'Capacitas': Contract Law and the Institutional Preconditions of a Market Economy
Capacity may be defined as a status conferred by law for the purpose of empowering persons to participate in the operations of a market economy. This paper argues that because of the confining influence of the classical private law of the nineteenth century, we currently lack a convincing theory of the role of law in enhancing and protecting the substantive contractual capacity of market agents, a notion which resembles the economic concept of 'capability' as developed by Amartya Sen. Re-examining the legal notion of capacity from the perspective of Sen's 'capability approach' is part of a process of understanding the preconditions for a sustainable market order under modern conditions.
|Date of creation:||Jun 2006|
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- Edward L. Glaeser & Andrei Shleifer, 2002.
The Quarterly Journal of Economics,
Oxford University Press, vol. 117(4), pages 1193-1229.
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