Abstract
The change of legal rules is unavoidable, since the legal system must react to socioeconomic developments. Using the conclusions of the (imperfect) efficiency of the common law and a framework complementary to public choice theory, this essay considers a legal system's choice of whether its rules change rarely by large increments or frequently by small increments. The drawback of frequent changes has been alleged to be unpredictability. The purpose of this analysis is to construct an analytical model of the two evolutionary legal systems which may allow their evaluation. The analysis may apply to the comparison of civil and common law or the desirability of a practice of liberal interpretation by the judiciary. Society is modeled as a random evolution (diffusion). Law must keep up through infrequent but large changes or small, frequent changes. Uncertainty about the law is studied in the context of this model. Neither system appears better at tracking socioeconomic evolution, but frequent small changes are preferable for risk-averse individuals. The analysis suggests that predictability is not an argument against judicial discretion.
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