Fairness Versus Welfare by Luis Kaplow and Steven Shavell

Critique

June 25, 2002 Discussion

By Luba Berdsley, LEGLR

Lawyer’s Interpretation

• Society objective is to maximize welfare (well-being of individuals)

• Welfare maximization rather than fairness should determine legal rules, including rules for admissibility of case and legal process

• Definition of fairness is unclear though it appears to overlap with the notion of well-being

Quantity of Rights Vs Quality of Justice in Transition Countries

• Explosion of rights without considering the costs

• Inability to enforce due to lack of resources and capacity

• Absence of policies for addressing the trade-off between the rights and cost of their enforcement (“legal policy”)

• External pressures

Policy Implications of the Trade-off between Rights and Costs

• Prioritizing rights and the areas where the state assumes responsibility for their enforcement

• Sensitivity to local capacity– Resources– Human capital

Book’s Value Added

• Shakes the dogma about the absolute values of rights

• Introduces a new dimension to justice sector reform

• Encourages a more realistic approach to development

Remaining Challenges

• Measuring externalities

• Overcoming political pressures

• Integrating the concept of relativity of justice into development theory and practice– By the governments– By the Bank and other donors

Relativity of Justice

• Justice depends on welfare of society and is relative

• Rich countries can always afford more justice than poor countries

• Poor countries should be very selective in what rights they make enforceable

Globalization

• Should we have minimum standards of justice?

• Is the international community equipped to support such standards with external funding?