Paper #1361

Title:

Stare decisis: Rhetoric and substance

Authors:

Patricio A. Fernández and Giacomo A. M. Ponzetto

Date:

March 2009 (Revised: April 2010)

Abstract:

Stare decisis allows common law to develop gradually and incrementally. We show how judge-made law can steadily evolve and tend to increase efficiency even in the absence of new information. Judges' opinions must argue that their decisions are consistent with precedent: this is the more costly, the greater the innovation they are introducing. As a result, each judge effects a cautious marginal change in the law. Alternative models in which precedents are either strictly obeyed or totally discarded would instead predict abrupt large swings in legal rules. Thus we find that the evolution of case law is grounded not in binary logic fixing judges' constraints, but in costly rhetoric shaping their incentives. We apply this finding to an assessment of the role of analogical reasoning in shaping the joint development of different areas of law.

JEL codes:

K13, K40

Area of Research:

Macroeconomics and International Economics

Published in:

Journal of Law, Economics and Organization, 28 (2), 313-336, 2012

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