Vol. 12 No. 7 (July 2002) pp. 332-335

LAW’S LIMITS: THE RULE OF LAW AND THE SUPPLY AND DEMAND OF RIGHTS by Neil K. Komesar. New York: Cambridge University Press, 2001. 206 pp. Cloth $65.00. ISBN: 0-521-80629-1. Paper $23.00. ISBN 0-521-00086-6.

Reviewed by Georg Vanberg, Department of Political Science, University of Wisconsin–Milwaukee.

LAW’S LIMITS is an ambitious book. Professor Neil Komesar criticizes what he perceives as a dominant form of reasoning in legal and judicial scholarship and argues for an alternative mode of analysis. He offers a theory of dynamic change in institutional frameworks over time--the “cycling” theory—and attempts to provide an account of the proper role of courts in a democratic society. Given these daunting tasks and the limited scope of the book--the text is less than 190 pages long--it is perhaps not surprising that the book does not fully succeed on all dimensions. Nevertheless, many readers will find the argument stimulating and provocative.

The book’s main thesis is straightforward but has important implications. Social life inevitably gives rise to conflicts over the spheres of rights and duties of individuals. Institutions, which Komesar defines as “large-scale social decision-making processes” (p. 31), are tools that serve to reduce and solve such conflicts. The three most common institutions in this sense (and the three that Komesar considers throughout the book) are the “market,” the “political process,” and “the courts.” Komesar’s central contention is that all three institutions deteriorate in their ability to provide appealing solutions to social decision problems as the numbers of individuals involved grows or the complexity of the issue to be decided increases. Although all three institutions work well in an environment composed of relatively straightforward issues and a small number of individuals, none can provide clean solutions at high “numbers and complexity.” As a result, in trying to construct a framework for solving conflicts, “at high numbers and complexity, we are more likely to be choosing the best of bad or unattractive alternatives” (p. 24).

One consequence of this, Komesar argues, is that social institutions are likely to be the object of frequent change. Because any existing institutional framework will not provide fully satisfactory outcomes when numbers and complexity are high, dissatisfaction and calls for institutional reform will be common. However, if such calls succeed and a new institution is adopted, the new framework will once again disappoint expectations, and the cycle will begin again. In short, because all institutions are not likely to work perfectly in the high complexity, high numbers environment of advanced industrial societies, social institutions are subject to cycling (p. 141).

A central implication for social science methodology that Komesar draws from this argument is that a common form of academic and judicial analysis (what Komesar calls “single institutional analysis”) is flawed in a fundamental way.

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Single institutional analysis typically consists of an argument that a given institution cannot adequately address a particular issue. As a result, the scholar concludes, responsibility for solving the conflict should be shifted to another institution. (Richard Epstein’s argument for an increased judicial role in policing governmental restrictions of private property is a particular example that Komesar considers in Chapter 5). The problem with this argument, as Komesar points out, is that by focusing only on the shortcomings of one institution, the analysis fails to consider whether the alternative institutional arrangement that is being offered could in fact provide a more appealing solution. If all institutions deteriorate as numbers and complexity increase, a shortcoming in one institution (say, the political process) does not guarantee that another institution (say, the courts) provides a better alternative. Specifically, Komesar contends, demands for more rigorous judicial oversight to rectify perceived problems in the market or the political process (which are typical of much judicial scholarship) usually do not adequately consider the limitations facing courts. The result is an often-unrealistic vision of the judiciary as a “cure all” for inadequacies in markets and in politics.

To avoid this fallacy, Komesar insists, institutional analysis must be COMPARATIVE. Institutions should be seen as “substitute” solutions to social decision problems that have different strengths and weaknesses. Proposals for reform should not simply focus on imperfections in existing institutions, but also consider whether another institutional framework can provide a preferable resolution. This methodological prescription constitutes, in my view, the most important contribution of the book. Komesar reminds us that institutional analysis is more likely to be successful and relevant when it is confined to comparing feasible alternatives, rather than relying on an “implicit assumption…that a perfect or idealized institution is waiting in the wings” (p. 24).

The bulk of the book is dedicated to illustrating this argument, as well as the methodology of comparative institutional analysis, in a study of land use law in the United States before returning to a more abstract discussion of property rights and general implications of the book’s arguments for legal and economic analysis in the closing chapters. Although scholars with a particular interest in property law may find this section of the book with its detailed treatment of recent court decisions on zoning and takings useful, these chapters are likely to be somewhat tedious and less convincing for scholars who are more interested in the general argument. There are several reasons.

One weakness is that Komesar does not provide a clear, theoretical foundation that guides the reader through the argument. Most importantly, he does little to explain the theory of judicial influence/power that underlies the analysis or the factors that impact the ability of courts to be influential in shaping policy. An example can illustrate. In criticizing Epstein and Fischel’s proposals for expanded judicial enforcement of the takings clause to reign in local zoning authorities, Komesar concludes that a major hurdle to such proposals consists in generating compliance. Local zoning boards are likely to resist judicial oversight (see p. 101). Given moderate judicial enforcement powers, courts are therefore not likely to be effective, for “Political jurisdictions subject to strong majoritarian bias can be aggressively uncooperative. They make obtaining

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compliance with court interventions difficult by every delaying and obfuscating tactic that they can employ” (p. 76). In other words, courts simply do not have the power to do what Epstein and Fischel envision. More sensitive to this constraint, Komesar goes on to offer his own preferred solution: Jurisdictional competition among local governments. A system that forces jurisdictions to compete for developers by offering attractive conditions would generate incentives to refrain from “overzoning” and from demanding excessive compensation for negative impacts (p. 117).

However, as Komesar realizes, effective jurisdictional competition presupposes a proper competitive framework. Since jurisdictions that must compete against one another would have an obvious incentive to escape competitive pressures by “rigging the system,” maintenance of an appropriate competitive framework becomes a central issue. How can this framework be sustained? According to Komesar, courts will play a crucial role. In particular, “courts will have to remain active in order to defeat attempts by the municipalities to collude in pricing development rights” (p. 119). This leaves an obvious question: If courts are not sufficiently equipped to oppose local zoning boards successfully, what will make them effective in maintaining a system of jurisdictional competition? Does this solution merely push the enforcement issue back to the next level? Lacking a more detailed, nuanced, and explicit theory that explores the circumstances under which courts can be effective, the book leaves these questions unanswered.

Another weakness of the book is that the argument is centered on existing institutions in the United States. The analysis largely does not consider alternative institutional arrangements, either hypothetical or existent in other advanced industrial democracies. Again, a few examples can illustrate. In discussing the constraints facing courts, Komesar stresses that courts are limited in their ability to grow, primarily by the appellate structure (pp. 40-41). This limitation provides a major hurdle for an increased judicial role, especially as at higher numbers and complexity. Although it may be the case that judicial bodies are more constrained in their ability to expand, this judgment appears to deserve more careful treatment than Komesar provides. Thus, European judiciaries are typically much larger than the U. S judiciary, in part because judicial hierarchies have been split among various areas of law, with separate appellate structures. Similarly, Komesar argues repeatedly that the judicial process is constrained because rules of access systematically discourage small, dispersed injuries with significant aggregate impact from being litigated adequately (see pp. 45-51 on class actions; see also p. 171). However, class action procedures and rules of access are not written in stone. Other judiciaries have experimented with different systems and their experiences provide valuable contrasts (consider, for example, the extremely open rules of access for constitutional challenges in Germany or many Eastern European countries).

This lack of a broader (and, ironically, comparative) focus raises a larger point. Komesar makes a strong case that the institutions he analyzes deteriorate in their ability to provide universally appealing solutions to social conflicts as numbers and complexity increase. Naturally, this raises the question of “second best” outcomes. What can we conclude about the circumstances under which each of the institutions is likely to be the best of

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(admittedly imperfect) alternatives? Although Komesar raises this central question in passing, he does not focus the amount of attention on it that it deserves. To take the point further, the institutions that Komesar considers–the market, the political process, and the courts–are not given, static entities. They exist in various forms and incarnations. Although no institution may ever be “perfect,” different VARIATIONS may work more or less well under different circumstances and, as a result, institutions can be the subject of intelligent institutional design and reform. In this respect, the experiences of other countries, with different institutional variations, would provide a useful comparative framework to consider how changes within the political process, the market, and the courts, might address the central problems Komesar raises. By remaining within the confines of the American case, Komesar largely denies himself the opportunity to address these issues.

To conclude, LAW’S LIMITS is a provocative book. The general methodological argument Komesar makes–that scholars must be careful in their analysis not to rely on implicit assumptions about the efficacy of alternative institutional arrangements they propose but rather to engage in explicit comparative institutional analysis–is important and useful. Nevertheless, the specific incarnation of that advice in the book’s application to land management issues in the U. S. remains less convincing.

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Copyright 2002 by the author, Georg Vanberg.