Last updated on May 6, 2011
My Law School colleagues Curt Bradley and Mitu Gulati have chosen the relationship between custom and the law as the topic of a faculty-wide “conversation” to be held next academic year. From a post by Kim Krawiec on the Faculty Lounge blog:
“This topic connects with a wide range of subject areas. For example: Tort law considers custom in the industry in determining the standard of care. Contract law fills in the gaps of commitments based on customary practices. Assessments of criminal fraud are often affected by industry practices. Custom has a potentially significant influence on what is considered ‘fair use’ in intellectual property law. Constitutional law is informed by the customary operations of government. One of the two major forms of international law is customary rather than codified. And an understanding of the unwritten institutional customs of legal actors (such as courts and prosecutors’ offices) is often essential to an appreciation of how they operate. There are others, of course, and we welcome suggestions on other applications, as well as readings, either foundational or new, on which we might focus as a group at various points throughout the year.”
The first meeting of this group was held on Tuesday afternoon. I unfortunately had to miss it in order to grade the final in my micro class with the help of my two amazing teaching assistants. I am very much looking forward to the remainder of this faculty conversation, however.
Custom and the Law in Development Economics
Indeed, I have worked a little bit on the impacts of custom in developing countries. My job-market paper, which is forthcoming in Land Economics, shows how customary rights in Madagascar are such that a landlord who leases her plots out under a fixed rent contract has a weaker claim to her land than an otherwise observationally similar landlord who lease her plot out under a sharecropping contract. I explain this as follows:
“During the fieldwork for the data collection effort that led to this paper, the author was repeatedly told by landlords that they chose share tenancy ‘to help the family’ or ‘to help others.’ While this is an admittedly vague answer, it does suggest that the village elders are enforcing a norm of risk sharing among members of the same family, if not among members of the same community. This is especially likely in a context where most people are risk-averse, and in which a risk-averse landlord who chooses a fixed rent contract so as to avoid taking any risk is perceived as leaving all of the production risk associated with cultivation of her plot of land to her tenant, who is also most likely risk-averse. Similarly to Posner’s argument that the law evolves in a way that maximizes efficiency, Ellickson (1989, 1994) develops a hypothesis according to which social norms evolve so as to maximize wealth (or minimize transaction costs). It is thus likely that the norm of land redistribution in Madagascar has evolved so as to maximize social welfare by spreading risk across individuals. In other words, it looks as though sharecropping emerges as a result of a social norm aimed at providing social insurance.”
The real experts, though, are Gani Aldashev and Jean-Philippe Platteau. Both were colleagues of mine when I was on research leave at the University of Namur last year. They have a very nice paper in the Journal of Development Economics in which they investigate the possibility of using the law to change customs. Both Gani and Jean-Philippe have worked extensively on custom and the law, so this is not their only paper on the topic.
Kim Krawiec revisited the topic last weekend by listing some of the invited speakers. Having recently discussed Ellickson’s (1994) Order without Law in the section on social norms of the law and economics seminar I teach in the spring, I am looking even more forward to this seminar series.