Hans-Bernd Schäfer

Rules versus Standards in Rich and Poor Countries: Precise Legal Norms as Substitutes for Human Capital in Low-Income Countries

Legal norms can be precise rules, which are blueprints for action and allow for mechanical decisions by judges and civil servants. Alternatively, they can be vague, mission-oriented standards, which delegate decisions from the maker of the law to the judiciary and the administration. Rules economize on the costs of adjudication and administration. Standards economize on the costs of norm specification. In low-income countries with a relatively low level of training, it is efficient to concentrate human capital to specify precise legal norms, which can easily be adjudicated and administered but might be inflexible. In rich countries with a high endowment of human capital, it is better to have vague legal norms. The adjudication of vague legal norms requires a high level of expertise, but allows for the flexibility to reach custom-made decisions.

Legal Rules and Standards

Rules are those legal commands which differentiate legal from illegal behavior in a simple and clear way. Standards, however, are general legal criteria which are unclear and fuzzy and require complicated judiciary decision making (Diver, 1983; Kaplow, 1992). A speed limit whose violation leads to a fine of 100

The Constitution of the European Union

is a rule, whereas a norm for car drivers to “drive carefully” whose violation leads to damage compensation is a standard. In the latter case the legal norm leaves open what exactly the level of due care is and how the damage compensation is to be calculated (Ulen, 1999).

State Liability for Wrongful Conviction: Incentive Effects on Crime Levels

This paper gives a survey on the Constitutional Law (Treaty Law) of the European Union from a Public Choice perspective. The focus is on the impact of alternative voting rules within the Council, and on the strategic interaction between the institutions of the Community (Council, Commission, European Parliament, European Court of Justice). In addition, we give an overview of the most important open questions and problems of the EU Constitution, which are expected to come up in the negotiations about future treaty amendments in the Council, as well as in the newly created Convention on the Future of Europe.

Emergence and construction of efficient rules in the legal system of German civil law

Wrongful convictions may increase the level of crime over the ideal case of their absence. The problem of wrongful conviction is most serious in areas where crime is endemic and for certain groups of citizens who are stereotyped. State liability mitigates this problem; compensating the wrongfully convicted induces some individuals not to commit crimes, thereby leading to a lower crime level. However, state liability may distort the behavior of judges if the welfare of judges is inversely related to compensation for wrongful conviction. We address policy implications that minimize such distortions.

Jurists, Clerics and Merchants: The Rise of Learned Law in Medieval Europe and Its Impact on Economic Growth

In its most straightforward version the cost-benefit approach, as proposed by Posner,’ asks whether a new legal rule increases total wealth. Goods are valued at their current market prices. If these prices do not exist or are obviously distorted, proxies and shadow prices may be used.’ In a broader sense the cost-benefit approach can be extended to concepts other than wealth maximization, that is, utilitarian maximization, which includes aspects of distributional justice by using distributive weightings for the individual willingness to pay.” The cost-benefit approach to law is based on three assumptions, all three of which and especially the third one, are challenged by the current critique.

Can Member State Liability for the Infringement of European Law Deter National Legislators

Between the years 1200 and 1600 economic development in most parts of Europe gained momentum. By the end of this period per capita income in Western Europe (excluding Orthodox countries) was well above the income levels in all other regions of the world. We relate this unique development to the resurrection of Roman law, which went hand in hand with the rise of law as a scholarly and scientific discipline. In this paper we investigate two competing hypothesis on the impact of these processes on economic growth in Medieval Europe: a) that the rules of Roman law were conducive to the rise of commerce and economic growth and b) that growth occurred not as a result of the reception of substantive Roman law but rather because of the rational scientific and systemic features of the new law and its training of jurists in the newly established universities. Using data on city population as a proxy for economic growth we find that the decisive impact for economic development was not primarily the content of Roman law, but the emergence of a legal method by glossators and commentators in their interpretation and systematization of the sources of Roman law (Corpus Juris, Digests), which originally consisted of a huge collection of cases. The endeavor to extract general normative conclusions from theses sources led to abstraction, methodology, and the rise of law as a scholarly discipline. Wherever law faculties were founded anywhere in Europe jurists learned new legal concepts and skills which were unknown before and conducive for doing business.

Research Handbook on the Economics of European Union Law

Legislative injustice originates when a legal norm is not conform to higher-ranking law, if the legislative body through its actions or lack of action has precipitated or extended an illegal condition. For most legal orders state liability for legislative injustice does not exist or it exists only in rare and exceptional cases. The most important exception to this is EC law. Through a series of wide reaching decisions, the European Court of Justice (ECJ) established liability for harm in the case that a national law of a member state violates EC law and an individual’s right is violated. The ECJ has justified its innovative decisions in particular to give full effect to European law. This article shows that this liability cannot guarantee right incentives for parliaments in member states to comply with European law. All outcomes are possible. Incentives might be set right, they might be too weak or they might even work in the wrong direction. If a majority of members of parliaments votes for a bill which violates European law, it is questionable, whether the thread of state liability, which is passed on to the taxpayer can change the majority into a minority. Also if potential victims of national legislation, which violates European law, can expect compensation, they lose incentives to lobby against the legislation. This can create perverse incentives.

Konsequenzen wirtschaftsrechtlicher Normen

Contents: Introduction Thomas Eger and Hans-Bernd Schafer PART I: THE CONSTITUTIONAL FRAMEWORK OF THE EU 1. A Constitution Like Any Other? Comparing the European Constitution with Nation State Constitutions Stefan Voigt 2. The Rules of Decisionmaking in EU Institutions George Tsebelis 3. EU Decision Making and the Allocation of Responsibility Manfred J. Holler 4. Can Member State Liability for the Infringement of European Law Deter National Legislators? Hans-Bernd Schafer 5. Subsidiarity for a Changing Union Emanuela Carbonara, Barbara Luppi and Francesco Parisi PART II: BASIC FREEDOMS 6. Mutual Recognition: Economic and Regulatory Logic in Goods and Services Jacques Pelkmans 7. The Law and Economics of the Free Movement of Persons in the European Union Herbert Brucker and Thomas Eger PART III: CORPORATION LAW AND CORPORATE GOVERNANCE 8. Corporate Governance in Europe: Foundations, Developments and Perspectives Patrick C. Leyens PART IV: PRIVATE LAW 9. Private Law I: Tort Michael G. Faure 10. Private Law II: Contract Fernando Gomez PART V: CONSUMER PROTECTION 11. The Evolution of Consumer Protection in the EU Fabrizio Cafaggi and Antonio Nicita PART VI: LAW ENFORCEMENT 12. An Economic Analysis of Legal Harmonization: The Case of Law Enforcement within the European Union Nuno Garoupa 13. Private Enforcement of Antitrust Law Roberto Pardolesi PART VII: DIVERSITY IN UNITY 14. Eastern Enlargement of the European Union Hans-Jurgen Wagener 15. The Economics of Multilingualism in the EU Jan Fidrmuc PART VIII: MONETARY INSTITUTIONS AND MONETARY POLICY 16. Law and Economics of the Monetary Union Index

Unternehmenspublizität, Umweltschadensbilanz und Haftung für Umweltschäden

It gives me great pleasure to contribute this paper to a volume celebrating the achievements of Claus Ott, a colleague and friend for many years. Claus may have been “converted” to law-and-economics relatively late in an impressive career of legal practice and scholarship, but the energy with which he has pursued his interest in the subject has been a model for everyone. Claus is best known abroad for his magisterial text, co-authored with Hans-Bernd Schaefer, applying economic analysis to German civil law.1 The work reflects his great skill in showing how the implications of the economic approach can and must be explored through concrete legal principles. No less significant has been his dedication to education and in particular his whole-hearted commitment to the pan-European Erasmus Masters’ Programme in Law and Economics. It is no exaggeration to say that, without him, this programme would have failed.