Posts Tagged ‘Private Law’

Commenting on the Berlin Wall and political institutions, Robin Hanson notes why private law doesn’t work so well in the United States:

It seems to me that the main problem is trying to invoke private law via small clauses on page 20 of 30+ page contracts – most folks feel reasonably justified in not always literally enforcing such terms. What private law needs instead is a clear deliberate solemnity like that of a new citizen moving to and then swearing allegiance to a new nation, an expensive signal showing they understand there are large consequences.

It’s interesting to note the distinction between lowering transaction costs of switching between such private providers of law, which is an essential feature of private law, yet requiring an expensive signal, which would give private law more legitimacy today. Is this a contradiction?

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