Sources of Law and the Institutional Design of Lawmaking
University of Minnesota - Law School; University of Bologna
Journal of Public Finance and Public Choice, Vol. 19, Nos. 2-3, 2001, pp. 95-122
George Mason Law & Economics Research Paper No. 00-42
This paper considers the relative advantages and the respective limits of three main sources of law, namely, (a) legislation; (b) judge-made law; and (c) customary law. The traditional presentation of sources of law is revisited, considering the important issue of institutional design of lawmaking through the lens of public choice theory. This functionalist approach to legal analysis sheds new light on the process of law formation, emphasizing various criteria of evaluation, which include: (i) the minimization of agency problems; (ii) the minimization of direct and external rulemaking costs; and (iii) the stability and transitivity of collective outcomes.
Number of Pages in PDF File: 35
JEL Classification: K100
Date posted: November 29, 2000