Paper #1187

Títol:

The law of impersonal transactions

Autor:

Benito Arruñada

Data:

Novembre 2009

Resum:

Most economic interactions happen in a context of sequential exchange in which innocent third parties suffer information asymmetry with respect to previous "originative" contracts. The law reduces transaction costs by protecting these third parties but preserves some element of consent by property rightholders to avoid damaging property enforcement—e.g., it is they, as principals, who authorize agents in originative contracts. Judicial verifiability of these originative contracts is obtained either as an automatic byproduct of transactions or, when these would have remained private, by requiring them to be made public. Protecting third parties produces a legal commodity which is easy to trade impersonally, improving the allocation and specialization of resources. Historical delay in generalizing this legal commoditization paradigm is attributed to path dependency—the law first developed for personal trade—and an unbalance in vested interests, as luddite legal professionals face weak public bureaucracies.

Paraules clau:

Property rights, formalization, impersonal transactions.

Codis JEL:

O17, K22, K23, L59.

Àrea de Recerca:

Economia de l'Empresa i Organització Industrial / Finances i Comptabilitat

Publicat a:

"The Law of Impersonal Transactions" in Eric Brousseau and Jean-Michel Glachant, eds., The Manufacturing of Markets: Legal, Political and Economic Dynamics, Cambridge University Press, Cambridge, 58-77, 2014.

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