Academic journal article William and Mary Law Review

Foreword

Academic journal article William and Mary Law Review

Foreword

Article excerpt

The macroeconomic problems facing nations have changed little over the last century. Undeveloped nations continue to look for tools to increase the growth rate of their economies. Developed nations, content with or perhaps resigned to modest long-term growth rates, focus more on business cycles, with their inevitable downturns (recessions and depressions). Law and economics scholarship, with a few minor exceptions, has little to offer business cycle theorists. (1) This is not surprising. Law and economics generally applies the tools of microeconomics, not macroeconomics, and even relatively recent scholarship on the microeconomic foundations of business cycles does not involve issues commonly addressed by law and economics scholars.

Until fairly recently, the same could have been said about growth theory. Its traditional focus on accumulation of capital, stages of development, and creation of key infrastructure--for example, roads and railroads--did not require the application of expertise in micro-level, legal relations. (2) Over the last decade or two, however, economists have begun to focus on microeconomic legal foundations that may be catalysts of growth for undeveloped economies. In particular, they have devoted considerable attention to the role that property rights play in economic developments. (3)

Given that economists have been gearing up on the role that property rights play in economic growth, it would seem natural for legal scholars of property, and especially those with a law and economics bent, to follow this lead. Property, after all, is essentially a legal construct. Moreover, it permeates the foundations of developed legal systems: contracts is about the consensual transfer of property rights; torts is about the protection of property rights from nonconsensual harm.

Yet it seems clear that property law scholars, the author included, generally have not followed their economist colleagues into the breach. Here is one piece of anecdotal evidence: over the last five years, ten leading law journals have published ten articles, summing to 714 pages, on the finer points of the Constitution's Takings Clause. (4) Over the same period, these journals have published only two articles, summing to 105 pages, on the role of property rights in economic development. (5)

This is not to say that the Takings Clause (on which the author has published more than his fair share) is an unworthy subject; indeed, later in this introductory essay we will highlight the importance of the principles for which it stands. Moreover, in America and other developed economies, at least outside of the ghettos discussed at the end of this essay, the Takings Clause is more relevant to everyday life than economic development in the Third World. To the extent that taxpayers directly or indirectly fund legal research at public law schools (such as my employer), our focus on the finer points of doctrines of interest to the domestic citizenry may make some sense. Yet it seems that, if we were to attach equal weight to the welfare of every person planet-wide, property scholars might well maximize their marginal product by devoting less time to the Takings Clause and other fine points of domestic property law, and more time to the role that property rights may play in bringing affluence to impoverished nations. At any rate, it is this thought that motivated me to organize a conference that would enlighten property scholars about economists' work on property rights in developing economies, and vice versa.

For legal scholars who choose to study the role of property rights in economic development, an initial question presents itself: What is their comparative advantage? In what way can they draw on their special skills and experience to maximize their contribution? Economists are better equipped to address many questions. For example, they are trained to develop theoretical models that capture the essence of costs, benefits, and trade-offs. …

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