Coase on the nature of economics

Recent writings on Coase's methodology largely focus on method,at the risk of underappreciating his substantive view of economics.That economics has as its subject matter the working of thereal world economic system is Coase's main methodological messageand is also the key to understanding Coase's other methodologicalconcerns. Coase's methodological position is illustrated inthis paper by comparing him with other economists in terms oftheir differing research programmes informed by their methodologicalstances. Along the way, this paper outlines the new institutionaleconomics, a research programme inspired by Coase's methodology.     

No institution is a free lunch: a reconstruction of Ronald Coase

The two major contributions of Ronald Coase, written at distant points of his long life, have been often interpreted as different and, somehow, contradicting views of the merits of the market mechanism. We argue that the underlying point of the two articles is the same, and it can be summarized by the statement that no institution is a free lunch. When the unity of the Coasian theory is properly understood, it offers a powerful challenge to standard neoclassical production theory and opens new analytical tools to understand and to compare the institutions of production.     

The law and economics of sycophancy

Tullock (in: Rowley (ed) The selected works of Gordon Tullock, Liberty Fund, Indianapolis, pp 399–455, 2005) was skeptical of the presumed economic efficiency of the common law, as adversarialism, apparently inherent to common law procedures, allowed for and was prone to litigiousness. Common law litigations accord to patterns of rent-seeking, as litigants invest ever more resources to assure victory. This paper asks if viable institutional solutions can emerge to resolve the problem Tullock identified. I survey the historical development of the term sycophancy within ancient Greek law as a revealing case study. Though a relatively innocuous pejorative in contemporary parlance, the term’s etymological roots stem from a formative process of ancient legal and institutional change within Athenian Greece. In the wake of specific legal reforms that expanded the scope of governmental authority under Solon (born 638–558 BCE), citizens were given explicit financial incentive to report violators of newly implemented public laws. Thereafter, social stigma surrounding third party legal representation leveraged the term sycophancy in reference to prosecutors motivated by private interests over the public welfare. Forgone social status and eventually formal criminal sanction emerged as offsetting differentials against the incentives of sycophancy.     

Islamic constitutionalism and rule of law: a constitutional economics perspective

This study investigates the relationship between Islamic constitutionalism and rule of law. Al Azhar, one of the most respected Sunni religious institutions in the world, developed a model of an Islamic constitution. This study uses Al-Azhar’s constitution as a model of Islamic constitutionalism and examines its stance in regard to the rule of law. We find the Al-Azhar’s constitution to be incompatible with essential concepts of rule of law. For example, the powers vested in the head of the Islamic state are enormous, making the executive branch of government far superior to the legislative and judicial branches. Women and non-Muslims are explicitly discriminated against throughout the constitution. Moreover, laws stemming from this constitution are not stable since many differences exist among schools of Islamic jurisprudence (fiqh). Consequently, we show that state-of-the-art Islamic constitutionalism lacks essential components needed in any constitution based on rule of law.     

“揭开公司面纱”制度的法经济学分析

传统法学分析以公平、正义为视角,认为揭开公司面纱制度维护了股东有限责任制度的正义性,但对于该制度的效率价值却少有分析。法的经济分析与法的传统规则分析不同,其在分析法律制度的效率方面有着明显的优势。通过运用法经济学分析方法对揭开公司面纱制度的效率予以探究,认为揭开公司面纱制度并不是牺牲效率换取公平的制度安排,相反,它的正确适用能够给股东有限责任制度带来更高的效率。     

An Austrian approach to law and economics, with special reference to superstition

This paper has two purposes. First, it considers what the components of an ??Austrian?? law and economics might consist of. I argue that Ronald Coase??s conception of law and economics precludes the economic analysis of legal institutions and, in particular, the beliefs that support them. In doing so, Coase??s conception precludes an Austrian law and economics. In contrast, Richard Posner??s conception of law and economics makes such analysis the core of its study. In doing so, Posner??s conception provides a productive foundation for an Austrian law and economics. Second, to illustrate what some aspects of an Austrian law and economics might look like in practice, I consider several examples of the economic analysis of beliefs of import for the law. I focus on objectively false beliefs, or superstitions, and argue that some such beliefs are socially productive.     

Coase theorem, complexity and transaction costs

This paper, by introducing complexity considerations, provides a dynamic foundation for the Coase theorem and highlights the role of transaction costs in generating inefficient bargaining/negotiation outcomes. We show, when the players have a preference for less complex strategies, the Coase theorem holds in negotiation models with repeated surplus and endogenous disagreement payoffs if and only if there are no transaction costs. Specifically, complexity considerations select only efficient equilibria in these models without transaction costs while every equilibrium induces perpetual disagreement and inefficiency with transaction costs. We also show the latter is true in the Rubinstein bargaining model with transaction costs.     

科斯定理、相互性与公共领域

经济学家不理解科斯及其理论,因为他们不懂得科斯定理、相互性定理和科斯核心定理的内在联系.姚兰·巴塞尔的产权经济分析是以科斯核心定理和公共领域产权的不确定性为基础的.私人所有或者政府所有是否有效率,依赖于交易成本的变化.私人所有过去可能存在着效率上的缺陷.     

职业安全规制问题研究:基于法经济学的视角

控制和减少职业伤害,救济遭受职业伤害的劳动者,维护职业安全,是任何一个民主、法制、健康和谐的社会必须高度重视的社会经济问题,也是政府实施社会性规制的重要领域。我国国民经济高速增长的背后隐藏着巨大的社会成本,包括越来越严重的职业安全问题。各类生产安全事故的频繁发生,职业病发病人数的不断增加,折射出我国劳工状况不容乐观、劳动者权利未能得到有效保护的现实。在建设社会主义和谐社会的大背景下,应该从完善政府社会性规制入手寻求破解之道。     

Social economics and economics imperialism

Address delivered at a session on April 2, 1993 at the Midwest regional meetings of the Association for Social Economics, Indianapolis, IN.     

Chasing Phantoms in a Hollow Defense of Coase

Patrick Gunning refuses to acknowledge the most salient arguments against the Chicago law and economics case for negligence made by Austrian economists. Because of this, he makes the same errors in his defense of Coase that permeate the Chicago paradigm. In particular, his defense of Coasean type analysis completely ignores Austrian cost theory, i.e., that all economically relevant costs are strictly subjective and therefore conceptually impossible to measure. He also fails to grasp the implications of disequilibrium market process theory for the use of any kind of least-cost-avoider rule in the economic analysis of the law. As a result, Gunning's defense of Coase suffers from the same pretense of knowledge as the analysis that he is defending.     

The irrelevance of normative considerations for founding an Austrian law and economics: Reply to Marciano

In a comment on my paper, ??An Austrian approach to law and economics, with special reference to superstition?? (Leeson 2012), Marciano contends that Posnerian foundations ??may be problematic for an Austrian approach to law and economics??. In this reply I argue that the differences between Posner and Austrians that Marciano uses as the basis for his contention are normative. If, as Austrians claim, Austrian economics is purely positive, those differences are irrelevant to the appropriate foundations for an Austrian law and economics. They pose no problem for a Posnerian founding.     

The Core, Transaction Costs, and the Coase Theorem

This paper clarifies and synthesizes elements of the two decade old debate concerning the Coase theorem and the empty core. Five lessons can be derived from this debate. First, the Coase theorem may break down when there more than two participants (provided the additional participants bring an additional externality to the table). Second, the problem of the empty core does not disappear in a world of positive transaction costs. Under reasonable assumptions about the transactions technology, transaction costs may well exacerbate the empty-core problem. As a consequence, it is important to differentiate between transaction costs (when the core exists) and costs due to the empty core because each has different implications for rationalizing institutional arrangements. Third, the Coase theorem will not break down when the number of participants increases if the new participants do not bring additional externalities with them. If, however, additional participants bring in additional externalities, then the core may be empty and Pareto efficiency may not emerge from costless negotiations. Fourth, Pareto Optimality can be achieved when the core is empty by judicious use of penalty clauses, binding contracts, and constraints on the bargaining mechanism. Fifth, when a non-excludable public good is involved, a free-rider problem arises as the number of agents increases, and this undermines the Coase theorem; in this case, Coasean efficiency requires the participation of all agents affected by the externality in the writing of binding contracts.     

Postsocialist privatization and agency-related property: from Coase to Locke

Differing concepts of private property and the state (Hobbes, Locke, and Smith) are discussed on an abstract level as well as to their relevance regarding transition in the countries of Soviet socialism. This discussion provides arguments to support the following claim: to gain an adequate understanding of what privatization means in the context of Eastern European reforms, it is essential to use models of thought which (1) relate property rights to agency and production and (2) treat political, judicial, organizational and spontaneous processes of establishing and enforcing rights as endogenous elements of the analysis. This would imply that for an attempt to conceptualize ‘transition’ and ‘privatization’, traditional neoclassical analysis might be misleading: it treats private property rights (‘endowments’) as related to exchange only and holds that they exhibit no patterns which are relevant to the analysis of a market society. It treats them as exogenous and hence arbitrary.     

Political bargaining in a federation: Buchanan meets Coase

In recent decades, the issues of federalism and political integration have gained prominence in public debate as well as in the academic realm. A frequently made point is that allowing free secession may protect the minority's interests, thus providing it with an incentive to enter the federation. This paper explicitly considers the political process in the federation arguing that the option to secede may distort the political choices made by the individual regions to improve their bargaining positions. As a result, the allocation of resources in the federation could well end up being inefficient and unattractive for the minority region. In contrast, limiting the secession possibilities by requiring the consent of a majority of voters through a regional referendum, rather than leaving it to the discretion of the legislature, restores efficiency.     

Costly enforcement of property rights and the Coase theorem

We examine a setting in which property rights are initially ambiguously defined. Whether the parties go to court to remove the ambiguity or bargain and settle before or after trial, they incur enforcement costs. When the parties bargain, a version of the Coase theorem holds. However, despite the additional costs of going to court, other ex-post inefficiencies, and the absence of incomplete information, going to court may ex-ante Pareto dominate settling out of court. This is especially true in dynamic settings, where obtaining a court decision today saves on future enforcement costs. When the parties do not negotiate and go to court, a simple rule for the initial ambiguous assignment of property rights maximizes net surplus. A paper circulated under the same title and dated 6 March 2000 contained the basic structure examined in this paper, but did not develop many of the results reported here. For comments, we would like to thank participants at the WZB-CEPR contests conference and seminar audiences at the University of Southern California, the University of British Columbia, UC Davis, and UC Riverside.     

女性主义经济学与中国经济学的本土化

经济学研究的是具体社会关系下人的理性行为以及人类行为造成的经济现象,因而具有强烈的人文性;而且,随着经济学研究领域的不断拓宽,人们已经开始引入了制度、文化等社会性因素,经济学的人文性已日益明显.正是基于这种人文性特征引发了人们对具体社会中人之理性的重新审视,以及对社会中人之行为的关注,并导致20世纪80年代之后女性主义经济学的勃兴;经济学领域的性别差异又进一步引发了社会性的思考,从而引发了对经济学本土化的探讨.事实上,不同社会文化下的经济学是有差异的,经济学本质上无法像自然科学那样科学化、客观化和通用化,而是具有强烈的本土化的色彩;而且,如果经济学理论没有本土化,就没有根植性,也就没有创新性,当然也就没有现代性和世界性.