The Colour of the Judge's Eyes: Efficiency as a Criterion for the Legislature and for the Courts

Correctly or not, Ronald Coase is often credited with the doctrine that courts ought to adjudicate for efficiency, that "the value of production" should serve as the criterion for resolving disputes over the boundaries between property rights. The doctrine that courts ought to adjudicate for efficiency is often contrasted with the older doctrine that it is the business of the courts to apply the law as formulated by the legislature, regardless of whether or not the law is efficient. This paper is an exploration of these doctrines. The doctrine that courts ought to adjudicate for efficiency crumbles on close inspection and is very largely wrong.