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The law and economics of rule reform

In: Research Handbook on Austrian Law and Economics

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  • Christopher J. Coyne

Abstract

This chapter considers how appreciating both the incentive issues (the law and economic focus) and the epistemic issues (the Austrian focus) facing reformers can offer insight into the limits of what efforts to reform rules can accomplish in practice. I seek to understand the conditions under which reformed rules will stick in the desired manner, as well as incentive and epistemic issue of reforming rules due to issues of credible commitment. Particular attention is paid to the knowledge distance of rule reformers, which refers to the distance between the local knowledge and the knowledge possessed by those designing rules. Rules are less likely to stick when they are designed by reformers who are distant from the locus of knowledge associated with the problem they seek to address. Appreciating both the incentive and epistemic aspects of rule reform allows for a better understanding of the limits of such efforts.

Suggested Citation

  • Christopher J. Coyne, 2017. "The law and economics of rule reform," Chapters, in: Todd J. Zywicki & Peter J. Boettke (ed.), Research Handbook on Austrian Law and Economics, chapter 5, pages 92-108, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:13939_5
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    References listed on IDEAS

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    1. Peter J. Boettke & Christopher J. Coyne & Peter T. Leeson, 2015. "Institutional stickiness and the New Development Economics," Chapters, in: Laura E. Grube & Virgil Henry Storr (ed.), Culture and Economic Action, chapter 6, pages 123-146, Edward Elgar Publishing.
    2. Boettke, Peter J, 2002. "Information and Knowledge: Austrian Economics in Search of its Uniqueness," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(4), pages 263-274, December.
    3. Philip Keefer, 2008. "Insurgency and Credible Commitment in Autocracies and Democracies," The World Bank Economic Review, World Bank, vol. 22(1), pages 33-61, January.
    4. Razvan Vlaicu, 2008. "Democracy, Credibility, and Clientelism," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(2), pages 371-406, October.
    5. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422.
    6. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters, in: Understanding the Process of Economic Change, Princeton University Press.
    7. Coyne, Christopher J., 2011. "Constitutions and crisis," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 351-357.
    8. Coyne, Christopher J. & Boettke, Peter J., 2009. "The problem of credible commitment in reconstruction," Journal of Institutional Economics, Cambridge University Press, vol. 5(1), pages 1-23, April.
    9. Kydd, Andrew & Walter, Barbara F., 2002. "Sabotaging the Peace: The Politics of Extremist Violence," International Organization, Cambridge University Press, vol. 56(2), pages 263-296, April.
    10. Thomas Flores & Irfan Nooruddin, 2009. "Financing the peace: Evaluating World Bank post-conflict assistance programs," The Review of International Organizations, Springer, vol. 4(1), pages 1-27, March.
    11. Thomas Edward Flores & Irfan Nooruddin, 2009. "Democracy under the Gun Understanding Postconflict Economic Recovery," Journal of Conflict Resolution, Peace Science Society (International), vol. 53(1), pages 3-29, February.
    12. de Mesquita, Bruce Bueno & Downs, George W., 2006. "Intervention and Democracy," International Organization, Cambridge University Press, vol. 60(3), pages 627-649, July.
    13. Christopher J. Coyne & Adam Pellillo, 2011. "Economic reconstruction amidst conflict: Insights from Afghanistan and Iraq," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(6), pages 627-643, October.
    14. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
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