Abstract and Keywords
One of the most illustrious normative claims in the law and economics literature, originating with Posner and supported by models of evolutionary legal change, posits that a system of judge-made law offers efficiency advantages over statute-based systems. In recent years, however, scholarship has identified aspects of common law systems that undermine the optimism about judge-made efficiency. This chapter reviews the original economic literature on the efficiency of the common law and then describes supply- and demand-side obstacles to efficient judge-made law. On the supply side, a rich body of literature on judicial decision-making and judicial attitudes casts doubt on the ability as well as the motivations of courts to bring about efficient precedent. Demand-side complications include interest group effects, plaintiff selection effects, information selection effects, settlement selection effects, and procedural factors.
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