波士顿大学：财产权系统和法律制度（英文版）：财产权系统和法律制度

分类：法学格式：pdf 日期：2005年12月29日

BOSTON UNIVERSITY
SCHOOL OF LAW
WORKING PAPER SERIES,PUBLIC LAW & LEGAL THEORY
WORKING PAPER NO,03-06
PROPERTY RIGHTS SYSTEMS AND THE RULE OF LAW
RONALD A,CASS
This paper can be downloaded without charge at,
The Boston University School of Law Working Paper Series Index,
http://www.bu.edu/law/faculty/papers
The Social Science Research Network Electronic Paper Collection,
http://ssrn.com/abstract_id=392783
PROPERTY RIGHTS SYSTEMS AND THE RULE OF LAW
Ronald A,Cass
*
Tolstoy’s novel,Anna Karenina,starts famously with the observation that,All happy
families resemble one another; every unhappy family is unhappy in its own fashion.”
The opposite is more nearly true in respect to the rule of law,Though many societies
with differing governance structures and legal systems adhere in their own ways to the
rule of law,societies that derogate from it do so in more similar fashion,Put differently,
it is easier to identify departures from the rule of law than to explain why particular ac-
tions conform to it,
The rule of law matters to people around the world because it is a concomitant of
a society that is successful and,in all likelihood,just.
1
It does not guarantee justice or so-
cial welfare,but it does correlate with justice and social welfare (under virtually any ac-
cepted definition of those terms),That is why the concept has such broad appeal,
A critical aspect of the commitment to the rule of law is the definition and protec-
tion of property rights – rights to control,use,or transfer things (broadly conceived),in-
cluding rights in intangibles such as intellectual property,Societies in which it is rela-
tively easy to secure property rights,to protect them against infringement,to gain recom-
pense when rights are infringed,and to transfer property rights in whole or in part to in-
dividuals who value them more highly are more likely to succeed.
2
Of course,the sub-
Property Rights Systems and the Rule of Law,page 2
________________________________________________________________________
stance of the rights matters,Societies that are relatively friendly to property,not only
giving it security but also providing broad scope for the use of property according to its
owners’ desires,also will have an advantage.
3
Substance aside,however,the degree to which the society is bound by law,is
committed to processes that allow property rights to be secure under legal rules that will
be applied predictably and not subject to the whims of particular individuals,matters,
The commitment to such processes is the essence of the rule of law.
4
Although societies differ markedly in their commitment to the rule of law,the dis-
tinctions often are less clear than might at first blush appear,The ways in which systems
manage changes in property rights and in legal rules that affect property rights,along
with the ways in which systems constrain official discretion,are the keys to the effective-
ness of the rule of law,But the rule of law does not bar change nor does it forbid discre-
tion,Change is a natural part of any legal system,and efforts to limit change must be
seen not as ends in themselves but as part of a larger framework for assuring predictable,
valid,law-based governance,Discretion to effect changes in the nature of property rights
seems an inevitable part of any property rights system,And the division between sys-
tems that conform closely to the rule of law and those that depart from it will be tied less
to whether discretion to shape and alter the law exists than to the nature of the discretion,
to its concentration in few or many hands and its relation to other authority and to other
legal and practical constraints,Conformity to the rule of law in the end cannot be meas-
ured in discrete increments but must be viewed as the product of a set of related consid-
erations,
Property Rights Systems and the Rule of Law,page 3
________________________________________________________________________
Property and Property Rights Systems
The word,property” does not strike the listener’s ear as a particularly abstruse term,We
think we understand it instinctively,Property is a thing,Or things are property,But,of
course,when we go to say anything more precise,to specify whose property a thing is,
and what aspects of it are proprietary,against whom,for what purposes,we realize that
property is not so readily self-defining after all.
5
And if we think a bit more,we realize
as well that property does not consist only of things,at least not only of tangible things,
We call certain types of ideas – or at least certain forms of their expression – intellectual
property and craft property rights in them,We recognize claims for money,for services
that are equivalent to money,or for employment that earns money under the rubric of
property rights.
6
The line between property rights and other rights is a contestable line,This re-
flects the fact that the notion of property itself – what it is,how it should be thought of,
who should have what property rights – has been a subject of controversy across centu-
ries,Philosophers (along with economists,historians,and others) have argued whether
property is something natural,existing prior to government recognition of rights,or in-
stead is a positive construct of government.
7
They have contested the strength and
provenance of a deep-seated historic impulse to stake out individual rights in property,
with contrasting claims that the natural order is not of individual but of communal rights.
8
And they have debated the proper basis for and scope of rights to realty and to personal
property,to intangible goods and to government largesse.
9
Modern-day scholars con-
tinue the arguments,drawing threads forward from hoary engagements to mix with more
current assessments of the effects of inequality or of miscast incentives.
10
Property Rights Systems and the Rule of Law,page 4
________________________________________________________________________
Although the definition of property and delineation of the line between property
rights and other rights is contestable,the core notion of property focuses on things,such
as land,to which rights may be given as against the world,Where other rights often rest
on the existence of some duty that is tied to particular behavior toward a more limited set
of individuals,property rights tend to function as rights against the world in respect of the
control,use,and disposition of things.
11
And often those things are situated,physically or
as the result of legal rules,so that a single set of government decision-makers will have
influence over the value of property rights.
12
That is the type of property – and the aspect
of property rights – that is most important for inquiry into their connection to the rule of
law,
Property Rights Systems and the Rule of Law
This paper tells the tale of two systems – but not truly two separate tales,Western de-
mocracies generally have adopted rules that are quite successful at limiting official dis-
cretion to alter property rights in unpredictable ways,at promoting stable and secure
rights,and at limiting governmental interference with the most productive uses of prop-
erty,including voluntary transfers of property to those persons who will pay most for it
(at least inferentially an indication of higher value),A legal system that allows individu-
als to order their lives,their personal behavior,and their business conduct secure in un-
derstanding the rules that will apply to them provides a critical spur to the investments of
money,of energy,of talent that promote progress in human endeavor,Far more than
natural resource endowments,sound law and government are markers for a society’s suc-
cess – both for its material success and for its citizens’ broader sense of well-being.
13
Property Rights Systems and the Rule of Law,page 5
________________________________________________________________________
To be sure,there is far more regulation of economic activity – and,hence,neces-
sarily of the use of property – in these nations than was common fifty or seventy-five or a
hundred years earlier,And the increase in regulation reasonably can be thought to reduce
the value of property from what it otherwise might be.
14
Even though many forms of
government activity – support for infrastructure,transportation,availability of police pro-
tection,support for a well-functioning legal system,provision of a stable currency,and so
on – can raise the value of property,still other activity must be recognized as interfering
with property owners’ interests in order to promote other ends,Some estimates put the
cost of economically burdensome regulation at staggering levels for even the least ag-
gressively regulated advanced economies.
15
Nonetheless,the legal imposition on property owners in these economies has been
slight enough that,together with the productivity of resources and the distribution of hu-
man resources and capital,the value of property in these societies has reached lofty lev-
els,The total value of real property (obviously only one form of property) in the United
States,for example,is estimated to be between $15 trillion and $20 trillion.
16
Stock mar-
ket values,which overlap somewhat with real property but also largely represent other
business property,intellectual property,and other intangible value,may amount to more
than $11 trillion (taking the value of shares listed on the major U.S,exchanges).
17
Beyond factors such as natural endowments and the choices made in crafting sub-
stantive legal provisions,the value of property in advanced economies is testament to the
societies’ commitment to the rule of law,Practical commitment to rule of law values is
part of the economic success story,part of the value of property and of property rights,It
Property Rights Systems and the Rule of Law,page 6
________________________________________________________________________
is part of what sets Western democracies (a term that is not strictly limited to Western
nations or to governments that are fully democratic) apart from many other nations,
The core concept of the rule of law includes an understanding that society should
be ordered around a set of laws that apply similarly to all on the basis of principles de-
ducible from the rules and not dependent of the identity of the rulers,It includes the ex-
pectation that rules of law that seem on their face to apply to all will in fact be read simi-
larly and applied similarly to all – that what seems to be a universal rule will find similar
application to the rich and the poor,to high and low born,to those from different relig-
ions and tribes and locales,different political parties,different skin colors,different fami-
lies,
The base proposition for the rule of law is that,in the formulation given by John
Adams and David Hume,it intends,a government of laws,not of men.”
18
For the laws
to govern,for them to play the decisive role rather than for the particular individuals in
power to do so,the laws – along with the individuals who apply the law and the institu-
tions that mediate application of the laws – must provide reasonable certainty about the
meaning of the rules that govern our conduct,And the reasonable certainty about the
rules must be rooted in understanding of the rules as written rather than detailed knowl-
edge of which individuals will ultimately be applying the rules to us.
19
Friedrich Hayek framed the point in especially strong terms,saying that the rule
of law,means that government in all its actions is bound by rules fixed and announced
beforehand – rules which make it possible to see with fair certainty how the authority will
use its coercive powers in given circumstances and to plan one’s individual affairs on the
basis of this knowledge.”
20
One can argue the contours of the Hayekian requisites for
Property Rights Systems and the Rule of Law,page 7
________________________________________________________________________
the rule of law,the degree to which rules must be fixed or the command that all govern-
ment actions be bound in advance by rules,But Hayek’s essential point is correct – that
the rule of law directs government to provide fair notice of what rules it will apply,that
the rules must allow individuals to plan their affairs with a reasonable understanding of
the rules that set the bounds to lawful behavior,
The classical rule-of-law conception propounded by Hayek and others contains
four elemental components.
21
These are rule fidelity (law appliers’ engagement in apply-
ing law),principled predictability (foreseeability of rules’ application and meaning),rule
validity (the derivation of rules from valid legal authority),and external authority (accep-
tance of someone other than the rule applier as the source of the rule to be applied),
None of these four elements is completely obvious,and each of these elements can be
problematic in some settings,
Meeting these elements – coming within the classical definition of the rule of law
– assures that law is not the whim of an individual,that law is not administered in ways
that dramatically empower government officials at the expense of private citizens,that
the law’s strictures are not unduly difficult to anticipate,These elements of the rule of
law cohere with a system of legal governance,of law-boundedness,that allows substan-
tial scope to individual judgment (and,thus,to varied individual values) in charting the
course of ordinary affairs.
22
Because these elements of the rule of law produce the sort of
predictability Hayek sought,they allow individuals to adapt to legal rules in ways most
likely to improve social welfare (at least as assessed by a measure of summed individual
values) or,put in less positive terms,in ways most likely to minimize social cost,Fur-
ther,because the rule of law thus defined militates against the sort of whimsical,biased,
Property Rights Systems and the Rule of Law,page 8
________________________________________________________________________
and dictatorial impulses that often correlate with welfare-reducing rules,the rule of law
can be associated with some substantive welfare-enhancing qualities.
23
These rule-of-law elements do not,however,assure that laws are wise or just,
The mind of man has been little able to devise precepts that provide coercive power to
any group,under any structure,and assure that it will be used exclusively in ways that are
wise and just,The focus of the rule of law is not to provide such assurance – neither
through procedural requisites nor through definitional assertion – but merely to assure
law-bounded qualities that tend in the direction of better and more just legal systems.
24
Adherence to the rule of law slows down changes in the system,increases the foresee-
ability of change,makes change less the product of one individual’s will than of the more
regularized and intricate interweaving of different wills and priorities,The rule of law is
a commitment to limitations that guarantee greater stability rather than any specified end-
point for law and for government,This process commitment is not the entirety of what
one might desire of a legal system – the substance of the rules surely matters as well – but
it is an important goal and one that needs attention even in the best,most law-abiding
systems,systems that will tend to promote human liberty,security,and economic oppor-
tunity,
Property Rights Systems and Arbitrary Rule
People around the world instinctively recognize the differences among nations’ commit-
ment to the rule of law,Western democracies generally rank high on this commitment
and are characterized by a set of governance structures that limit individual,official
power,But differences across nations,though intuitively evident,are less readily cap-
tured by description of what does and does not comport with the rule of law than might
Property Rights Systems and the Rule of Law,page 9
________________________________________________________________________
initially be thought,Both the variance and the difficulty of bold pronouncements about
the qualities of a legal system that demonstrate adherence to or departure from the rule of
law can be seen in comparing the situations in Zimbabwe and the United States – one
system that appears strongly in derogation of,and one that appears to operate strongly in
accord with,the rule of law,
Property Rights in Land in Zimbabwe
In 1965,the white minority government of Ian Smith declared the British colony
of Rhodesia (now Zimbabwe) independent of Britain,The Smith government repre-
sented white citizens (who were a very small minority of the population,perhaps two or
three percent) and sought to maintain white supremacist policies,Policies long in effect
in Rhodesia had limited the right of black African citizens to own land,except in certain
designated reserves,and land ownership consequently was heavily skewed toward
whites,The breakaway from Britain in 1965 sparked an armed struggle between the
Smith government and two black nationalist movements,known generally in the West by
the acronyms ZANU (Zimbabwe African National Union) and ZAPU (Zimbabwe Afri-
can Patriotic Union),The inequality in land holdings was both a symbolic and pragmatic
factor in the civil war,
The war ended in 1979 with the victory of the nationalist groups and an agree-
ment (the Lancaster House Agreement) negotiated among the warring groups and the
government of the United Kingdom,the former colonial power,The UK,which had not
recognized the Smith government’s claim to independence and had imposed sanctions
against the regime,formally recognized Zimbabwe as an independent Commonwealth
nation in 1980,ZANU and Robert Mugabe won elections to form the new government,
Property Rights Systems and the Rule of Law,page 10
________________________________________________________________________
trumpeting land reform as a prominent part of his platform,Mugabe has held office ever
since,
Although land reform did occur,it proceeded at a measured pace,During the
1980s,the government acquired about 3 million hectares of land and redistributed that
land to about 50,000 families.
25
Some in Mugabe’s government complained that too little
was being done and blamed the overhang of colonial rule.
26
The Lancaster House
Agreement contained a restriction on forced land redistribution,stating that for 10 years
(to 1990) no land would be acquired by the government of Zimbabwe unless there was a
willing seller and the government promptly paid,adequate compensation.”
27
Following
expiration of that stricture,Zimbabwe’s constitution was amended to allow the govern-
ment to take land without the owner’s consent,In 1992,legislation provided a new
mechanism for calculating the price to be paid for property taken by the government,one
that gave substantial power to a small group of administrators,
Despite the change in law,the pace of land reform actually slowed in the 1990s,
with government responsible during the decade for settlement of perhaps forty percent as
many families on less than one-third the land transferred in the 1980s,One reason is that
the funding for the land purchases of the 1980s very largely came from the UK and other
Western nations through grants that had been exhausted by the end of the 1980s.
28
Out-
side commentary – widely reported,though denied by the government of Zimbabwe –
also suggests that much of the benefit of government land reform programs went to well-
placed officials and influential supporters of President Mugabe rather than to the poor
Zimbabweans for whose ostensible benefit the reforms were designed.
29
Poorer Zim-
babweans and soldiers who had fought for ZANU during the civil war took matters into
Property Rights Systems and the Rule of Law,page 11
________________________________________________________________________
their own hands in many parts of the country,occupying land owned by white farmers
without formal government sanction,
Responding to pressure from constituents,Mugabe’s government proposed a re-
formed constitution that would,among other things,allow the government to take land
without payment to the owners,The new constitution,however,was defeated in a popu-
lar referendum,Nonetheless,in the spring of 2000,the ZANU-dominated parliament
adopted the amendment providing that the government could condemn and acquire land
free of any obligation to compensate the owners,asserting instead (unilaterally) that Brit-
ain had the obligation to provide recompense.
30
And President Mugabe,exercising au-
thority to enact legislation temporarily under a law giving the president extraordinary
powers to deal with emergencies,amended the Land Acquisition Act in accord with the
newly altered constitution to permit uncompensated takings,Six months later,the par-
liament adopted legislation to the same effect.
31
The changes in the law were accompanied by a surge in land seizures by former
ZANU fighters and others,Within a year,about 100,000 squatters occupied almost half
the farms targeted by the government for acquisition.
32
Within two years,according to
some reports,as many as 300,000 families occupied some 11 million hectares of land
formerly owned by white farmers.
33
While some white farmers abandoned their property
in the face of rising violence,others resorted to armed resistance,long a part of white mi-
nority rule in Africa and particularly in Zimbabwe-Rhodesia.
34
Press reports link the vio-
lent seizures of farms to groups associated with Mugabe.
35
An umbrella group for larger commercial farmers,though lacking the political
standing to reverse Mugabe’s policy,both tried to persuade the government to alter its
Property Rights Systems and the Rule of Law,page 12
________________________________________________________________________
policy (attempting to negotiate an expanded,voluntary land reform program) and also
went to court to block the land seizures,In December 2000,the Supreme Court of Zim-
babwe agreed with the farmers that the government could not take away their property
without compensation,The Court found that the land acquisitions being carried out did
not conform to legal requirements of the Land Acquisition Act,including matters such as
the right to judicial review of decisions on compulsory takings,and that the program also
did not conform to requirements of the constitution of Zimbabwe.
36
Among other things,
the court found that the constitutional requirement of an established program of land re-
form prior to land confiscation was not met,The judgment declared that
the settling of people on farms had been entirely haphazard and unlawful,a net-
work of organizations,operating with complete disregard for the law,had been
allowed to take over from the Government,War veterans,villagers and unem-
ployed townspeople had simply moved onto farms,encouraged,supported,trans-
ported and financed by [ZANU] party officials,public servants,the Central Intel-
ligence Organisation and the army.
37
For devotees of Administrative Law,the judgment is notable for its invalidation of the
law permitting President Mugabe to exercise legislative authority for temporary periods
of time,the Presidential Powers (Temporary Measures) Act,The court struck this law
down as an unconstitutional delegation of legislative power,
If we stop the story at this point,it seems a story about the efficacy of the rule of
law,The courts stepped in against a very determined government led by a long-time
Property Rights Systems and the Rule of Law,page 13
________________________________________________________________________
president to protect the rights of property owners and to enforce legal rules,That is the
role of courts operating under the rule of law,
But the story goes on,President Mugabe,displeased at the ruling,replaced the
Chief Justice of the Supreme Court (whose resignation was widely reported as being
forced by Mugabe).
38
The new Chief Justice then named three more new judges to the
Supreme Court,With the newly reconstituted bench,the land acquisition case was then
reconsidered by five members of the court,Apparently the Chief Justice selected which
five judges would hear the case,This time,the judges decided that the law met both con-
stitutional and other legal standards,The four judges voting to uphold the law were the
four new additions to the court.
39
The lone dissenter subsequently stepped down,also
reportedly under pressure from the government and its supporters,
Zimbabwe and the Rule of Law,First Cuts
At this juncture,having gotten to the end,the story looks like a classic breakdown
of the rule of law,It is a story about using legal forms to implement the will of the rulers,
specifically President Mugabe,
The law prevented Mugabe from doing what he needed to politically in order to
stay in power or at least to be more secure in power,Legal rules prevented him from tak-
ing property that belonged to some citizens (the white minority) in order to give it to oth-
ers (veterans,militia members,government officials,other supporters) who were more
critical to Mugabe’s political future,
So Mugabe changed the law and he changed the personnel who interpret the law,
Mugabe changed the law by using special powers conferred on him to amend the law and
by using his parliamentary majority to amend the law,including amendments that pur-
Property Rights Systems and the Rule of Law,page 14
________________________________________________________________________
ported to apply retroactively.
40
And Mugabe changed the law-readers by using his power
to replace judges who opposed him with judges who were more compliant,more willing
to accede to his desires,The judges who stepped down were pressured by government
officials and by others,The judges were subject not merely to criticism or threats of re-
duced resources or of having government ignore their rulings,The judges faced death
threats,threats they apparently viewed as more than mere rhetoric,
There is little that is more at odds with the rule of law than the use of raw power
to bend legal judgments to the will of an individual,There is little more at odds with the
rule of law than,in the midst of a legal controversy,changing who reads,who interprets
the law in order to change the reading – much less to do so after the law has been read,
There is little efficacy to property rights when they can be abrogated so easily to serve the
purposes of a ruler,Zimbabwe’s treatment of property rights and its treatment of the le-
gal system that defines those rights fails the rule of law because it is a story of the exer-
cise of arbitrary,dictatorial authority
Arbitrary Rule or Rule of Law?
As obvious as the disconnect between the events in Zimbabwe and conformity to the rule
of law is – and it should be quite obvious – the line between blatant derogation from the
rule of law and conformity to the rule of law,between behavior consistent with legal pro-
tection of property rights and total disregard of those rights,is not so easily drawn on
conceptual grounds,The line rests on differences in degree in several respects and,most
of all,on the combination of circumstances that free the decisions in Zimbabwe from
control by valid,external authority,independent of the identity of the decision maker,
Rule of Law and Changing Law
Property Rights Systems and the Rule of Law,page 15
________________________________________________________________________
Consider,for instance,the change in governing law,Property rights will not be
secure if the law governing them is subject to change,Much of the rule of law focuses on
predictability,and so,too,much of the security for property turns on predictability.
41
Re-
call Professor Hayek’s assertion that the essence of the rule of law is,that government in
all its actions is bound by rules fixed and announced beforehand,” and that the rules must
“make it possible to see with fair certainty how the authority will use its coercive powers
in given circumstances and to plan one’s individual affairs on the basis of this know-
ledge.”
42
Even for those who reject the Hayekian approach,predictability has been the
touchstone of well-ordered legal systems for a broad array of scholars and judges.
43
So,
changes in law of the sort made in Zimbabwe – to change the procedures to make it eas-
ier to take property,to remove the protections against arbitrary selection of the properties
to be taken,to eliminate the guarantee of compensation for property acquired by the gov-
ernment – seem incompatible with well-functioning property rights systems,
a,Legal Change Under the Rule of Law
Yet,it is not the mere fact of changes in the law that makes this so,There is no
way to bar change in the law or to make property rights absolutely secure against such
change,And no legal system has done that,
The United States,which takes pride in its legal system’s protection of individual
rights,including rights to property,has never proscribed all changes in law that reduce
the value of property rights,It has never adopted a blanket prohibition of changes that
take away or reduce the value of property rights without compensation,Certainly,evolu-
tion of the common law includes decisions that look a great deal like changes in the law
that introduce new liabilities,many of which impose burdens on rights to use or dispose
Property Rights Systems and the Rule of Law,page 16
________________________________________________________________________
of property.
44
Bolder changes in legal rules also take place through legislation or through
administrative action,Taxes are raised on some types of property,lowered on others,
newly imposed on others; regulation takes away some economic opportunities that ex-
isted and imposes new costs on other uses of property,Proposals to implement new taxes
on property or to alter the mix of taxes – lowering income taxes,increasing sales taxes,
abolishing or raising or changing rules for estate taxes,eliminating the double taxation of
income distributed as corporate dividends – like changes in regulatory regimes can,and
often do,significantly alter the value of property rights,U.S,law,however,allows many
of these changes to take place without requiring transfer of public funds to those citizens
whose property values are diminished.
45
Some commentators have opined that U.S,law should do more to protect the
value of property rights against changes in the law.
46
But given the number of moving
parts in the system of law and governance,almost everyone who looks at the issue recog-
nizes that prohibiting changes in the law that reduce the value of existing rights would be
paralyzing,It is the functional equivalent of a unanimity rule for governance,However
desirable such a rule would be in theory,the costs of implementing such a rule in practice
are prohibitive when we move beyond the smallest of groups.
47
Among other reasons,
such a rule dramatically increases the costs of potential hold-outs,granting individuals
strategic power to extract more from fellow citizens than the value they would sincerely
place on assent to a given change.
48
And each hold-out potentially can extract the full
social value of a change.
49
Although it is not likely that decisions subject to unanimity
will face this doomsday scenario,it is quite likely that many such decisions will be very
costly to make under a unanimity rule,
Property Rights Systems and the Rule of Law,page 17
________________________________________________________________________
Once the prospect of change without fully unanimous consent is admitted,it is
obvious that there will be change that adversely affects individuals and that the harmed
individuals will have to bear costs from the change,Unless there is a perfectly error-free
way to determine the value of change,positive or negative,and to arrange payments that
perfectly adjust for the changes in value experienced by each citizen – a prospect beyond
the dream of the most ambitious central planner – there is no way to avoid this out-
come.
50
The prospect of legal change that is permitted and is not limited by a requirement
of fully offsetting compensation may be positively beneficial,rather than simply an ac-
commodation to the costliness of centralizing the compensation decision,Individuals
acting on their own behalf often are best positioned to make adjustments to the possibility
of legal change,including changes that affect property,There is an enormous array of
settings in which the value of property rights may be affected and an equally broad vari-
ety of ways in which those who hold the rights may assess the risk and calculate the im-
plication for their rights’ value,The approach in market economies generally has been to
recognize the difficulty of centralizing choices when the welfare effects of a choice are
dependent on myriad individual valuation decisions,The dominant strategy in such
situations is to set only basic ground rules and leave each individual free to choose the
means of enhancing and protecting his or her investments that seems best suited to that
person’s individual preferences and expectations,
A regime with little specific legal proscription against – and little specific com-
pensation for effects of – legal change can be assimilated to the approach taken with re-
spect to the general run of social choices in market economies,A now-standard argu-
Property Rights Systems and the Rule of Law,page 18
________________________________________________________________________
ment regards legal change to be indistinguishable from other changes that affect the value
of property rights,such as changes in market conditions,in supply costs,or in consumer
tastes.
51
First-party insurance (formal insurance or behavior tantamount to insurance)
arguably is better suited to protect against the risk of change than are efforts to constrain
the ambit of government action,This is so precisely because it allows each individual to
decide how much the insurance is worth and how best to adjust his own conduct to limit
the risks associated with change,Constraints on legal change are more likely to be blunt
instruments,less subject to tailoring to particular circumstances and values,
b,Restraints on Legal Change
Legal rules and institutions in the United States,do,however,put limits around
how far government can go in changing laws,First-party insurance is only arguably bet-
ter,not certainly better,There are settings in which the change in the law is manifestly
subject to the sorts of welfare-reducing manipulations that are inconsistent with rule-of-
law values,U.S,law – like the law of other economically advanced democracies – puts
both procedural and substantive constraints on such change rather than shifting to the af-
fected parties the burden of insuring against it,
So,for example,changes that affect particular,identifiable individuals,rather than
a broad,diffuse class of people,are generally suspect,Often the individuated decisions
are retrospective and can impose burdens that are particularly difficult to adjust.
52
But
even when prospective,they are associated with a variety of potential decisional biases,
For that reason,administrative bodies must give individualized hearings to the affected
parties in most settings in which the parties will bear individually differentiated bur-
dens.
53
This requirement has been found in the United States Constitution’s prohibition
Property Rights Systems and the Rule of Law,page 19
________________________________________________________________________
of the deprivation of property without due process,as well as in a variety of statutory en-
actments.
54
The U.S,Constitution also prohibits the national legislature from singling out
individuals for special burdens,and most state constitutions in the U.S,have more gen-
eral proscriptions against legislation that is aimed at particular individuals rather than at
generic classes.
55
Two other headings relevant here that prevent changes in U.S,law are the,con-
tracts clause” and the,takings clause” of the U.S,Constitution,The first of these forbids
states from impairing the obligation of contract.
56
This clause has not been interpreted as
banning without exception any state law that affects existing contractual rights,having
historically been seen as permitting the adoption of regulations aimed at protecting the
population’s health and safety even if the regulations change the existing balance of
benefits and burdens under contracts.
57
The concern of the clause’s drafters appears to
have been legislation aimed specifically at altering contractual commitments,at relieving,
for example,debtors of the obligation to pay their debts.
58
Efforts to proscribe that sort
of impermissible government law-changing,to circumscribe that set of laws,have been
criticized as yielding too modest a constraint.
59
Still,the clause does stand as an impedi-
ment to a class of possible changes to the law.
60
The second of these constitutional prohibitions,the takings clause,also has a lim-
ited application but clearly constrains some government conduct and has enjoyed some-
thing of a renaissance in recent years,This clause prohibits government from taking pri-
vate property for public use without just compensation.
61
Government regulations that
address perceived matters of public welfare – from nuisance abatement to protection of
historic landmarks – may be upheld despite substantial impact on particular property.
62
Property Rights Systems and the Rule of Law,page 20
________________________________________________________________________
This leaves some burdens – sometimes,substantial burdens – to be borne by those whose
property is affected,But if government wants to acquire property or if it imposes burdens
on it that essentially amount to an acquisition,the takings clause requires the government
to pay for the privilege.
63
Regulation of property,if it is not to be deemed a confiscation
for which compensation is due,must demonstrate a substantial connection between the
regulation and its ostensible goal.
64
Even if a regulation meets this test,the regulating
jurisdiction cannot avoid paying compensation if the regulation essentially deprives the
owner of economically viable use of the property.
65
And the exaction required of a prop-
erty owner cannot place a disproportionate burden on the property but instead must be
reasonable,both in nature and extent to the impact of the proposed development.”
66
Putting aside the question whether the requirements are set out in tests that have
sufficiently low administrative costs and other error costs to be deemed welfare-
enhancing overall,the requirements do set out rules that should increase the alignment of
government action with social welfare.
67
The connection between means and ends
should reduce the prospects for the sorts of exactions that are so obviously welfare-
reducing that officials would never justify them on their actual grounds,The requirement
that exactions must be reasonable in nature and degree relative to the proposed improve-
ment also should increase the probability that the government acts to improve welfare,as
that presumably is implicit in the reasonableness judgment,The requirement to pay for
regulatory change that effectively removes all economic value also should promote wel-
fare,as the regulating authority should be willing to make that trade-off if the benefit of
the regulation exceeds its cost.
68
The welfare-improving characteristics of the takings
Property Rights Systems and the Rule of Law,page 21
________________________________________________________________________
rules help constrain changes in ways that also increase predictability and effectively limit
official discretion.
69
These rules do not assure that no change in the law occurs in the U.S.,or that all
applications of the law are fully anticipated,or that changes in the law or its application
do not impose uncompensated harm,The rules do,however,militate in favor of in-
creased restraint on official power and increased predictability in its exercise,
Even more than the legal rules,the barrier to unpredictable action in the United
States is the systemic structure that checks government power,that divides authority,that
creates governance institutions that make strong,rapid change in law difficult,Law-
making in the United States is a slow and cumbersome affair,Government power is di-
vided among national,state,and local competencies and among a variety of officials,
When law cannot be changed quickly,when a change requires consent of large numbers
of people,it is more likely that those who will be most affected will be able to anticipate
and adjust to the change,
Important constraints on using faster,easier procedures are contained in the
United States Constitution,and the processes for constitutional change place substantial
impediments to easing those constraints,Despite many efforts to amend the Constitution,
following the framing era only seventeen amendments have been adopted in a span of
more than 200 years.
70
The paucity of amendments reflects widespread acceptance of the
governance system,That acceptance acts as a check on many potential threats to the sys-
tem,The commitment to the U.S,governance system is so thoroughly ingrained in the
public psyche that even Presidents whose political survival is threatened have been un-
willing to challenge the system directly.
71
Property Rights Systems and the Rule of Law,page 22
________________________________________________________________________
Although changes in law are accepted in all nations,the commitment to limited
and divided power that restrains legal change,and to legal rules that limit the scope and
impact of such change on property rights,appears far greater in nations like the U.S,than
in Zimbabwe,The combination of procedural and substantive rules in law-governed na-
tions such as the United States limits the likelihood of legal changes that impose harm on
individuals far out of line with what might reasonably have been anticipated,That differ-
ence makes change of law in the U.S,more likely to comport with the rule of law and less
likely radically to alter established property rights,
Legal Change and Land Reform
The problem of changing law in ways that affect property rights is especially
acute when there is pressure for radical change,such as land reform,Societies,like Zim-
babwe,that begin with extreme inequality in distribution of resources,typically land,
rarely can address the distributional asymmetries without altering expectations of prop-
erty rights owners,
Although faulted by the Zimbabwe Supreme Court and others for failing to en-
gage land reform seriously,the genesis for the actions of the Mugabe government lies in
the perceived need to spread land ownership more broadly,a special problem for a soci-
ety that has little wealth apart from land.
72
Mugabe tried to justify the lack of compensa-
tion for the land grab by declaring that the black citizens who would now occupy the land
collectively represent those from whom whites had stolen the property long ago,His
message was not that former owners would get back parcels they had owned – prior to
the European colonization of Zimbabwe,there apparently was no developed system of
individual land ownership and certainly no recording system that would permit assign-
Property Rights Systems and the Rule of Law,page 23
________________________________________________________________________
ment of current land to former owners,Mugabe’s assertion,rather,was that the coloniza-
tion and land division subsequent to colonization constituted theft from the indigenous
Zimbabwean population,
When do such general historical grievances provide a basis for undermining es-
tablished property rights? In the United States there have been at least three occasions
for confronting this question,First,there was a protracted,agonizing debate over the
treatment of slaves,which were treated as property in the Southern states,President Lin-
coln had proposed a $400 million fund to compensate former slave owners for the lost
value of their slaves,a proposal unanimously opposed by Lincoln’s cabinet.
73
Instead,
the Thirteenth Amendment to the U.S,Constitution recognized the freedom of former
slaves and forbade slavery,without any provision for compensation to those who,in
keeping with the laws of their time and place,had regarded human beings as property,A
second episode,also unconscionably protracted,addressed claims of indigenous Ameri-
cans for land taken from them,Although the U.S,government for years was scandal-
ously unfaithful to its treaties with Indian tribes and continues to follow the legal rule that
the national government can abrogate aboriginal claims to land without compensation,
the government also has continued to provide funds for settling claims of aboriginal title
to lands in the Eastern United States and to provide property in the Western U.S.
74
Moreover,Indian land claims based in deprivation of property for which title was recog-
nized in a valid treaty have been entertained long after the deprivation.
75
Finally,there
was the much needed land reform in Hawaii,where,as the residue of a feudal landhold-
ing system,more than 95 percent of the land was owned by the government or by merely
72 private landowners.
76
In the 1960s,Hawaii passed a land reform law that allowed
Property Rights Systems and the Rule of Law,page 24
________________________________________________________________________
large landholdings to be broken up,with compensation then paid to the owners for the
value of the redistributed land,
The extraordinary injustice of the property holdings in each case – the manifest
injustice of slavery,the dispossession and large-scale devastation of aboriginal peoples,
the historic anomaly of excessively concentrated landholding in Hawaii – make the
claims for redistribution,for alteration of existing rights,compelling,And each seems
sui generis,separate from other aspects of U.S,law,Had the emancipation of slaves not
been concomitant to armed rebellion,there doubtless would have been substantial com-
pensation,Apart from its special nature,the emancipation of slaves is unlikely to create
problems with future investment in property and future expectations of the American le-
gal system,It is obviously a very special case,So,too,are our relations with Native
Americans,The initial eviction of aboriginal peoples differed from other European colo-
nizations in its attention to the forms of legality,though the claims for compensation
from the government later received a more sympathetic hearing than has been common
elsewhere,As Alexis de Tocqueville observed in the mid-nineteenth century,“The con-
duct of the Americans of the United States towards the [Indians] is characterized,,, by a
singular attachment to the formalities of law.,,, It is impossible to destroy men with
more respect for the laws of humanity.”
77
However unjust,there is no current implication
for the U.S,rule of law – no one is apt to see the treatment of native peoples today as the
bellweather for property protection in general,Finally,the Hawaii experience is a rela-
tively benign and law-bound example of land reform to address historic problems,
Claims for redress of historic grievances are unusual and stretch the bounds of le-
gal systems,Apart from such claims for radical reform,Western legal systems generally
Property Rights Systems and the Rule of Law,page 25
________________________________________________________________________
create barriers to direct redistribution of property other than through voluntary exchange,
even when misbehavior of some sort contributed to an earlier transfer of the property,
So,for example,the commercial law protects purchasers of property from various claims
of third parties if they have purchased the property in good faith for value.
78
This treat-
ment reduces the risk to market transactions,placing the onus for protecting property on
the original owner,who is left with a claim for subsequent compensation from the misap-
propriating party,In cases of serious historical grievance,however,it is understood that
different rules may be needed and that,where land redistribution is the issue,full com-
pensation to those whose rights are affected may not be possible within the budget con-
straints societies face,In such instances,as in Hawaii’s example,the requisite effort
seems to be to provide an orderly transition and sufficient compensation to reasonably
accommodate expectations,
If the Zimbabwe land reform saga seems to augur a more general departure from
the rule of law,the defect in Zimbabwe is not in the endeavor to reform land ownership
nor is it in the failure to provide compensation fully satisfactory to current owners,The
owners might not have foreseen the exact shape of the land reform measures and cer-
tainly would have expected some compensation,but they surely anticipated some reform
measures,The derogation from rule of law values must inhere in some other aspect of
the Zimbabwe story,
Legal Change and Discretionary Authority
The process by which the Zimbabwe land reform law was changed appears
strongly at odds with legitimacy requisites of the rule of law,The process is not flawed
simply because it failed to follow the law of Zimbabwe fully,In many settings,that fail-
Property Rights Systems and the Rule of Law,page 26
________________________________________________________________________
ure could be cast as one that deprived provisions of the new rules of legality but not of
more fundamental legitimacy,though the term legitimacy is sometimes used to connote
this more technical aspect of legality,Rather,the process in Zimbabwe is flawed because
even the steps taken in conformity to law – such as Mugabe’s use of legally conferred
emergency powers – confer too much power in too few hands,It is an objection not to
the formal legal validity of the steps taken by Mugabe but instead to the absence of suffi-
cient governing external authority to make the power exercised by Mugabe law-
governed.
79
This objection is critical to rule of law values,but it is not an easy one to pin
down,It is an objection to the scope of discretion given to one person,Too much discre-
tion in any person creates the rule of men,the antithesis of the rule of law,Yet,there is
no clear test for the permissible scope of discretion acceptable under the rule of law,and
the rule of law necessarily accommodates some scope for official discretion,Differences
in judgment about the legitimate scope of discretion that can be vested in official decision
makers fuel a good bit of the debate over the meaning of the rule of law and over the con-
formity of particular legal regimes to it.
80
In even the most rule-of-law oriented regime,there will be instances of state-
sanctioned discretion that seem to be strongly in tension with protection of property
rights,The United States,for example,countenances the use of official discretion to or-
der the destruction of property without compensation when it is deemed to be necessary
to public safety in times of emergency,A public official can destroy property to create a
firebreak or can order animals killed to prevent the spread of disease without the need to
offer compensation to the property owner whose investment is sacrificed to the public
Property Rights Systems and the Rule of Law,page 27
________________________________________________________________________
good.
81
Administrative agencies can render decisions on licenses that dramatically re-
duce the value of the license or that take licenses away from holders who have invested
substantially in them without compensating the injured party.
82
Property owners and de-
velopers have complained that officials have required them to provide cash payments for
new schools,for roads,for water and sewer improvements,for affordable housing pro-
jects,to support a council for older citizens,to fund the local park department,or to de-
fray costs of general services.
83
In each case,the assertion by the owner is that some per-
fectly reasonable use of their property is held hostage to exactions that unreasonably bur-
den the property,
Real property is especially vulnerable to such discretionary exactions,Whether
reasonable or not,the quid pro quo for use of the property takes advantage of the prop-
erty’s immobility,Because the owner cannot remove the property to another jurisdiction,
local regulators can – subject only to the limits of political possibility – impose condi-
tions up to the value of the improvement,This is,in effect,the mirror image of the hold-
out problem that justifies forced takings by the state.
84
Various forces,such as the effects
of repeat play between developers and regulators and competition among jurisdictions for
the investments that secure property rights induce,may constrain the exercise of official
discretion.
85
But in almost any regime with captive property (property subject to a single
regulating authority) and costly monitoring of official behavior,there will be at least
some residual discretion,It seems,then,that the existence of discretion,even discretion
that can visit substantial harm on property rights owners,is not clear evidence of a regime
departing from the rule of law,
Property Rights Systems and the Rule of Law,page 28
________________________________________________________________________
Indeed,some discretion may be necessary to support the rule of law,Economic
analysis of legal rules suggests that there is an optimal degree of precision that is consis-
tent with social welfare,a degree less than total precision.
86
The point is not simply that
precision is costly to achieve,Too much precision also can generate such complex rules
that there will be costs to rule application that exceed any gains from the increased preci-
sion,Some degree of discretion in rule application,thus,will be welfare-enhancing,
The same conclusion must be true in respect of the rule of law,One requisite of
the rule of law is predictability in the application of rules based on the rules themselves,
Efforts to eliminate all discretion doubtless would produce a body of rules so complex
and cumbersome as to make the application of rules less predictable,not moreso,In fact,
overly complex rules may generate more effective discretion than simpler rules overtly
conferring a degree of discretion on rule enforcers,The goal for rule of law purposes,
hence,is not to eliminate discretion but to find a level of discretion that is consistent with
predictability and constraint,
In evaluating the experience in Zimbabwe,however,the finer points of this debate
need not detain us,The discretion conferred on Mugabe by the Presidential Powers
(Temporary Measures) law was virtually unlimited both in the subjects on which Mugabe
could legislate and in the nature of the legislation he could enact.
87
And Mugabe used
that discretion not to effect a land reform program that would apply neutrally to those
who are similarly situated,instead tilting for and against favored and disfavored groups,
Wherever the line lies between permitted discretion cabined by law,on the one hand,and
discretion so broad as to erode a sense of legitimate governance under law,on the other,
that line places the authority conferred on Mugabe outside the bounds of the rule of law,
Property Rights Systems and the Rule of Law,page 29
________________________________________________________________________
Changing Personnel
As with the other issues that draw Zimbabwe’s actions into question,the change
in the identity of the judges who interpret the law must be seen as something that violates
the rule of law because of its particulars,not because any change – even any change
aimed at altering the law – is illegitimate,The rule of law requirement of principled pre-
dictability means that the identity of the individuals who interpret the law should not mat-
ter,The legal rules themselves should have sufficient specificity and sufficient binding
force to allow prediction of their application without knowledge of the particular individ-
ual who will interpret the rules.
88
If that is not so,not only will the system lack princi-
pled predictability,it also will lack the legitimacy that comes with adherence to external
authority.
89
If those who interpret and apply the law have sufficient discretionary author-
ity that their identity is critical to the outcome,it can hardly be said that the laws rule,
even if it can be said that the nominal rulers – the political officials holding primary posi-
tions of power and authority in government – do not,
This much is fairly common ground,a basis for agreement among those who fa-
vor relatively expansive modes of judicial interpretation and those who favor relatively
constrained modes,for those who believe that the laws can and do provide determinate
structure for judicial decisions and for skeptics on those matters.
90
What is debated quite
vigorously is how much the laws actually do constrain and how much freedom judges
actually enjoy over the disposition of issues that come before them,It is a debate about
how much judges matter,and to some degree which judges matter,
In the United States,this debate has been quite visible in the public domain re-
cently,It may be especially important in the United States,not only because so many
Property Rights Systems and the Rule of Law,page 30
________________________________________________________________________
matters come before courts,but also because courts exercise somewhat broader powers in
America than in most other nations.
91
A subcommittee of the United States Senate has
held several hearings on the extent to which ideology does and should matter in the work
of judges and in the selection of judges,The focus of those hearings,as of most debate
on these issues,was on judges on the nation’s highest appellate courts,These courts de-
cide a tiny fraction of the judicial cases filed in America and address legal issues that are
least governed by fully articulated external authority,Plainly,for these courts more than
the general run of,ordinary” courts,the identity of judges matters,as the greater open-
ness of governing law increases the influence of all manner of other considerations that
doubtless vary across individuals.
92
The officials in the executive branch will care who
these judges are,and so,too,will members of the opposition party,Each will endeavor
to appoint individuals who will tilt toward preferred outcomes on important,contested
matters,
On its face,this endeavor looks to be a direct contradiction to the rule of law re-
quirement that the legal authority,rather than the law interpreter,should govern,So,
what makes the endeavor to select judges sympathetic to particular views consistent with
the rule of law? What,in other words,makes the United States in this respect unlike
Zimbabwe?
First,as with the concentration of discretionary power over legislation under the
Presidential Powers law,the selection of judges in Zimbabwe looks to be much more
subject to the will of a single individual than is the case in the United States,In the
United States,the President appoints members of the federal government’s judiciary,but
he can do so only if he is able to secure agreement from the United States Senate,agree-
Property Rights Systems and the Rule of Law,page 31
________________________________________________________________________
ment that has been famously lacking in numerous instances,The credible threat of rejec-
tion colors the nomination and appointment process,In Zimbabwe,the President selects
judges and is only required to consult with a judicial service commission,not to secure its
approval.
93
If the commission disapproves,the President informs parliament,but there is
no provision for parliamentary disapproval of the selection.
94
Beyond the confirmation of individual judges,in the U.S,the Congress prescribes
the number of judges authorized for the various federal courts,Although presidents have
from time to time proposed changes to the number of judges – most notably President
Franklin Roosevelt’s plan to add members to the Supreme Court in order to facilitate its
acceptance of key aspects of his program
95
– politically inspired changes rarely are
adopted,Roosevelt’s plan,for example,was not enacted,
In Zimbabwe,the number of judges,even of the Supreme Court,is subject to
fairly easy manipulation,The President can designate the number of judges he,deems
necessary” to sit on the Supreme Court.
96
And if the Chief Justice decides that more are
needed (not a defined term in the constitution) on a temporary basis (also not defined),he
can appoint additional judges to the Supreme Court for a term of his choosing.
97
In com-
bination,the President and a Chief Justice sympathetic to him can have a powerful im-
pact on the size and shape of Zimbabwe’s highest court,
Without effective opposition,the President of Zimbabwe can select judges who
are most likely to be cooperative on the matters of greatest immediate interest to him,and
with the added ability to set the judges’ terms of office can also replace them later to se-
cure desired outcomes on other matters,If he needs additional judges to secure a major-
ity that bypasses the entire sitting Supreme Court bench,he can add the requisite number,
Property Rights Systems and the Rule of Law,page 32
________________________________________________________________________
That is what occurred in the land reform saga,the selection of enough cooperative judges
to secure a particular result in a particular case of importance to the nation’s chief execu-
tive,This is not the overlay of politics on a judicial decision process that is otherwise
insulated from politics,It is not the subjection of judicial selection to the pull and tug of
competing political forces,Instead,it is the substitution of concentrated political power
for judicial independence,
Second,perhaps in response to the pressure that can be brought to bear by the
President,the process of judging in Zimbabwe does not at the end of the day look so well
insulated from political influence as in the United States,Notwithstanding the very pub-
lic criticisms of the U.S,appellate courts for decisions characterized as overly political,
U.S,courts,including appellate courts,behave in a manner highly predictable from the
governing law,Courts show precious little influence of politics,And U.S,courts,in-
cluding those thought to be most subject to ideological influence,are amazingly often in
accord regardless of the political background of the deciding judges.
98
Efforts to influ-
ence selection of judges to courts that operate strongly under the rule of law necessarily
look less threatening than efforts to select judges whose behavior post-selection is far
more apt to reflect the views of the selecting authority,
There are,of course,contrary assertions about the roles of politics and political
pressure on the U.S,judiciary,Some scholars view the U.S,judiciary as quite affected by
political considerations.
99
Episodes such as the change in law during the new deal era of
the 1930s and 1940s,when the U.S,Supreme Court first struck down economic regula-
tion and then in short order upheld similar legislation,are explained as responses to po-
litical pressure,specifically in this case to the Roosevelt court-packing plan,The change
Property Rights Systems and the Rule of Law,page 33
________________________________________________________________________
of a single vote,shifting a 5-4 majority against legislation’s constitutionality to a 5-4 ma-
jority in favor,could be a simple response to political pressure.
100
But it also could be the
product of a single justice thinking more about a difficult,closely contested issue,to the
influence of additional conversations,to the impact of seeing additional fact patterns – to
any of the myriad nonpolitical factors that can affect decisions where legal texts are rela-
tively open,Doubtless,considerations external to the narrowest view of legal texts influ-
ence some decisions even in the most law-bound systems,But a fair view of the legal
system in the United States,as in other Western democracies,still must conclude that
there is quite strong insulation of judging from politics and precious little evidence of any
direct influence from political officials,This stands in marked contrast to the situation in
Zimbabwe,
In sum,the reason that the steps taken in Zimbabwe to undermine property rights
and to alter legal rules violate rule of law values is not that there is a generic conflict with
the type of action – with efforts to change legal rules,to redistribute property,to provide
discretion to official decision makers,or to appoint judges congenial to the executive,
The steps taken violate rule of law values because each oversteps the bounds within
which such conduct may be said to permit reasonable certainty about the law and to per-
mit legal rules to operate free of undue control by current rulers,
Conclusion
Governance systems that limit official discretion to impair property rights,that have insti-
tutions and rules that provide clear definition to property rights and that provide predict-
able and consistent applications of those rights,will accord with the rule of law and gen-
erally will also advance social welfare,Some systems will depart quite evidently from
Property Rights Systems and the Rule of Law,page 34
________________________________________________________________________
this pattern,to the detriment of those societies,allowing too ready changes in law at the
discretion of too few officials,too unconstrained by law,But differences between the
good and the bad will not be drawn along simple,discrete lines,The systems most con-
sistent with the rule of law will not be able effectively to bar all changes in the law or to
eliminate official discretion,Instead,those systems will limit the avenues for change and
the ambit of discretion in ways that make property more secure and impositions on it
more predictable without reference to the identity of the individual official enforcing the
law or the individual property owners subject to it,Those will be the legal analogues of
Tolstoy’s happy families,
Endnotes
*
Dean and Melville Madison Bigelow Professor of Law,Boston University School of
Law; Senior Fellow,International Centre for Economic Research,Thanks for helpful
comments (and absolution for remaining errors) are due to Randy Barnett,Jack Beer-
mann,Bob Bone,Ward Farnsworth,Tamar Frankel,Pnina Lahav,Gary Lawson,David
Lyons,Allan Macurdy,Bob Seidman,Ken Simons,and to participants in the Boston
University Law Faculty Workshop,This paper will be published as a chapter in THE
ELGAR COMPANION TO PROPERTY RIGHT ECONOMICS (2003),Enrico Colombatto ed.,
Cheltenham,United Kingdom,Edward Elgar Publications,
1
See Randy Barnett (2001),The Structure of Liberty,Justice and the Rule of Law,Ox-
ford,Clarendon Press,pp,136-144; Ronald A,Cass (2001),The Rule of Law in Amer-
ica,Baltimore,Johns Hopkins University Press,pp,xi-xii,3 [hereafter,Cass,Rule of
Law]; W,Burnett Harvey (1961),‘The Rule of Law in Historical Perspective’,Michigan
Law Review,59(4),487-500,
2
See,e.g.,Gerald P,O’Driscoll,Jr.,Kim R,Holmes and Melanie Kirkpatrick (2001),
Index of Economic Freedom,Washington,DC,Heritage Foundation,
3
See O’Driscoll et al.,supra,
4
See,e.g.,A.V,Dicey (1915),An Introduction to the Study of the Law of the Constitu-
tion,8th ed.,London,Macmillan,p,198 ; Michael Oakeshott (1983),‘The Rule of Law’,
in Michael Oakeshott,On History and Other Essays,Totowa,NJ,Barnes & Noble
Books,pp,119,157-164; Antonin Scalia (1989),‘The Rule of Law as a Law of Rules’,
University of Chicago Law Review,56 (4),1175-1188,
Property Rights Systems and the Rule of Law,page 35
________________________________________________________________________
5
See,e.g.,Joseph W,Singer and Jack M,Beermann (1993),‘The Social Origins of Prop-
erty’,Canadian Journal of Law and Jurisprudence,6(2),217-248,
6
See,e.g.,Goldberg v,Kelly,387 U.S,254 (1970); Board of Regents v,Roth,408 U.S,
564 (1972),
7
See,e.g.,Richard Pipes (1999),Property and Freedom,New York,Alfred A,Knopf,
pp,5-29; John Christman (1994),The Myth of Property,New York,Oxford University
Press,
8
See,e.g.,Christopher Berry,‘Two Replies to Locke – Hume and Hegel’,in J,Roland
Pennock and John W,Chapman (eds) (1980),NOMOS XXII,Property,New York,New
York University Press,pp,89-99,
9
See,e.g.,Neil Komesar (2002),Law’s Limits,Cambridge and New York,Cambridge
University Press,pp,125-155; Pipes,supra,pp,39-63,225-264; Charles R,Donohue,Jr,
(1980),‘The Future of the Concept of Property Predicted from its Past’,in J,Roland
Pennock and John W,Chapman (eds) (1980),NOMOS XXII,Property,New York,New
York University Press,pp,28-58,
10
See,e.g.,Yoram Barzel (1997),Economic Analysis of Property Rights,2nd ed.,Cam-
bridge,UK and New York,Cambridge University Press; Christman,supra; Friedrich A,
Hayek (1960),The Constitution of Liberty,Chicago,University of Chicago; Liam Mur-
phy and Thomas Nagle (2002),The Myth of Ownership,Oxford and New York,Oxford
University Press; Robert Nozick (1974),Anarchy,State,and Utopia,New York,Basic
Books; John Rawls (1971),A Theory of Justice,Cambridge,Mass.,Harvard University
Press; Harold Demsetz (1967),‘Toward a Theory of Property Rights’,American Eco-
nomic Review Papers and Proceedings,57(2),347-359; Thomas W,Merrill and Henry E,
Smith (2001),‘What Happened to Property in Law and Economics?’,Yale Law Journal,
111(2),357-398; Charles Reich (1964),‘The New Property’,Yale Law Journal,73(5),
733-787,
11
This line differs from that drawn by scholars who distinguish property rights from
other rights along remedial lines,with property rights enforceable through injunctions
and other rights providing only an entitlement to money damages,See,e.g.,Lucien Arye
Bebchuk (2001),‘Property Rights and Liability Rules,The Ex Ante View of the Cathe-
dral’,Michigan Law Review,100(3),601-639; Guido Calabresi and Douglas Melamed
(1972),‘Property Rules,Liability Rules and Inalienability,One View of the Cathedral’,
Harvard Law Review,85(6),1089-1128,
12
In federal systems with multiple levels of government,more than one government may
affect property,But the significant point is that the property is not movable to avoid the
edict of the relevant authority,
13
See,e.g.,O’Driscoll,et al.,supra,
Property Rights Systems and the Rule of Law,page 36
________________________________________________________________________
14
This assumes that regulation imposes greater burdens on those whose property is af-
fected than the benefits conferred on them through regulation,That is not the same as
assuming that regulation has negative net welfare effects for society as a whole,though
many commentators have made that case for economically advanced democracies as
well,
15
See,e.g.,W,Mark Crain and Thomas D,Hopkins (July 2001),The Impact of Regula-
tory Costs on Small Firms,[Washington,DC],U.S,Small Business Administration (put-
ting the figure in excess of $840 billion for the United States); Thomas D,Hopkins
(1994),‘The Costs of Federal Regulation’,Journal of Regulation and Social Costs,2(1),
5-31,
16
Tapan Munroe,‘Economies of U.S,and Japan’,Contra Costa Times,Sep,22,2002,
17
Securities and Exchange Commission (2002),‘Table 15,Value of Stocks Listed on
Exchanges’,SEC Annual Report 2001,[Washington,DC,U.S,Government Printing Of-
fice],p,169 (putting the figure at more than $11.7 trillion),This figure was from 2000,
and there has been substantial erosion in the U.S,stock markets since then,making the
figure unreliable as a precise measure of current worth,Still,the point in text holds,the
value of U.S,stock holdings is very substantial,Further,the stock figure does not in-
clude the value of the very large number of businesses that do not have publicly traded
shares,
18
Constitution of Massachusetts,Declaration of Rights,article 30 (1780,authored by
John Adams); David Hume (1742),Essays,Moral,Political,and Literary,reprinted
Eugene F,Miller (ed.) (1985),Indianapolis,Liberty Classics,p,94,A similar phrase is
found in James Harrington (1656),Commonwealth of Oceana,reprinted J.G.A,Pocock
(ed.) (1992),Cambridge and New York,Cambridge University Press,
19
See,e.g.,Lon Fuller (1969),The Morality of Law,rev,ed.,New Haven,Yale Univer-
sity Press,pp,38-81 [hereafter Fuller,Morality]; Frederick Schauer (1991),Playing by
the Rules,A Philosophical Examination of Rule-Based Decisionmaking in Law and in
Life,Oxford,Clarendon Press,
20
Friedrich A,Hayek (1944),The Road to Serfdom,Chicago,University of Chicago
Press,p,80 [hereafter Hayek,Serfdom],
21
Cass,Rule of Law,supra,pp,3-19,
22
See,e.g.,Oakeshott,supra,
23
See,e.g.,Cass,Rule of Law,supra; O’Driscoll et al.,supra,
24
Barnett,supra,pp,136-144; Cass,Rule of Law,supra,pp,15-17; Joseph Raz (1979),
The Authority of Law,Essays on Law and Morality,Oxford,Clarendon Press,pp,213-
214,224-226,
Property Rights Systems and the Rule of Law,page 37
________________________________________________________________________
25
Human Rights Watch (2002),‘Fast Track Land Reform in Zimbabwe’,Human Rights
Watch A,14(1),p,6,
26
Human Rights Watch (January 2002),Submission to Commonwealth Ministerial Ac-
tion Group,[New York,Human Rights Watch],p,4 [hereafter,Human Rights Watch
Submission],
27
Human Rights Watch,supra,p,6,
28
Human Rights Watch,supra,p,7,
29
Human Rights Watch,supra; Thomas W,Mitchell (2001),‘The Land Crisis in Zim-
babwe,Getting Beyond the Myopic Focus on Black and White’,Indiana International
and Comparative Law Review,11(3),587-603,p,599,But see Zimbabwe government
web site,
30
Constitution of Zimbabwe,§ 16A,Human Rights Watch,supra,p,10; ‘Parliament Ap-
proves Land Reform Bill’,World Markets Analysis,April 7,2000,
31
Human Rights Watch,supra,pp,10,13; Human Rights Watch Submission,supra,p,
15,
32
Human Rights Watch,supra,p,11,
33
See ‘Zimbabweans Reclaim Birthright’,The Herald (Harare),Dec,10,2002,Although
it is the only figure I have found for this time frame,it is not entirely clear that this is a
credible figure,Other sources list under 4.5 million hectares as resettled a year earlier
with a little more than 9 million hectares scheduled by the government for acquisition,
See Human Rights Watch,supra,p,11,It would seem unlikely that eighty percent of the
land potentially to be acquired would so quickly have passed out of the control of the
land owners,It is possible,however,that the figure is high because it includes land that
is occupied by squatters even though not formally listed for potential acquisition by
government,See Human Rights Watch,supra,p,13,
34
‘The Great Terrain Robbery’,The Economist,Aug,17,2001,p,37; Human Rights
Watch,supra,
35
See,e.g.,The Economist,supra; PRS Group (Dec,1,2001),Zimbabwe,Politics,East
Syracuse,NY,PRS Group; Daniel Foggo,‘VC Hero Forced Off Land by Mugabe
Thugs’,Sunday Telegraph,Dec,8,2002,p,3,See also Commercial Farmers Union v,
Minister of Lands,Agriculture & Resettlement,Zimbabwe Supreme Court,Judgment No,
SC-132/2000,Dec,21,2000,
36
See Human Rights Watch Submission,supra,pp,14-15,
37
Commercial Farmers Union v,Minister of Lands,Agriculture & Resettlement,Zim-
babwe Supreme Court,Judgment No,SC-132/2000,Dec,21,2000,
Property Rights Systems and the Rule of Law,page 38
________________________________________________________________________
38
See,e.g.,PRS Group (Sep,1,2002),Zimbabwe,Country Highlights,East Syracuse,
NY,PRS Group; ‘Magistrates Put Under Pressure in Land Rulings’,Zimbabawe Inde-
pendent,Sep,20,2002,The former Chief Justice,Anthony Gubbay,apparently had re-
ceived numerous death threats following the ruling on land reform,See,e.g.,Human
Rights Watch Submission,supra,p,15,
39
Human Rights Watch Submission,supra,p,15,
40
Human Rights Watch Submission,supra,p,15,
41
See,e.g.,Barnett,supra,pp,89-90; Fuller,Morality,supra,pp,38-81; H.L.A,Hart
(1961),The Concept of Law,Oxford,Oxford University Press,pp.123-128; Oliver
Wendell Holmes,Jr,(1897),‘The Path of the Law’,Harvard Law Review,10(8),457-
478; Bernard Siegan (1997),Property and Freedom,The Constitution,the Courts,and
Land-Use Regulation,New Brunswick,NJ,Transaction Publishers,
42
Hayek,Serfdom,supra,p,80,
43
See,e.g.,Fuller,Morality,supra; Holmes,supra,
44
See,e.g.,Henningsen v,Bloomfield Motors,32 NJ 258,161 A.2d 69 (1960),
45
See,e.g.,Penn Central Transportation Co,v,New York City,438,U.S,104 (1978),
46
See,e.g.,Richard Epstein (1985),Takings,Private Property and the Power of Eminent
Domain,Cambridge,Mass.,Harvard University Press [hereafter,Epstein,Takings]; Sie-
gan,supra,
47
See,e.g.,James M,Buchanan and Gordon Tullock (1962),The Calculus of Consent;
Logical Foundations of Constitutional Democracy,Ann Arbor,University of Michigan
Press; Dennis E,Mueller (1989),Public Choice II,Cambridge,England,Cambridge Uni-
versity Press,pp,43-55,101-111,
48
See,e.g.,Buchanan and Tullock,supra; Epstein,Takings,supra,
49
Epstein,Takings,supra,
50
This has been a staple part of the long-running argument over use of Kaldor-Hicks-type
efficiency criteria for governmental decisions,
51
See,e.g.,Louis Kaplow (1986),‘An Economic Analysis of Legal Transitions’,Harvard
Law Review,99(3),509-617,
52
See Ronald A,Cass (1995),‘Judging,Norms and Incentives of Retrospective Deci-
sion-making’,Boston University Law Review,75(4),942-996; Lon Fuller (1978),‘The
Forms and Limits of Adjudication’,Harvard Law Review,92(2),353-409,
Property Rights Systems and the Rule of Law,page 39
________________________________________________________________________
53
See,e.g.,Goldberg v,Kelly,387 U.S,254 (1970),
54
Compare Londoner v,Denver,210 U.S,373 (1908),with Bi-Metallic Investment Co,
v,State Board of Equalization,239 U.S,441 (1915),
55
U.S,Constitution,Article I,§ 9,clause 3; Constitution of Colorado,Article V,§ 25;
Constitution of Georgia,Article 3,§ 6,? 4; see United States v,Lovett,328 U.S,303
(1946),
56
U.S,Constitution,Article I,§10,clause 1,
57
See,e.g.,Manigault Springs,199 U.S,473 (1905),For a similar construction of the
due process clause of the U.S,Constitution,see Mugler v,Kansas,123 U.S,623 (1887),
58
See,e.g.,Fletcher v,Peck,10 U.S,87 (1810); Sturges v,Crowninshield,17 U.S,122
(1819),
59
See Richard A,Epstein (1984),‘Toward a Revitalization of the Contracts Clause’,
University of Chicago Law Review,51(3),703-751,
60
See,e.g.,Ruckelshaus v,Monsanto Co.,467 U.S,986 (1984),
61
U.S,Constitution,Amendment V,clause 5,
62
See,e.g.,Penn Central Transportation Co,v,New York City,438,U.S,104 (1978),
63
See,e.g.,Nollan v,California Coastal Commission,483 U.S,825 (1987); Loretto v,
Teleprompter,458 U.S,419 (1982),
64
Nollan v,California Coastal Commission,483 U.S,825 (1987),
65
Lucas v,South Carolina Coastal Council,505 U.S.1003 (1992),
66
Dolan v,City of Tigard,512 U.S,344 (1994),
67
See Siegan,supra,But see Komesar,supra (arguing that the tests correct for some
types of welfare-reducing incentive problems but exacerbate others),
68
Of course,that statement puts a bit of a rabbit in the hat by assuming that regulators are
motivated to improve overall social welfare – an assumption that is routinely called into
question,The literature on public choice (among other writings) suggests numerous ways
in which government officials’ incentives diverge from pursuit of overall social welfare,
See,e.g.,Buchanan and Tullock,supra; Mancur Olson (1965),The Logic of Collective
Action,Cambridge,Mass.,Harvard University Press; Kenneth A,Shepsle and Mark S,
Bonchek (1997),Analyzing Politics,Rationality,Behavior,and Institutions,New York,
W.W,Norton,
Property Rights Systems and the Rule of Law,page 40
________________________________________________________________________
69
In part,the rules increase congruence with the rule of law by making it more likely that
official decisions will be reasonable,Reasonableness is a relevant concern when there is
not a clearly formulated,formally promulgated regulation,See Cass,Rule of Law,supra,
pp,12-15; Fuller,Morality,supra,p,138; Schauer,supra,It also is relevant to interpreta-
tion of formally promulgated regulations,where a construction that produces unreason-
able results could lack sufficient predictability to meet rule of law requisites,See Fuller,
Morality,supra; Schauer,supra,pp,222-223,
70
These amendments primarily have expanded the democratic franchise,filled in details
for government continuity,or granted rights against government power to groups that had
been especially vulnerable,
71
See,e.g.,Cass,Rule of Law,supra,pp,34-45,
72
See,e.g.,Mitchell,supra,
73
See Jay Winik (2001),April 1865,The Month That Saved America,New York,Peren-
nial,p,34,Lincoln previously had by executive order decreed the freedom of slaves in
states that were engaged in armed rebellion against the federal government,
74
See,e.g.,Florida Indian Claims Settlement Act,25 United States Code § 1741 et seq.;
Maine Indian Claims Settlement Act,25 United States Code § 1721 et seq.; Rhode Island
Indian Claims Settlement Act,25 United States Code § 1701 et seq.; William C,Canby,
Jr,(1998),American Indian Law,3rd ed.,St,Paul,Minn.,West Publishing Co.,pp,343-
364,
75
See United States v,Sioux Nation,448 U.S,371 (1980); Canby,supra,pp,352-353,
76
See Hawaii Housing Authority v,Midkiff,467 U.S,229 (1984),
77
Alexis de Tocqueville (1848),Democracy in America,reprinted Henry Reeve (trans.)
(1899),London,UK and New York,Longmans,pp,360-61,I am indebted to Allan
Macurdy for bringing this quotation to my attention,
78
See,e.g.,James J,White and Robert S,Summers (1995),Uniform Commercial Code,
4th ed.,St,Paul,Minn.,West Publishing Co.,vol,1,pp,186-190,
79
See Cass,Rule of Law,supra,pp,12-18,
80
See,eg.,Dicey,supra; Fuller,Morality,supra,pp,86-91; Hart,supra,pp,119-120,
195-207; Raz,supra,pp,206-209,
81
See,e.g.,W,Page Keeton,Dan B,Dobbs,Robert E,Keeton and David G,Owen
(1984),Prosser and Keeton on the Law of Torts,5th ed.,St,Paul,Minn.,West Publishing
Co.,p,146; George C,Christie (1999),‘The Defense of Necessity Considered from the
Legal and Moral Points of View’,Duke Law Journal,48(5),975-1042,
Property Rights Systems and the Rule of Law,page 41
________________________________________________________________________
82
See,e.g.,Ronald A,Cass (1982),‘RKO,A Special Kind of Lottery’,Media Law
Notes,9(4),p,2,
83
See,e.g.,Maryls Duran,‘Growing Pains,As Rural Areas Expand,Schools Feel the
Crunch’,Denver Rocky Mountain News,Nov,28,1999,p,48A; Miguel Navrot,‘Devel-
oper Questions City Action’,Albuquerque Journal,Sep,30,2000,p,1; Mia Taylor,
‘Builders Often Face Questionable Requests’,Patriot Ledger,Sep,25,1999,p,1; Mark
Vosburgh and Christoper Quinn,‘Developer Says Withholding Building Permits Is Ex-
tortion’,Plain Dealer,Jan,22,2002,p,B2; Lesley Wright and Anne Ryman,‘Scottsdale
May Force Builder,Schools Talks’,Arizona Republic,Aug,6,2002,p,1B,
84
See,e.g.,Epstein,Takings,supra,
85
Repeat play might moderate or exacerbate regulators’ incentives to impose exactions,
Competition among jurisdictions should work strictly to moderate those incentives,but
just how such competition works is a subject of some dispute,See,e.g.,James M,Bu-
chanan and Charles J,Goetz (1972),‘Efficiency Limits of Fiscal Mobility,An Assess-
ment of the Tiebout Model’,Journal of Public Economics,1(1),25-43; Charles M,Tie-
bout (1956),‘A Pure Theory of Local Expenditures’,Journal of Political Economy,
64(5),416-424,
86
See,e.g.,Colin S,Diver (1983),‘The Optimal Precision of Administrative Rules’,Yale
Law Journal,93(1),65-109; Isaac Ehrlich and Richard A,Posner (1974),‘An Economic
Analysis of Legal Rulemaking’,Journal of Legal Studies,3(1),257-286,
87
Presidential Powers (Temporary Measures) Act,Zimbabwe,Chapter 10:20,
88
See,e.g.,Cass,Rule of Law,supra,pp,16-18; Michael Dorf (1995),‘Prediction and
the Rule of Law’,UCLA Law Review,42(3),651-715,
89
Cass,Rule of Law,supra,pp,18-19; Schauer,supra,
90
See,e.g.,Dorf,supra; Ronald Dworkin (1986),Law’s Empire,Cambridge,Mass.,
Belknap Press; Frank H,Easterbrook (1991),‘What’s So Special About Judges?’,Colo-
rado Law Review,61(4),773-782; Scalia,supra; Joseph Singer (1984),‘The Player and
the Cards,Nihilism and Legal Theory’,Yale Law Journal,94(1),1-70,
91
See,e.g.,Richard A,Posner (1996),Law and Legal Theory in England and America,
Oxford and New York,Clarendon Press,
92
Cass,Rule of Law,supra,pp,62-71,84-97,
93
Constitution of Zimbabwe,§ 84 (1),
94
Constitution of Zimbabwe,§ 84 (2),
Property Rights Systems and the Rule of Law,page 42
________________________________________________________________________
95
See,e.g.,William E,Leuchtenberg (1966),‘The Origins of Franklin D,Roosevelt’s
“Court-Packing” Plan’,Supreme Court Review,pp,347-400,
96
Constitution of Zimbabwe,§ 80 (2)(b),
97
Constitution of Zimbabwe,§ 80 (3),
98
See,e.g.,Cass,Rule of Law,supra; Ronald A,Cass (September 2002),The DC Cir-
cuit,Considering Balance on the Nation’s Second-Highest Court,statement to Subcom-
mittee on Administrative Oversight and the Courts of Senate Committee on the Judiciary,
99
See,e.g.,Richard L,Revesz (1997),‘Environmental Regulation,Ideology,and the
D.C,Circuit’,Virginia Law Review,83(8),1717-1772 (1997),
100
Although President Roosevelt complained about the wrongness of a 5-4 decision in-
validating legislation,some of the critical decisions prior to the court-packing plan were
9-0 against the legislation while others were 8-1 in favor,Much attention afterward fo-
cused on a single 5-4 decision upholding a key piece of New Deal legislation,

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