Harmonising Hayek and Posner: revisiting Posner, Hayek & the economic analysis of Law

Ojo, Marianne (2015): Harmonising Hayek and Posner: revisiting Posner, Hayek & the economic analysis of Law. Published in: Elsevier Journals (2016)

Abstract

This paper is aimed at highlighting Posner and Hayek’s consensus on the importance of decentralization, as well as the significance of the incorporation of non-legal actors as tools for facilitating the efficient allocation of resources in common law. In addition to highlighting the consensus on the views of Posner and Hayek, in respect of de centralization of information within the judicial process, this paper aims to address why de centralization serves as a vital tool in facilitating the objective of common law as an efficiency allocation mechanism. Whilst it is argued that lower court judges may not and should not be given such flexibility to make and unmake the law, the principles and decisions of law lords acting in the capacity of legislature, have also illustrated in several leading cases that the flexibility intended by Parliament may be misinterpreted and wrongly applied in future cases. This has also resulted in the criticism of extrinsic aids to statutory interpretation. This paper analyses and expands on these observations.

• Item Type: MPRA Paper
• Language: English
• Keywords: legitimate expectations; certainty; flexibility; judicial precedents; statutory interpretation; allocative efficiency; Pepper v Hart; Daubert; common law; regulatory capture; regulation
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles; G - Financial Economics > G3 - Corporate Finance and Governance; K - Law and Economics > K2 - Regulation and Business Law; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing

References

Ayres I. and Braithwaite J., (1992). Responsive Regulation: Transcending the Deregulation Debate Oxford University Press 1992

Boettke P. (2010). “Information and Knowledge: Austrian Economics in Search of its Uniqueness” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1537989

Brudney J, (2010). “The Story of Pepper v Hart: Examining Legislative History Across the Pond” Public Law and Legal Theory Working Paper Series No 124 May 6 2010 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1601291

Carlton D and Fischel D,“ The Regulation of Insider Trading” Stanford Law Review Volume 35 No 5 (May 1983) pp 857-895

Cooter, R.D. and Rubinfeld, D.L. (1994) “An Economic Model of Legal Discovery “ The Journal of Legal Studies, Vol. 23, No. 1, Economic Analysis of Civil Procedure (Jan., 1994), pp. 435-463 Published by: The University of Chicago Press for The University of Chicago Law School Stable URL: http://www.jstor.org/stable/724329

Cooter, R.D. and Rubinfeld, (1989) D. L. "Economic Analysis of Legal Disputes and Their Resolution" (1989) http://works.bepress.com/robert_cooter/30

Daubert v. Merrell Dow Pharmaceutical, Inc 509 U.S.579 (1993)

Gennaioli N and Shleifer A, “The Evolution of Common Law” Journal of Political Economy, 2007, vol. 115, no. 1

Grabosky P and Braithwaite J, Of Manners Gentle: Enforcement Strategies of Australian Business Regulatory Agencies, (1986) Oxford University Press, Melbourne Hayek, F.A. (1960). The Constitution of Liberty. Chicago: University of Chicago Press

Hayek, F.A. (1973_. Law, Legislation and Liberty: Rules and Order, Volume 1. Chicago: University of Chicago Press.

Hayek, F.A. (1976). Law, Legislation and Liberty: The Mirage of Social Justice, Volume 2. Chicago: University of Chicago Press.

Hayek, F.A. (1945). “The Use of Knowledge in Society” The American Economic Review, Vol. 35, No. 4. (Sep., 1945), pp. 519-530 http://www.jstor.org/discover/10.2307/1809376?uid=3739920&uid=2&uid=4&uid=3739256&sid=2 1104299293711

Jha K, “Examining the Current Importance of Pepper v Hart” November 2012 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2149694

Ojo M, “Co-operative and Competitive Enforced Self-Regulation: The Role of Governments, Private Actors and Banks in Corporate Responsibility http://mpra.ub.uni-muenchen.de/27850/1/MPRA_paper_27850.pdf

Parisi, F. 2004 “The Efficiency of the Common Law Hypothesis” The Encyclopedia of Public Choice pp 519-522

Pepper v Hart [1992] 3 WLR 1032, [1993] 1 All ER 42, HL (E)

Posner, R. A. (2013) “Reflections on Judging” Cambridge: Harvard University Press, 2013.

Posner, R. A. 2003. “Kelsen versus Hayek: Pragmatism, Economics and Democracy,” in Law, Pragmatism, and Democracy. Cambridge: Harvard University Press.

Posner, R. A. (2005) "Hayek, Law, and Cognition," 1 New York University Journal of Law and Liberty 147

Posner, R.A. (2001) “Kelsen, Hayek, and the Economic Analysis of Law”

Posner, R. A. (1974) “Theories of Economic Regulation” The Bell Journal of Economics and Management Science, Vol. 5, No. 2. (Autumn, 1974), pp. 335-358 http://links.jstor.org/sici?sici=0005-8556%28197423%295%3A2%3C335%3ATOER%3E2.0.CO%3B2-A

Rubin, P.H. (1977) “Why is Common law Efficient”? The Journal of Legal Studies Vol. 6, No. 1 (Jan., 1977), pp. 51-63 Published by: The University of Chicago Press for The University of Chicago Law School URL: http://www.jstor.org/stable/724189

SEC v Texas Gulf Sulphur Co, 401 F.2d 833 (2d Cir 1968) (en banc), cert denied, 404 U.S 1005 (1971).

Stringham, E. 2001. “Kaldor-Hicks Efficiency and the Problem of Central Planning.” Quarterly Journal of Austrian Economics, 4 (2)

Styles, SC “The Rule of Parliament: Statutory Interpretation After Pepper v Hart” Oxford Journal of Legal Studies Vol 14 No 1 ( Spring 1994) pp 151-158 Oxford University Press

Whitman D. G. , Evolution of the Common Law and the Emergence of Compromise, Journal of Legal Studies, vol. XXIX (June 2000)]

Zywicki TJ and Sanders, AB “Posner, Hayek & the Economic Analysis of Law” Iowa Law Review Volume 93 No 2,pp 559-603 February 2008, George Mason University Law and Economics Research Paper Series