The modern state has monopolized the legitimate use of force. This concept is twofold. First, the state is empowered with enforcement rights; second, the rights of the individuals are restricted. In a simple model of property rights with appropriation and defense activity, we show that a...

Comparative law and finance quantifies differences in the laws governing the business enterprise in various countries. The resulting data can be used to test which legal institutions (if any) matter for financial development. Until recently only cross-sectional data were available. We report the...

We explore randomizing legal information when it may be infeasible to randomize law per se. If citizens are underinformed about a legal entitlement, randomizing information about the entitlement may yield critical insight into its potential effect. We illustrate with a field experiment with the...

The paper uses the findings of psychology, behavioral economics, and behavioral ethics to revisit three main related assumptions of the rational-choice approach to equity, by developing three main points: first, not only bad people try to circumvent the law; second, behavior depends on the...

The legal and the economic perspective on a policy proposal are likely to differ far more fundamentally than is commonly appreciated. Economists will impose certain minimal requirements of rationality on the evaluation process, which lawyers routinely violate. Economists will expect the...

The manuscript evaluates the Czech transformation process with a focus on phenomenon of private ordering and comments briefly on the law approximation process in the Czech Republic. In the author's point of view, the phenomenon of private ordering has hitherto appeared in the Czech Republic in...

We investigate factors influencing the choice of liability status by the owners of start-up firms. We propose a theoretical model that encompasses risk aversion, as well as differentials across liability states in the cost of capital and tax rates, as reasons why entrepreneurs choose one...

This paper surveys and evaluates the current state of legal reform in Russia. Particular attention is payed to the reform of constitutional and public law, institution building, and legal training. The paper identifies many cases of inefficient legal institutions which indicate some fundamental...

During the 19th century, markets exploded liberally before the state began to intervene to compensate for undesired social deterioration. In the second half of the 19th century, however, legislation largely locked up itself, except for laws which dealt mainly with technical modernization, such...

Even if contract enforcers are as opportunistic as ordinary traders, a system of adjudication can increase the degree to which contractual obligations on large anonymous markets are fulfilled. Only if arbitrators receive a fixed income, occasional mistakes will not favour the untrustworthy. It...