Making Choices and Making Law: An Institutional Perspective on the Takings Issue

Abstract

The institutional approach to law and economics has its roots in the work of Henry (1954), (1923), and (1924); it is currently reflected in the work of such scholars as Warren J. Samuels, A. Allan Schmid, Nicholas Mercuro, Steven G. Medema, and H. H. Liebhafsky.3 The approach taken here is predominately positive—to identify and analyze the fundamental factors and forces at work in the legal-economic process and to assess their implications for future performance. Law is seen as a function of a multiplicity of factors and forces, including power, ideology, time (including the evolution of the economic system), selective perception, and mutual interdependence. Law reflects an inevitable choice process, and outcomes are seen as a function of these choices.