Growth: The Measure of Law and Economics by Robert Cooter Bilkent University, Faculty of Law, Ankara, Turkey, October, 2014

Two Enterprises Say what the law requires of people. Say what the law is. Interpret laws. Restate the law. Offer legal reasons. Determine the law’s correct categories. Legal Content Legal Causes Prove the effects of laws. Find the empirical consequences of laws. Model responses to laws. Find what caused officials to make or repeal a law.

Pyramid of Law and Economics cause enterprise content enterprise

Year of Publication of Some Seminal Law and Economics Books and Articles (some titles abbreviated) General Coase. “Social Cost.” Demsetz. “Property Rights” Becker. "Crime and Punishment”. Textbooks Posner. Economic Analysis of Law Cooter & Ulen. Law and Economics Polinsky. Intro to Law and Economics. Torts Calabresi. Cost of Accidents Brown. “Economic Theory of Liability” Shavell. Econ Anlys of Accident Law Landes & Posner. Econ Strctr of Tort Law. Corporations 1937.Coase. “The Nature of the Firm Manne. “Market for Corporate Control.1972.Alchian & Demsetz. “Information & Organization” Williamson. Markets & Hierarchies Jensen & Meckling. “Agency & Ownership.”

Major Law and Economics Associations By Date of First Meeting

AALS (American Association of Law School) Professors Teaching Law and Economics

AALS Professors Teaching Law and Economics and Law School’s Ranking

Law Professors Teaching L&E Compared to All Law Professors 2.0% 2.4%

Compound growth 2% =>7 times, 5% => 130 times 10% =>14,000 times

Liberalization Experience Positive China India Central European countries joining EU Negative or Mixed Central European countries not joining EU Africa Latin America (except Chile)

Examples of Double Trust Dilemma Boston bank EndNote SAP

Figure 2.1. Double Trust Dilemma InnovatorInvestor Ideas Capital

Figure 2.3. Finance in Silicon Valley Relational Private Public

Figure 2.4. Finance and Development Relational Relational + Private Relational + Private + Public

Figure 2. Life Cycle of a Successful Venture

(Property, Contract, Business Law) + Liberalization => Growth -- Property Principle for Innovation: The creators of wealth should keep much of it. --Contract Principle for Coordination: The law should enable people to commit to doing what they say. --Organizational Principle for Liberty: People can freely enter most lines of business and choose their firm’s organization from a legal menu. “Legalize Freedom” The Prescription for Growth

Property Principle for Innovation: The creators of wealth should keep much of it. Contract Principle for Coordination: The law should enable people to commit to doing what they say. Organizational Principle for Liberty: People can freely enter most lines of business and choose their firm’s organization from a legal menu. Legal Infrastructure: Three Principles of Law for Growth

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