Eli M. Salzberger

Judicial Independence: Some Evidence from the English Court of Appeal

This paper is concerned with the existence or otherwise of conscious political interference with judicial decision taking. We produce new evidence from the English Court of Appeal to shed some light on the theoretical debate on judicial independence. This evidence rests on the fact that the procedure for promoting judges from the Court of Appeal to the House of Lords is in principle under political control: the lord chancellor, who has a key role in the promotion of judges, is a member of the cabinet and as such a political appointee. The data relate to public law decisions made by judges in the Court of Appeal over the period 1951–86. We use a competing risks survival model to establish whether the record of individual judges in deciding for or against the government was a factor that determined their promotion chances, controlling for the quality of their decision making.

Towards An Economic Theory of Unjust Enrichment Law

In various legal systems unjust enrichment is an important pillar of private law. However, it does not enjoy the same level of internal coherency and comprehensivness typical of other legal categories such as contract law and tort law. The doctrine of unjust enrichment is a rather general principle that encompasses a whole set of disconnected rules sharing a common rationale. Economic analysis can play a central role in establishing a more systematic understanding of this area of law. Confusion regarding unjust enrichment is partly attributed to a failure to distinguish between two different levels in which this doctrine function. Using the Calabresi & Melamed distinction between entitlements and remedies we show that unjust enrichment can serve as a source for the allocation of legal entitlements, and as a remedy to protect legal entitlements, and that there is no analytical correlation between the two. Subsequently, we try to show that while economic analysis of law should find it difficult to endorse the allocation of entitlements based on unjust enrichment sources, it, nevertheless, in many cases, ought to endorse the remedy of unjust enrichment to protect allocation of entitlements. The paper examines the ramifications of this remedy in circumstances that were not often addressed by the literature, where the beneficiary, who created a benefit, is required to transfer it to the alleged benefactor on the bases of unjust enrichment. In such circumstances, an incentive analysis should focus on the effects of a restitutive remedy on the behavior of the beneficiary. We show that unjust enrichment remedy, measuring actual profits, may carry different consequences then a liability rule or a property rule. This analysis demonstrates the virtue of unjust enrichment as an independent remedy, worthy of study in such cases as breach of contract or the protection of intellectual property.

The Law and Economics Analysis of Intellectual Property: Paradigmatic Shift from Incentives to Traditional Property

This paper focuses on the normative analysis of intellectual property rights, in light of the technological revolution of the Internet and accompanying technologies. After a brief overview of the various philosophical justifications for awarding intellectual property rights, it identifies two major Law and Economics paradigms for the analysis of intellectual property: the incentives paradigm, which is founded upon the public goods analysis of neo-classical microeconomic theory, and the tragedy of the commons literature, which is based on the economic analysis of externalities. The paper raises several points of critique towards both frameworks of analysis and especially towards their inability to point to the desirable extent of intellectual property rights (IPR) and the direction of their reform required as the result of the recent technological revolution. It further criticizes the dominant contemporary Law and Economics writings in this field as shifting to a new proprietary paradigm that pre-assumes information to be an object of property, overlooking its fundamental differences from physical property and focusing on its management rather than on its initial justifications. The paper is concluded with some tentative thoughts on the general notion of Property Rights in light of the contemporary approach concerning intellectual property.

The effects of cyberspace on the economic theory of the state

The book as a whole analyzes the effects of Cyberspace on the Economic Analysis of Law and argues that the networked information environment should exert a crucial influence on economic thinking, on the perception of law, and, by derivation, on the economic analysis of law. Information technologies have dramatically altered many aspects of our everyday life. They change the way we communicate with one another, the way we purchase, entertain, interact, learn, research, deliberate, do business, and indeed, think. During the past two decades the Internet has been revolutionizing economic, communal and political life. This Cyber-revolution is the most significant transformation in the information environment since the invention of printing. Cyberspace has become an integral part of peoples everyday life, and the online information environment constitutes the human condition of our time. People spend a large portion of their time using the Internet for entertainment, business, social relationships and political activities. The increasing human activity in Cyberspace is transforming social and cultural norms, creating a web of new communities, with diverse characteristics - linguistically, culturally and economically. It is beginning to blur some old boundaries across classes and social hierarchies, while at the same time drawing new borders of the digital divide, between the haves and the have nots, between those who are in command of the technology, and the technologically illiterate. The new information environment further introduces new players and novel market and non-market behaviors that cannot be easily explained by standard sociological, political or economic concepts. Cyberspace can even be thought of as affecting the definition of the self. The concluding chapter of the book (chapter 10) focuses on political theory and offers a normative analysis of the state and its government, examining collective action, rule-making processes and the organization of the public sphere. We explore whether the new technological frontiers opened by Cyberspace bear upon the liberal theory of the state (and on the economic theory of the state). We conclude that Cyberspace shakes the paradigm of Liberal Democracy and calls for re-examination of its basic foundations: representative democracy governed by checked and controlled majority decision-making. A by-product of this argument is an attempt to incorporate Republican theories of the state into economic analysis. The focus here is on the presupposition regarding individual preferences - whether they are exogenous, given or internal to the collective decision-making process.

Law and Economics in the 21st Century

Legal research and the methodology employed to analyze and evaluate the law are conducted within a paradigmatic thinking. The term “paradigm shift” was coined by Thomas Kuhn when he put forward a theory about the development of the natural sciences.1 Kuhn disputed the modernistic description of Frances Bacon who presented scientific inquiry as one of constant and accumulative progress, like a building, which is constructed stone after stone. Kuhn argued that science develops in leaps. Regular scientific research is conducted within a set of boundaries that are based on presuppositions left unquestioned by the contemporary scientific community. These boundaries were dubbed by Kuhn “a paradigm”. Scientists in their research (and in their research agenda) are trying to complete a jigsaw puzzle, where the framework of the puzzle is pre-determined by the paradigm. However, in the course of scientific research it turns out that not all pieces fit their spots, and some pieces tend to cross the set boundaries. Scientists try to force the pieces into the slots they think are meant for them. But at one focal point the framework collapses. Doubts bring about rethinking of the pre-set presuppositions. The paradigm shifts; a new paradigm is constructed, which sets new presuppositions and a new research agenda. Regular scientific research continues within the new paradigm, until that too is ripe for replacement.

On Constitutional Processes and the Delegation of Power, with Special Emphasis on Israel and Central and Eastern Europe

Elected politicians—legislators and, in some systems, members of the executive—can choose to exercise authority themselves or to delegate that authority to any number of agencies. Such delegation of power can occur at the constitutional stage, but is most common at the post-constitutional stage. Two categories of delegation can be distinguished: domestic delegation to agencies within the legislators’ jurisdiction, and international delegation to supranational or international bodies. While some research has been done on domestic delegation, especially in the context of delegation to administrative agencies in the U.S., as well as on delegation to supranational bodies, especially with regard to the E.U., these activities have not been analyzed within a unified framework. This paper attempts to inquire into these issues and provide a general picture of the decision-making process regarding whether to delegate authority and to which body to transfer the authority. The past decade has been a period of rapid change in Central and Eastern Europe. Almost all of these countries have either passed entirely new constitutions or substantially modified the old ones. This is a unique situation in which constitutional delegation of powers can be performed almost simultaneously with post-constitutional delegation. The constitutional process in Israel is very different. It has been underway for fifty years. However, it can also be characterized by simultaneous constitutional and post-constitutional choices. In this paper, we examine such delegation choices in nine countries. We describe the main differences among these countries with regard to delegation of power, try to trace their origins and analyze their effects on delegation of powers. One question raised is what are the ramifications of a quasi-simultaneous constitutional and post-constitutional choice? Have constitutional rules been chosen in anticipation of the necessary compatibility with the rules of international organizations that one wants to join? Has membership in international organizations led to a boost in credibility of those governments concerned?

On the Delegation of Powers: With Special Emphasis on Central and Eastern Europe

Elected politicians can choose to decide themselves or to delegate competence. Delegation can occur in the constitutional stage, but is most common in the post-constitutional stage. Furthermore, domestic delegation can be distinguished from international delegation. The authors propose to analyze both delegation decisions within a unified framework and apply it to eight countries of Central and Eastern Europe that have experienced substantial constitutional change recently. The main differences among these countries with regard to delegation are portrayed, their origins are traced and their effects analyzed.

The New “Transparency Law” and the Operation of German Political Foundations in Israel

The conference held in Bochum, on which this volume is based, focused on the interaction of three ingredients. These were the almost universal recent phenomenon of the increasing role played by non-governmental organizations (NGOs) in collective decision-making and in the actual conduct of civil societies; the unique structure and operation, especially in foreign countries, of German political foundations; and the recent Israeli legislation popularly termed the “transparency law” (official title: Law on Disclosure Requirements for Recipients of Support of a Foreign Political Entity (Amendment) (Increased Transparency of Those Primarily Financed by Donations from Foreign Political Entities), 5776-2016). This is of special interest in Germany due to the operation of its political foundations in Israel and their interrelationship with various Israeli NGOs. In order to analyse and evaluate this recent law–the prime task in this piece–a short background to set the context is useful.

The Rule of Law Under Extreme Conditions and International Law: A Law and Economics Perspective

The ‘rule of law’ has attracted a lot of scholarly writings as well as political and public rhetoric in recent years. On the one hand, scholars found that adherence to the rule of law can be regarded as the most significant explanatory factor for various measures of a country’s success, both in social - quality of life - realm and in the pure economic realm. On the other hand, various governments’ responses to terror threats since 9/11, including responses of established liberal democracies, brought about a surge in positive and normative writings, as well as public debates, about the rule of law under extreme conditions or the deviations from the rule of law, even by the most liberal democracies. However, the international law aspects regarding the rule of law under extreme conditions is a field that had received almost no attention so far. Discussing the rule of law under extreme conditions in the international arena from a Law and Economics perspective raises several challenges. First, although the concept of the rule of law as an ingredient of the ‘good’ state, is established (although its precise definition is not agreed upon), the basic definition of the rule of law in the international arena is a much more virgin field. Second, Extreme conditions may challenge the normative and positive analysis of the rule of law. The theory of the state from which we derive the common understanding of the principle of the rule of law deals with the regular operation of collective life, institutions and decision-making. Under extreme conditions most countries establish a different form of the rule of law (an emergency constitution, as phrased by some), compromising some of its essentials during regular times. It can be argued on the normative level that this is justifiable; but to what extent and in which format? There is no coherent paradigm yet for the analysis of the desirable as well as the de-facto rule of law “balance” (e.g. state security versus human rights) under extreme conditions. The third major challenge relates to the definition of those extreme conditions that merit a special look vis-a-vis the rule of law. Three types of extreme conditions have been discussed by the literature: (1) belligerency, war, terror and alike; (2) natural and man-made disasters; and (3) political or economic meltdowns. Are extreme conditions in the international arena identical to extreme conditions in the context of the state? Is the familiar distinction between the three types of extreme conditions referred to in the context of the state applicable to the international sphere?I will try to contribute a few preliminary thoughts about each of these challenges, highlighting the perspective of Law and Economics. Section 1 will explore the concept of the rule of law in the international arena and in international law; Section 2 will elaborate on the economic philosophical foundations of the theory of the state and will examine their applicability to the international sphere and to extreme conditions; Section 3 will focus on the characterization of extreme conditions vis-a-vis the rule of law, including a short overview of the models put forward in the literature and also some methodological remarks for those who engage with a Law and Economics approach towards this topic.