Commerce and Cooperation: Litigation and Settlement of Civil Disputes on the Australian Frontier, 1860 1900

I examine the evolution of conflict and cooperation during economic growth by analyzing civil disputes in New South Wales between 1860 and 1900. Disputes per capita fell over time and the proportion of cases settled before trial increased, but patterns varied across locations and types of disputes. Economic conflicts were likelier to be settled than personal disputes, and the fraction of cases settled was significantly lower in frontier areas and in districts without access to transportation. The results suggest that increased market exchange facilitates the development of informal rules and encourages transactors to find cooperative solutions through private bargaining.When a person makes perhaps twenty contracts in one day, he cannot gain so much by endeavouring to impose on his neighbours . When people seldom deal with one another; we find that they are somewhat disposed to cheat.Adam Smith, 1763