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A Theory of Loopholes

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  • Leo Katz

Abstract

Laws are known to be replete with loopholes. The reason is generally thought to lie in the divergence between the text and the purpose of a law. Practical constraints supposedly make laws unavoidably over- or underinclusive. Lawyers who exploit loopholes are thought to be taking advantage of that over- and underinclusiveness. This essay offers a different perspective. Most loopholes have nothing to do with the over- or underinclusiveness of rules. This is best seen by exploring a particular subset of rules that reveal most clearly what is going on: the rules of voting. Arrow's famous theorem teaches us that all halfway decent voting rules are vulnerable to agenda manipulation. Fundamentally, it will turn out, all legal rules are analogous to voting rules and all loophole exploitation analogous to agenda manipulation. The loophole-exploiting lawyer no more deserves to be criticized, sanctioned, or otherwise frustrated in his efforts than does the shrewd parliamentarian. (c) 2010 by The University of Chicago. All rights reserved.

Suggested Citation

  • Leo Katz, 2010. "A Theory of Loopholes," The Journal of Legal Studies, University of Chicago Press, vol. 39(1), pages 1-31, January.
    • Handle: RePEc:ucp:jlstud:v:39:y:2010:i:1:p:1-31
    DOI: 10.1086/649046
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    References listed on IDEAS

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    1. Saari,Donald G., 2001. "Decisions and Elections," Cambridge Books, Cambridge University Press, number 9780521004046.
    2. Saari,Donald G., 2001. "Decisions and Elections," Cambridge Books, Cambridge University Press, number 9780521808163.
    3. Kenneth J. Arrow & Herve Raynaud, 1986. "Social Choice and Multicriterion Decision-Making," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511754, December.
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