fascination has been accompanied by imprecision, and scholars have conceptually conflated two very different mechanisms that extralegally resolve disputes. One set of mechanisms might be described as the “shadow of the law,” made famous by seminal works by Professors Stewart Macaulay and Marc Galanter, in which social coercion and custom have force because formal legal rights are credible and reasonably defined. The other set of mechanisms, recently explored by economic historians and legal institutionalists, might be described as “order without law,” borrowing from Professor Robert Ellickson’s famous work. In this second mechanism, extralegal mechanisms — whether organized shunning, violence, or social disdain — replace legal coercion to bring social order and are an alternative to, not an extension of, formal legal sanctions.
One victim of conflating these mechanisms has been our understanding of industry-wide systems of private law and private adjudication, or private legal systems. Recent examinations of private legal systems have chiefly understood those systems as efforts to economize on litigation and dispute-resolution costs, but private legal systems are better understood as mechanisms that economize on enforcement costs. This is not a small mischaracterization. Instead, it reveals a deep misunderstanding of when and why private enforcement systems arise in a modern economy.
Keywords: private ordering, private legal systems, reputational exchange
JEL Classification: K12, L14, L22
Suggested Citation: Suggested Citation