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Brian H. Bix

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Brian H. Bix

This insightful research review provides analysis of the most important contemporary work by experts in the economic analysis of legal reasoning and interpretation. It explores a wide range of topics in the field, from constitutional to statutory interpretation, precedent and the interpretation of contracts. The articles discussed raise key questions concerning the optimal construction of institutions, the best approach to judicial decision-making, and the best strategies for statutory and contract drafting. This fascinating review will be valuable to academics interested in legal reasoning, economic analysis and legal philosophy.
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Brian H. Bix

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Anthony Niblett

What is so special about the timing of a judicial decision? When a court finds a statute to be unconstitutional and strikes down the law, from what time does the law cease to have effect? More importantly, when should the law cease to have effect? Three timing possibilities emerge. First, the law in question has no force or effect from the time of the judicial decision. Second, the law is deemed to never have been valid. A third possibility is the subject of this chapter. Suppose the point of invalidity occurs at some time in the future. The court holds the law to be unconstitutional, but suspends its declaration of invalidity for some period of time, perhaps one year. The unconstitutional law remains on the books and in effect during the time period following the court’s decision, but if the legislature does not address the unconstitutional defect by the judicially imposed deadline, then the declaration of invalidity takes effect. Despite the fact that individuals and groups may be deprived of constitutional rights, I argue that there are good reasons to delay declarations of invalidity in some circumstances. The delay may significantly mitigate transition costs associated with legal change and can provide the option to avoid potentially wasteful investments. But this delay can also change the judicial game between the courts and the legislature. Governments will be less proactive in ensuring that laws comply with the constitution and courts will be less likely to uphold statutes and regulations. Keywords: timing, judicial review, invalidity, unconstitutional laws, delay, deadlines, transitions

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Saul Levmore

Intellectual property law is motivated by the idea that innovation requires encouragement with property rights or other rewards. Law seeks to spur innovation in the private sector with copyrights, patents, and other devices, but none of these encourage innovations in lawmaking itself. As in the private sector, a first-mover advantage or harmonization among jurisdictions could influence the rate of innovation in lawmaking, though not necessarily in an optimal way. This chapter examines various kinds of lawmaking in order to evaluate the likelihood of optimal innovation. It takes account of constituents’ likely preference for free-riding on other jurisdictions’ experiments. Lawmakers, in turn, have reason to take a wait-and-see approach so as not to be associated with unsuccessful disruptions. The analysis examines lawmakers’ incentives and draws on several examples, including the design of healthcare systems, the legalization of same-sex marriage, and school reform. In many settings, lawmakers seem to be assigned the task of execution rather than innovation; if lawmakers are best understood as ‘assemblers’ of constituents, consensus, and ideas developed elsewhere, then it is noteworthy that this sort of activity in the private sector is (also) not encouraged by intellectual property law. The discussion includes the roles that prizes and inter-jurisdictional alliances might play in encouraging innovative lawmaking. It suggests that small-scale experimentation is easier in the private sector than in the public sphere, and this too likely affects the rate and thus timing of legal innovation. Keywords: innovation, intellectual property, harmonization, incrementalism

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Saul Levmore

At any given point, lawmakers and interest groups benefit if the laws they pass are long-lived, or durable. The quest for durability explains some kinds of licensing, but a more important conclusion is that it explains a preference for spending programs, rather than mere regulation. Expenditures create endowment effects, to be sure, but spending programs are especially appealing to their beneficiaries when they bring about physical assets that future lawmakers will have no reason to dismantle. In an earlier era, the quest for durability might have generated overinvestments, as monumentalist rulers sought to leave their marks. In modern times, durability can be obtained through social programs as well as construction projects. In some settings durable projects can be reversed with targeted taxes, but recapturing previously awarded benefits is more difficult. Keywords: durability, interest groups, retroactivity, public goods, clawbacks

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Eric A. Posner

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Martha C. Nussbaum

Should law look backward toward time-honored traditions, or forward toward the promotion of social welfare? In this chapter I study the debate between Burkean traditionalists (along with their legal allies) and the British Utilitarians, who find in tradition not wisdom but irrationality and exclusion, and who propose to remodel law along lines of scientific rationality, counting each person equally and promoting aggregate welfare. I examine the strongest arguments for each side and propose a compromise. Keywords: common law, Utilitarianism, Burke, Bentham, Mill, Sidgwick, Holmes, Cardozo

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Frank Fagan

A legal cycle is legislation that takes effect contingently, where contingent factors are ex ante known to fluctuate with some level of predictable regularity. Apart from broad constitutional mandate, lawmakers have historically and suboptimally responded to legal cycles with general and patchwork patterns of legislation involving repeal, amendment, and new enactment. This is true across nearly all domains of codified law. This chapter develops a normative theory of how lawmakers should respond to legal cycles by setting forth the optimal architecture of stabilization rules. Under a general set of conditions, stabilization rules work toward smoothing fluctuations in rulemaking and exert downward pressure on short-term legislative pathologies that result from cognitive bias and interest group politics. The potential of welfare-enhancing stabilization rules is discussed across banking law, budget law, environmental law, health law, national security law, and criminal sentencing. Keywords: timing rules, contingent law, legal cycles, stabilization rules, climate change, budget law, availability bias