Abstract Enforcement is costly, so sometimes states choose not to enforce their laws. We study this choice under rules and under standards. We show that nonenforcement of rules sends a relatively clear signal about state capacity. Regulated parties can use this information and violate law to some extent with impunity. Nonenforcement of standards sends a noisier signal, and this uncertainty may cause regulated parties to comply with law even though the state lacks capacity to enforce, a surprising implication. According to conventional wisdom, standards are costlier to enforce than rules, meaning a switch from rules to standards should decrease compliance. However, we argue that standards, by obscuring the state’s capacity, can increase compliance. We identify the characteristics of standards that yield these effects, and we show that the logic generalizes to the complexity of law as well as its precision.

This chapter addresses a new and fertile research program: constitutional law and economics. Constitutional law and economics asks questions like, ‘What is the extent of the U.S. Congress’s power to regulate commerce?’; ‘How much legislative authority can be delegated to administrators?’; and ‘When should constitutional change happen through judicial updating rather than formal amendment?’ To address such questions, constitutional law and economics blends positive, normative, and interpretive analysis. This chapter describes all three but emphasizes interpretation, which is new to many economists and paramount to lawyers. After introducing these modes of analysis, we turn to constitutional law. Six processes make and sustain constitutions: bargaining, voting, delegating, entrenching, adjudicating, and enforcing. Economic theory illuminates these processes, and constitutional law reflects them. We cannot describe all of the relevant economic theory here, but we provide some snapshots. Afterwards, we apply the theory to concrete problems in constitutional law. We demonstrate what constitutional law and economics has achieved and showcase its potential.

Abstract This chapter studies political corruption and its many relationships to the law of democracy. It begins with bribery laws, which forbid officials from selling official acts. Federal bribery law is circular, reflecting uncertainty and disagreement around the concept of bribery itself. Next, the chapter studies campaign finance regulations, which raise First Amendment concerns but are nevertheless often justified on anticorruption grounds. Then the chapter examines vote buying, which relates to the secret ballot and the complicated connections between corruption and publicity. The chapter addresses the constitutional dimensions of corruption, including its role in impeachment and the Emoluments Clauses, and it concludes with a discussion of the appearance of corruption, a concern that surfaces in many areas, including judicial recusal and misuse of office. The law of political corruption is often vague, and scholars disagree about the very nature of corruption. This leaves much authority in the hands of the actors, including judges, empowered to define corruption in practice.

Abstract This chapter presents the economic theory of bargaining. It begins with the positive theory, explaining concepts like efficiency and distribution. It develops the Private Coase Theorem, which is familiar from private law, and the Public Coase Theorem, which applies to actors like legislators, administrators, and judges. Turning to normative theory, the chapter explains when bargaining by public law actors is likely to benefit or harm the public. In the interpretive analysis, the chapter applies economics to questions about the “intentions” of lawmakers. The chapter addresses topics such as vote trading, minority rights, public goods, and the use of legislative history by judges.

Abstract This chapter applies the theories of enforcement developed earlier to problems in public law. To begin, the chapter concentrates on the Fourth Amendment to the U.S. Constitution, which protects citizens from unreasonable searches and seizures. The chapter summarizes the legal doctrine on searches and studies it from an economic perspective. The discussion covers warrants, qualified immunity for police officers, and the “exclusionary rule,” which forbids the government from using evidence in some cases. Next, the chapter addresses relationships between legal design and enforcement. The state can improve enforcement by adopting rules instead of standards, lowering the burden of proof, or adopting “insincerely” strict laws. Then the chapter moves beyond deterrence, studying how law can change people’s behavior without threatening punishment. Law can achieve this by supplying information, coordinating action, and possibly changing preferences. Finally, the chapter addresses judicial legitimacy and its connection to a venerable question: When will the state follow its own laws?

Abstract This chapter presents the economic theory of delegation. The delegation of power—from the President to administrators, from citizens to legislators, and so on—is central to public law. This chapter begins with the positive theory of delegation. It analyzes the trade-offs principals face when deciding whether to delegate authority, and it considers whether principals should guide their agents using “rules” or “standards.” Turning to normative theory, the chapter studies the conditions under which delegation benefits principals, agents, and the general public. Finally, the chapter addresses interpretation by courts. Lawyers and judges routinely ask whether a statute grants an agency the power to take a particular action. The chapter develops the “delegation canon” to help answer that question.

Abstract This chapter presents the economic theory of entrenchment. Many laws are “entrenched,” meaning they are especially difficult to change. The chapter shows how entrenchment creates an “equilibrium set” within which law remains fixed. Next, it explores the conditions under which entrenched law can change and how small or large such changes are likely to be. The chapter studies various forms of entrenchment, including supermajority rules, bicameralism, and presentment. Turning to normative analysis, the chapter reviews the conventional justifications for entrenchment, which involve minority rights and stability, and relates them to the economic concepts of efficiency and social welfare. The chapter concludes with interpretive analysis, relating the economic theory of entrenchment to precedent and the doctrine of stare decisis.

Abstract This chapter applies the theories of adjudication developed earlier to problems in public law. To begin, the chapter contrasts two methods of legal interpretation, textualism and intentionalism. Concepts from economics, including coordination games and transition costs, illuminate the choice between them. Next, the chapter studies features of legal doctrine, including prophylactic rules, precedent, and slippery slopes. The discussion addresses stare decisis and cooperation in the judicial branch. The chapter concludes with some puzzles in adjudication by multimember courts. Sometimes courts issue plurality opinions, meaning opinions with no majority. Sometimes the outcome of a case diverges from its reasoning (the “doctrinal paradox”). Sometimes voting by judges runs in circles. Economics can illuminate these puzzles.

Abstract This chapter applies the theories of entrenchment developed earlier in this book to problems in public law. To begin, the chapter studies rights in general. It relates rights to transaction costs and two solutions to inefficiency: “Hobbesian” solutions, which impose a rule on feuding parties, and “Coasean” solutions, which make it easier for people to cooperate. It considers the legal doctrine of “unconstitutional conditions” and the question of whether rights should be local or universal. It also addresses the vexing problem that arises when rights conflict. Next, the chapter studies two rights, equality and free speech, in detail. The chapter concludes by addressing constitutional progress and the choice between amendment by legislators and “updating” by courts.

Abstract This chapter presents the economic theory of enforcement. It begins with a positive theory of enforcement, which emphasizes deterrence. Deterrence involves the costs and benefits of lawbreaking for citizens and the costs and benefits of enforcement by the government. The discussion relates enforcement to settlement, deterrence, and irrationality. Turning to normative theory, the chapter considers the circumstances under which enforcement benefits the public. The discussion addresses optimal deterrence and the choice between fines and imprisonment. Finally, the chapter addresses interpretive theory. To enforce their orders, courts can hold litigants in “coercive” contempt. Economics can illuminate the scope of this judicial power. The chapter covers topics such as hate crimes, excessive fines, and the gap between the law in books and the law in action.

Abstract This chapter applies the theories of voting developed earlier to problems in public law. It begins by studying the right to vote and restrictions thereon. The discussion covers voter information, fraud, campaign finance, and the legal concept of a “political community.” Next, the chapter studies structures of representation, including the size and composition of the legislature, the “one-person, one-vote” principle, gerrymandering, and a concept called the “republican compromise.” The chapter concludes by discussing two forms of government competition, direct democracy and voter mobility. The discussion includes an interpretation of the “single subject rule,” a widespread constitutional provision.

Abstract This chapter presents a brief introduction to law and economics and its intellectual history, and then it describes three modes of analysis: positive, normative, and interpretive. Much law-and-economics scholarship emphasizes the first two modes, but this book emphasizes the third, which is new to many economists and of paramount interest to lawyers. Next, the chapter explains the organization of the book. Every public law grows from six fundamental processes of government: bargaining, voting, entrenching, delegating, adjudicating, and enforcing. The chapter describes these processes and explains their centrality to public law. It concludes with a road map. The book devotes two chapters to each process mentioned here, with the first chapter in each pair presenting economic theory divided into three parts: positive, normative, and interpretive. The second chapter in each pair applies the theory to topics in public law.

Abstract This chapter presents the economic theory of voting. It begins with the positive theory, considering why people vote and when abstention is rational. Next, it presents the median voter theorem, which predicts the outcomes of some elections. Turning to normative theory, the chapter relates the median voter theorem to efficiency and social welfare. The interpretive analysis introduces the “median theory of interpretation.” This theory provides a way to interpret laws enacted by casting separate votes on separate issues, as when voting on ballot initiatives. The chapter addresses topics such as direct democracy, the organization of the executive branch, and voting by judges.

Abstract This chapter applies the theories of bargaining developed earlier to problems in public law. It begins by addressing regulations, especially regulations to correct negative externalities like air pollution. It contrasts two methods for correcting inefficiency: “Hobbesian” solutions that impose a rule on feuding parties, and “Coasean” solutions that make it easier for people to cooperate. Next, the chapter studies federalism, meaning the allocation of powers between national and state governments. It provides an interpretation of Article I, Section 8 of the U.S. Constitution, which establishes federalism in the United States. Finally, the chapter studies the separation of government into executive, legislative, and judicial branches.

Abstract This chapter presents the economic theory of adjudication. Courts sit at the heart of public law, and economists have analyzed many aspects of the judicial process. The chapter starts with the positive theory of adjudication, examining how litigants determine the value of their claims and whether they settle or litigate. It discusses trials and appeals, and it relates these processes to economic tools like Bayesian updating and the Condorcet Jury Theorem. Then the chapter turns to judicial behavior. It addresses the legal, attitudinal, and strategic models of judging. Turning to normative theory, the chapter analyzes the trade-off between accuracy in adjudication and the costs of fact-finding and interpretation. Finally, it presents a guide for legal interpretation called the “incentive principle.” According to this principle, a law’s correct interpretation creates incentives that best fulfill its purpose.

This comprehensive textbook applies economic analysis to public law. The economic analysis of law has revolutionized legal scholarship and teaching in the last half-century, but it has focused mostly on private law, business law, and criminal law. This book extends the analysis to fundamental topics in public law, such as the separation of government powers, regulation by agencies, constitutional rights, and elections. Every public law involves six fundamental processes of government: bargaining, voting, entrenching, delegating, adjudicating, and enforcing. The book devotes two chapters to each process, beginning with the economic theory and then applying the theory to a wide range of puzzles and problems in law. Each chapter concentrates on cases and legal doctrine, showing the relevance of economics to the work of lawyers and judges. Featuring lucid, accessible writing and engaging examples, the book addresses enduring topics in public law as well as modern controversies, including gerrymandering, voter identification laws, and qualified immunity for police.

Abstract This chapter applies the theories of delegation developed earlier to problems in public law. To begin, the chapter studies judicial review of agency action. It discusses the Chevron doctrine, an important principle in administrative law, and the circumstances under which judges should defer to agencies. Next, the chapter studies legal limits on delegation. The “nondelegation doctrine” limits the power of one branch of government to delegate power to another branch of government. The chapter then turns to relationships between citizens and the state. Citizens can petition the government, seek subsidies, and even capture agencies. Officials can make public-spirited laws or hand out special favors. The chapter studies limits on these activities, including laws on lobbying, bribery, and campaign finance.

Sometimes rights conflict, as when the right to religion interferes with the right to equality. Often law does not prioritize rights, leaving judges to resolve conflicts among them based on their own intuitions and beliefs. This paper explores a new principle for resolving such cases: rule against the party that could have avoided the rights conflict more easily. This principle builds on “least cost avoidance,” a theory of liability developed by scholars in law and economics. The main objective of this paper is to adapt least cost avoidance to questions of rights. The secondary objective is to demonstrate the potential of economics in constitutional law. Economics has illuminated and influenced many legal fields. To influence constitutional law, economists must address the questions of lawyers and judges, meaning questions about constitutional doctrine. This paper presents a modest step in that direction.

El derecho constitucional y la economía plantean preguntas como: “¿Cuál es el alcance del poder del Congreso de los Estados Unidos para regular el comercio?”; “¿Cuánta autoridad legislativa se puede delegar a los adminis tradores?”; y “¿Cuándo debería ocurrir un cambio constitucional a través de una actualización judicial en lugar de una enmienda formal?”. Para abordar estas cuestiones, el derecho constitucional y la economía combinan análisis positivo, normativo e interpretativo, por lo cual este texto aborda un importante y fértil programa de investigación

Legal designers use different mechanisms to entrench constitutions. This article studies one mechanism that has received little attention: constitutional “locks,” or forced waiting periods for amendments. We begin by presenting a global survey, which reveals that locks appear in sixty-seven national constitutions. They vary in length from nine days to six years, and they vary in reach, with some countries “locking” their entire constitution and others locking only select parts. After presenting the survey, we consider rationales for locks. Scholars tend to lump locks with other tools of entrenchment, such as bicameralism and supermajority rule, but we argue that locks have distinct and interesting features. Specifically, we theorize that locks can cool passions better than other entrenchment mechanisms, promote principled deliberation by placing lawmakers behind a veil of ignorance, and protect minority groups by creating space for political bargaining. Legislators cannot work around locks, and because locks are simple and transparent, lawmakers cannot “break” them without drawing attention. For these reasons, we theorize that locks facilitate constitutional credibility and self-enforcement, perhaps better than other entrenchment mechanisms.