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Guido Calabresi's economic analysis of law, Coase and the Coase theorem

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  • Marciano, Alain

Abstract

Calabresi and Coase, two of the founding fathers of the “law and economics” movement are frequently, and paradoxically, put on the same footing for having put forward the same results. The purpose of this paper is to investigate this proximity by analyzing Calabresi's works published in the 1960s. The argument we develop is that differences, and similarities, are deeper than what is usually assumed. First, methodologically, it can be said that Calabresi envisaged an economic analysis of liability rules while Coase adopted a law and economics perspective. Then, analytically, it can be shown that Calabresi proposed an “invariance” thesis. We compare it to Coase's results and to Stigler's Coase theorem and show that the “invariance” thesis can indeed be found in Coase's “The Problem of Social Cost” but was absent from Stigler's version of the Coase theorem—that was restricted to an “efficiency” thesis. We also show that Calabresi moved from the “invariance” to the “efficiency” thesis when he established a “Coase axiom”. However, Calabresi, just like Coase and Stigler, but for different reasons, believed that the axiom is theoretically valid but “in fact inaccurate”.

Suggested Citation

  • Marciano, Alain, 2012. "Guido Calabresi's economic analysis of law, Coase and the Coase theorem," International Review of Law and Economics, Elsevier, vol. 32(1), pages 110-118.
  • Handle: RePEc:eee:irlaec:v:32:y:2012:i:1:p:110-118
    DOI: 10.1016/j.irle.2011.09.001
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    References listed on IDEAS

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    1. Steven Medema, 2011. "A case of mistaken identity: George Stigler, “The Problem of Social Cost,” and the Coase theorem," European Journal of Law and Economics, Springer, vol. 31(1), pages 11-38, February.
    2. Elodie Bertrand, 2006. "The Coasean analysis of lighthouse financing: myths and realities," Cambridge Journal of Economics, Oxford University Press, vol. 30(3), pages 389-402, May.
    3. G. A. Mumey, 1971. "The "Coase Theorem": A Reexamination," The Quarterly Journal of Economics, Oxford University Press, vol. 85(4), pages 718-723.
    4. Sophie Harnay & Alain Marciano, 2009. "Should I help my neighbor? Self-interest, altruism and economic analyses of rescue laws," European Journal of Law and Economics, Springer, vol. 28(2), pages 103-131, October.
    5. Regan, Donald H, 1972. "The Problem of Social Cost Revisited," Journal of Law and Economics, University of Chicago Press, vol. 15(2), pages 427-437, October.
    6. Borcherding, Thomas E, 1970. "Liability in Law and Economics: Note," American Economic Review, American Economic Association, vol. 60(5), pages 946-948, December.
    7. Coase, R H, 1988. "The Nature of the Firm: Influence," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 33-47, Spring.
    8. Harnay, Sophie & Marciano, Alain, 2009. "Posner, Economics And The Law: From “Law And Economics” To An Economic Analysis Of Law," Journal of the History of Economic Thought, Cambridge University Press, vol. 31(02), pages 215-232, June.
    9. Coase, R H, 1993. "Law and Economics at Chicago," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 239-254, April.
    10. Coase, R H, 1996. "Law and Economics and A. W. Brian Simpson," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 103-119, January.
    11. N/A, 1970. "Note," Review of Radical Political Economics, Union for Radical Political Economics, vol. 2(4), pages 1-1, October.
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    Cited by:

    1. Giovanni B. Ramello, 2016. "The past, present and future of comparative law and economics," Chapters,in: Comparative Law and Economics, chapter 1, pages 3-22 Edward Elgar Publishing.
    2. repec:kap:ejlwec:v:43:y:2017:i:3:d:10.1007_s10657-017-9558-3 is not listed on IDEAS

    More about this item

    Keywords

    Calabresi; Economic analysis of law; Coase theorem; Invariance; Problem of social cost; Stigler;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • K0 - Law and Economics - - General

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