Eco game propose law online11/28/2023 ![]() Tort law is part of the system of private law and is enforced through private actions. More generally, experience in Russia and its former satellites has emphasized the importance of the legal system for development of a market economy and, thus, has shown the importance of law and economics in influencing policy. In such circumstances, the Coase theorem will not operate, and correctly defining property rights becomes important. This creates incentives for inefficient use of the assets, such as sale of valuable raw materials for below-market prices, with the proceeds deposited outside the country. That is, those with control over a firm cannot sell it and keep the proceeds. ![]() An extreme example is Russia, where the courts have not been able to provide clear definitions of property rights, and those persons with control of firms are not necessarily the owners. If transactions costs are greater than the increase in value from moving the resource to the efficient owner, there may be no corrective mechanism. ![]() Transactions costs are never zero, and so if rights are incorrectly allocated, a costly transaction will be needed to correct this misallocation. In many circumstances, however, who owns the right will matter.
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |