How the law and the social norm interact with each other in the legalized modern society, whether the law completely replaces the pre-existing social norm or they coexist, and whether their interaction achieves an efficient system of social rules or there is innate inefficiency, have remained...

This paper deals with the interaction between informal sanctions imposed by social norms and formal sanctions authorized by law. While some scholars claim that the formal rule merely substitutes for the informal rule, other authors argue that formal and informal rules are complementary. If the...

This paper derives formulae that show the marginal benefits of public inputs in second-best economies with tax distortions. The values of the change in the aggregate net output vector (and in some cases the change of profit income) evaluated at appropriate shadow prices show their marginal...