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Polish Yearbook of Law and Economics. Vol. 1 (2010) - ebook/pdf
Polish Yearbook of Law and Economics. Vol. 1 (2010) - ebook/pdf
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Wydawca: C. H. Beck Język publikacji: polski
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This first volume of the Polish Yearbook of Law & Economics contains a collection of papers delivered at 1st Polish Law & Economics Conference, which opened a new chapter in the development of Economic Analysis of Law in Poland. More than 100 scholars, students and practitioners were participants of the Conference on May 6, 2010 at the University of Warsaw. It was organised by the Polish Association of Law & Economics (PSEAP) in cooperation with the Centre for Economic Analyses of the Public Sector (CEAPS) at Faculty of Economic Sciences of the University of Warsaw and four students’ associations active in the fields of economics and law at the University of Warsaw.

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Polish Yearbook of Law Economics Editors: Jarosław Bełdowski Katarzyna Metelska-Szaniawska Louis Visscher Vol. 1 (2010) strYearbook 9/14/11 1:08 PM Page 1 Polish Yearbook of Law Economics strYearbook 9/14/11 1:08 PM Page 2 Authors: Prof. Stefan Voigt Institute of Law and Economics, University of Hamburg Prof. Paweł Chmielnicki University of Information Technology and Management in Rzeszów Dr. Waldemar Florczak Chair of Econometric Models and Forecasts, University of Łódê Dr. Oles Andriychuk ESRC Centre for Competition Policy, University of East Anglia Janusz Paczocha Economic Institute, The National Bank of Poland Dr. Wojciech Rogowski Economic Institute, The National Bank of Poland; Warsaw School of Economics Dr. Agata Kocia Faculty of Economic Sciences, University of Warsaw Wojciech Deja Legal advisor trainee; Student at Faculty of Economic Sciences, University of Warsaw Michał Gintowt Student at Faculty of Law and Administration, University of Warsaw Piotr Semeniuk Student at Faculty of Law and Administration, Jagiellonian University Anna Laszczyk Student at Faculty of Law and Administration, University of Warsaw Piotr Ziółkowski Student at Faculty of Law and Administration, University of Warsaw Jarosław Bełdowski Collegium of Economic Analyses, Warsaw School of Economics Dr. Katarzyna Metelska-Szaniawska Faculty of Economic Sciences, University of Warsaw Dr. Louis Visscher Erasmus School of Law, Erasmus University Rotterdam strYearbook 9/14/11 1:08 PM Page 3 Polish Yearbook of Law Economics Editors: Jarosław Bełdowski Katarzyna Metelska-Szaniawska Louis Visscher Vol. 1 (2010) Wydawnictwo C.H. Beck Warszawa 2011 Publisher: Anna Chojnacka/Anna Wieczorek Editing: Aleksandra Kalinowska Proofreading: Dominika Drygas Cover by: GRAFOS Cover illustration by: © iStockphoto.com/Yury Kuzmin Publication financed by: – Faculty of Economic Sciences at University of Warsaw – University of Warsaw Foundation – Student Scientific Movement Council at University of Warsaw – University of Warsaw Students’ Union – BRE Bank Foundation Copyright © Wydawnictwo C .H . Beck Warszawa 2011 Wydawnictwo C .H . Beck Sp. z o.o., ul. Bonifraterska 17 00–203 Warszawa, tel. (22) 33 77 600 Typesetting: Studio Graficzne MIMO, Michał Moczarski Printing and binding: Elpil, Siedlce ISBN 978-83-255-2871-3 ISBN e-book 978-83-255-2872-0 CONTENTS Section I. INTRODUCTION ................................................................. Chapter 1. Law and Economics in Poland – the Past and Present at a Glance (Jarosław Bełdowski, Katarzyna Metelska-Szaniawska, Louis Visscher) ............................................................................................... 1.1. A short account of the history of Law and Economics ................... 1.2. Polish contributions to the first wave of Law and Economics ........ Congresses of the Society of Polish Lawyers and Economists ............................................................................. The Legal and Economic Journal .......................................... Leon Petrażycki’s work .......................................................... 1.3. Recent developments in Law and Economics in Poland ................. 1.4. Contents of the Yearbook .................................................................. References ................................................................................................... Section II. FEATURED ARTICLE ....................................................... Chapter 2. New Trends in Law and Economics: The Economic Effects of Constitutional Law (Stefan Voigt) .......................................................... 2.1. Introduction ....................................................................................... 2.2. Normative Constitutional Economics .............................................. 2.2.1. Methodological Foundations ................................................. 2.2.2. Giving Efficiency another Meaning ....................................... 2.2.3. Critical Evaluation of Normative Constitutional Economics .............................................................................. 2.3. Positive Constitutional Economics .................................................... 2.3.1. Constitutional Rules as Explanandum .................................. Procedures for Generating Constitutional Rules ................... The Relevance of Preferences and Restrictions for Generating Constitutional Rules ........................................... Explicit Constitutional Change ............................................. Implicit Constitutional Change ............................................. 2.3.2. Constitutional Rules as Explanans ........................................ The Horizontal Separation of Powers in General .................. 1 3 4 7 7 9 10 12 14 16 23 25 25 26 26 27 28 28 29 29 29 30 31 32 32 V Contents Form of Government: Presidential vs. Parliamentary Systems ................................................................................... Unicameral vs. Bicameral Systems ......................................... Direct-democratic vs. Representative Institutions ................. Individual Rights and Economic Growth .............................. 2.4. Outlook ............................................................................................... References ................................................................................................... Section III. ARTICLES ............................................................................. Chapter 3. Correlations Between Long-Term Trends in the Economy and the Law-Making Process (Paweł Chmielnicki) ................................... 3.1. Introduction ....................................................................................... 3.2. Theoretical assumptions of relationships between long-term trends in the economy and quantitative changes in the law-making process ........................................................................... 3.2.1. The notion of a normative set ................................................ 3.2.2. Resonance effect of the operation of normative sets ............. 3.3. Selected results of empirical research ............................................... 3.3.1. Research methodology ........................................................... 3.3.2. Long-term trends in the law-making process ........................ Rules governing the acquisition of goods due to being a member of a community ..................................................... Nash criterion ........................................................................ Rationally justified criterion .................................................. Ringelmann effect .................................................................. 3.3.3. Correlations between economic data and law-making data ........................................................................................ Positive correlation ................................................................ Correlation with a shift ......................................................... Negative correlation ............................................................... 3.4. Summary ............................................................................................. References ................................................................................................... Chapter 4. An Empirical Macroeconomic Model of Crime for Poland (Waldemar Florczak) ................................................................... 4.1. Introduction ....................................................................................... 4.2. Economic theory of crime / rational choice theory ......................... 4.3. Empirical models of crime ................................................................ 4.4. Indicators of crime ............................................................................. 4.5. Measuring punishment in empirical models of crime .................... 4.6. Social costs of crime – estimation for Poland .................................. 4.7. Empirical outcomes ........................................................................... 4.8. Can one compare the reporting of offences before and after the year 1990? .................................................................................... VI 33 34 35 36 38 39 43 45 45 46 46 50 53 53 54 54 55 56 57 58 58 60 61 63 64 67 67 69 71 73 73 80 83 87 4.9. Contribution of the analysed factors to changes in crime .............. 4.10. Final comment .................................................................................. References ................................................................................................... Appendix I. Tables ..................................................................................... Appendix II. Testing for stability ............................................................. Chapter 5. Do Markets Ever Fail? Reconciling the Consequentialist and the Deontological Approaches to the Market Process (Oles Andriychuk) .......................................................................................... 5.1. Market process as the economic aspect of liberal democracy ........ 5.2. Market as political virtue .................................................................. 5.3. Addressing the problem of axiological bargaining ......................... 5.4. Dialectical approach to the market process ..................................... 5.5. Do Markets Ever Fail? ........................................................................ 5.6. Conclusions ........................................................................................ References ................................................................................................... Chapter 6. Regulatory Restrictions of Doing Business in Poland. A Quantitative Account of Regulations in 1989– 2009 (Janusz Paczocha, Wojciech Rogowski) .......................................................... 6.1. Introduction ....................................................................................... 6.2. Overview of existing related research .............................................. 6.3. Aspects and objectives of the study .................................................. 6.4. Methodology of the regulatory restrictions’ study .......................... 6.4.1. Definitions and typology ....................................................... 6.4.2. Research method ................................................................... 6.5. Research results .................................................................................. 6.5.1. Concessions ............................................................................ 6.5.2. Business activity permits ....................................................... 6.5.3. Admissions of products, goods and services to market ......... 6.5.4. Authorisation for operation of equipment and installations .................................................................... 6.5.5. Production and trade limits ................................................... 6.5.6. Business activity licences ....................................................... 6.5.7. Admissions to a profession .................................................... 6.5.8. Economic activity notifications ............................................. 6.6. Conclusions and recommendations .................................................. References ................................................................................................... Chapter 7. Tax System as an Institutional Factor Attracting Investment into the European Union Countries (Agata Kocia) .............. 7.1. Introduction ....................................................................................... 7.2. Models of institutional tax competition and location of enterprises .......................................................................................... 7.3. Mainstream economic theory and location of enterprises in the EU ............................................................................................. 7.4. Tax systems and investment attractiveness of the EU countries .... Contents 90 93 93 97 108 113 113 117 119 121 123 124 125 127 127 131 136 139 139 142 143 143 145 146 146 147 147 147 147 148 152 155 155 155 161 163 VII Contents 7.5. Investment attractiveness of the EU countries and economic growth ................................................................................................ 7.6. Conclusion .......................................................................................... References ................................................................................................... Appendix .................................................................................................... Chapter 8. Public-Private Partnership Misuse: Case Study (Wojciech Deja) .............................................................................................. 8.1. Introduction ....................................................................................... 8.2. Literature review ................................................................................ 8.3. Econometric methodology ................................................................ 8.4. Results ................................................................................................. 8.5. Conclusions ........................................................................................ References ................................................................................................... Appendix 8A. Estimation procedure ........................................................ Appendix 8B. Diagnostic tests .................................................................. Appendix 8C. Selection of fractional response variables models – justification ...................................................................................... 164 168 168 170 179 179 181 183 185 188 190 192 195 196 Section IV. STUDENT SECTION ........................................................ 197 Chapter 9. Asymmetrical Distribution of Information – A Rationale behind Implied Warranty (Michał Gintowt) ............................................. 9.1. Introduction ....................................................................................... 9.2. Coase theorem: efficient allocation and transaction costs ............. 9.3. Asymmetrical distribution of information – the source of transaction costs ................................................................................ 9.4. Implied warranty – a general overview ............................................ 9.5. Implied warranty – preconditions for efficiency ............................. 9.5.1. Asymmetric information costs .............................................. 9.5.2. Productivity of information ................................................... 9.5.3. Existence of good-faith premium .......................................... 9.6. Implied warranty – efficiency and game theory .............................. 9.7. Non-verifiable information – the warranty and signalling ............ 9.8. Conclusions ........................................................................................ References ................................................................................................... Chapter 10. Economic Analysis of Humanitarian Intervention in the Light of the Report Prepared by the International Commission on Intervention and State Sovereignty (Piotr Semeniuk) ... 10.1. Introduction ..................................................................................... 10.2. Rationality of humanitarian intervention – philosophical aspect ................................................................................................ 10.2.1. Structural analogy ............................................................... 10.2.2. The theory of the firm and the responsibility to protect ..... 199 199 200 200 202 204 204 204 205 205 207 209 209 211 211 212 212 215 VIII 10.2.3. Defining humanitarian intervention using the structural analogy and the theory of the firm ..................................... 10.3. Rationality of humanitarian intervention – technical aspect ...... 10.3.1. Actual victims, potential victims, victims of the intervention ......................................................................... 10.3.2. Severity of measures during humanitarian intervention .... 10.4. The comparison between the Report of the Commission and economic analysis of humanitarian intervention .................. 10.4.1. Causes of intervention ......................................................... 10.4.2. Responsibility to prevent, react, rebuild and criteria of intervention ..................................................................... 10.5. Conclusions ...................................................................................... References ................................................................................................... Chapter 11. More Economic Approach in the European Union Competition Law – the Appraisal of New Methods and Future Prospects (Anna Laszczyk) ........................................................................... 11.1. Introduction ..................................................................................... 11.2. Traditional approach vs. consumer welfare – the aim of competition law ............................................................................... 11.3. More economic approach to mergers ................................................. 11.4. More economic approach to vertical agreements ............................. 11.5. More economic approach to abuses of dominant position .............. 11.6. Conclusions ...................................................................................... References ................................................................................................... Chapter 12. The Economic Analysis of Limited Liability and Piercing the Corporate Veil in Corporate Groups. Conclusions for Polish Law (Piotr Ziółkowski) ................................................................ 12.1. Introduction ..................................................................................... 12.2. The Coase theorem .......................................................................... 12.3. Economic goals of liability and PCV .............................................. 12.4. Examples of PCV ............................................................................. 12.5. Ex contractu vs. ex delicto liability ................................................ 12.6. Limited liability in corporate groups ............................................. 12.7. Conclusions ...................................................................................... References ................................................................................................... Contents 216 217 218 219 220 220 221 222 223 225 225 226 229 232 236 239 240 243 243 244 245 247 248 250 250 251 IX Section I INTRODUCTION Chapter 1 Law and Economics in Poland – the Past and Present at a Glance Jarosław Bełdowski (Warsaw School of Economics) Katarzyna Metelska-Szaniawska (University of Warsaw) Louis Visscher (Erasmus University Rotterdam) The birth of Law and  Economics, an interdisciplinary scientific movement focusing on studying the law with the use of methods and tools of economics, is widely assumed to have taken place at the University of Chicago, which nurtured in the last century such prominent scholars as Ronald Coase, Gary Becker, Richard Posner, to name just a few. However, it would be naive to assume that Economic Analysis of Law1 sprang onto the surface just like Athena did from Zeus’ head – with fully equipped armour. The development of Law and Economics has rather been a long process and it is no surprise that history of this scientific movement is often divided into periods (e.g. by Hovenkamp 1990, Mackaay 2000). The so-called first wave of Law and Economics embraces the second half of the 19th century and first half of the 20th century, whereas the second wave stretches from the second half of the 20th century up till now. In recent literature it is often emphasized that Law and Economics has only materialized in Poland in the 21st century, a few years ago – together with the publishing of several works of Polish authors on various aspects of Economic Analysis of Law and, in particular, with the establishment of the Polish Association of Law and Economics. Indeed, because of the iron curtain, which sealed off Poland and other Central and Eastern European countries from the West after the Second World War, the contribution of scholars from these countries to the second wave of Law and Economics has 1 Law and Economics and Economic Analysis of Law are two names used equivalently for the discussed scientific movement. For another view, see Deakin (1999) and Miller (2011). 3 I. Introduction been marginal, until recently. On the contrary however, Polish involvement in the first wave of Law and  Economics was considerable, but so far has passed virtually unnoticed. Therefore, the main aim of this introduction to the first Polish Yearbook of Law and  Economics (2010) is to rediscover unchartered historical developments of Economic Analysis of Law during the first wave of Law and  Economics in Poland. We begin with a  concise description of the general history of Law and Economics and conclude with a short overview of the current state of Economic Analysis of Law in Poland as well as a description of the contents of this Yearbook, which is the fruit of the 1st Polish Law and Economics Conference. 1.1. A SHORT ACCOUNT OF THE HISTORY OF LAW AND ECONOMICS Interrelations between law and economics have been of interest to philosophers and political scientists virtually from the beginning of mankind. Among the most important scholars who embarked upon those issues were Plato, Machiavelli, Hobbes, as well as representatives of Scottish Enlightenment – David Hume and Adam Smith (Backhaus 2005; Mackaay 2000). However, most influence on the development of Law and Economics is nowadays attributed to Jeremy Bentham who was the forerunner of the economic approach to criminal policy. In particular he is praised for developing the concept of utilitarianism which gave an impulse for studies of non-market behaviour, including the law (Posner 2005). However, it is often emphasized that works of these early scholars do not contain comprehensive studies of law from an economic perspective (Mackaay 2000). The first efforts to systematically combine law and economics research took place in the 19th century in Europe. Although they are quite diversified, one important avenue was to search for an answer to the question how property rights are created in different societies. Earlier concepts referring to natural law were regarded as too limited and unable to explain legal changes, both in the time and cross-country perspective. Furthermore, the first wave of Law and Economics scholars were interested in the breadth of individual and collective rights, as well as problems arising with regard to exploitation of common-pool resources. Eventually, it could be said that those efforts amounted to the attempt of a systematic explanation for the creation and distribution of economic rights and obligations (Pearson 1997, p. 42). The first wave of Law and  Economics had more representatives with an economic background than lawyers. Important contributions are often associated with the Austrian School of Economics and its main representative –  Carl Menger, who was, as a  matter of fact, born in Nowy Sącz –  at that time belonging to Austro-Hungarian Empire (Galicia) but currently to Poland. In addition, there was an important development in the American economic thought towards the end of the 19th century. The emergence of institutionalism brought a new view upon interrelations between legal and economic processes. Its main pursuers were Thorstein Veblen, John Rogers Commons and Wesley 4 1. Law and Economics in Poland – the Past and Present at a Glance Clair Mitchell. Some institutional reasoning about the law is also present in the works of Henry Carter Adams, Richard Theodore Ely, Robert Lee Hale, Walton Hale Hamilton and John Maurice Clark. Although institutionalism failed in terms of challenging the classical approach to economics, it led to the development of two significant movements – Neoinstitutionalism and New Institutional Economics. The latter is sometimes regarded as one of the current schools of Law and Economics (Mackaay 2000). From among scholars with a legal background one should particularly mention the German Historical School, whose members conducted research on the verge of political economy and law (Staatswissenschaft). Among them were such prominent German scholars as Rudolph von Jhering, Wilhelm Arnold, Otto von Gierke, as well as an Englishman – Henry Maine (Mackaay 2000; Backhaus 2005). The boundaries of legal reasoning were also extended in the United States by legal realism represented by its pioneer Oliver Wendell Holmes and his gifted followers –  Karl Llewellyn and Jerome Frank. Along with sociological jurisprudence, developed by Roscoe Pound, this movement was a reaction to legal formalism observed at that time in the United States (Rowley 2005; Mercuro and Medema 2006). Legal realism and sociological jurisprudence gave an important impulse for opening legal studies to economics and sociology, which was naturally a precondition for further development of Law and Economics. Although in the first half of the 20th century one should also note Arnold Plant’s work on economic analysis of property rights and the development of the so-called Freiburg (Ordoliberal) School of Economics in Germany, which became increasingly significant in the first years after the Second World War, these initiatives did not yet directly cause the birth of the second wave of Law and Economics. The crucial events from the point of view of the latter took place not in Europe, but in the United States, more specifically at the University of Chicago. A particularly significant event from the point of view of creating favourable conditions for the development of interdisciplinary teaching was offering the first economist Henry Simons a  position at the University of Chicago Law School. Not only did he concentrate on organizing courses of economics for students of law, in cooperation with Friedrich August von Hayek, he also initiated the so-called Antitrust Project (later headed by Aaron Director) aimed at studying the effects of antitrust regulations. An important impulse for the second wave of Law and Economics was also taking the position at the University of Chicago by Ronald Coase in 1964. The year 1958, when The Journal of Law and Economics was launched in Chicago, is sometimes also regarded as the moment when modern Law and Economics was born. The American Association of Law and Economics named five “founding fathers” of Law and Economics: Ronald Coase, Gary Becker, Richard Posner, Guido Calabresi, and Henry Manne2. Indeed, one of the crucial impulses for the development of post Second World War Law and  Economics was 2 This took place during a plenary session of the Association held on May 24, 1991. 5 I. Introduction expanding traditional economic analysis to new areas by such scholars as Becker and Posner. The former proposed to apply price theory to explain non-market behaviour, e.g. discrimination, family, children, addictions and crime (e.g. Becker 1957, 1968, 1976, 1981). Posner’s Economic Analysis of Law (Posner 1973) became a seminal textbook, with new editions printed every few years (the most recent 8th edition in 2011)3. Posner’s argument according to which common law rules can be regarded as economically efficient (as judges creating them weigh relative costs and benefits of a  given case for parties aiming to provide optimal incentives for their future behaviour) became the topic of lively debate among the second wave Law and Economics scholars for many decades. Two main schools developed within the second wave of Law and  Economics: the Chicago School of Law and  Economics, based on the Chicago School of Economics, represented inter alia by Coase, Becker and Posner; and the New Haven School of Law and  Economics, represented in particular by Calabresi. The New Haven School, although based to a  large extent on the assumptions of the Chicago School, emphasizes the problem of market failures, which should be actively eliminated (Katz 1998). Acceptance for postulating changes in the law by representatives of the New Haven School of Law and Economics is the reason for calling this approach normative, while the Chicago School approach to the law based on the general equilibrium concept is usually classified as positive. Recent Law and Economics literature mentions also other contemporary approaches to studying the law with the use of economics, such as for example the functional approach of the Virginia School combining Law and  Economics scholarship with a  related research program of Public Choice (see e.g. Parisi 2004). Having begun from an economic analysis of the effects of antitrust regulation, during its second wave Law and  Economics has developed in a variety of directions encompassing economic reasoning about the origins and goals of the law and spreading to a wide range of non-market activities, from liability to family matters and crime. Recent developments include inter alia the application of game theory to legal problems, incorporation of behavioural economics (linking economics with psychology) into Economic Analysis of Law, and the development of empirical research including the use of statistical and econometric techniques. During the last decades Law and  Economics has influenced legislation and case law, particularly in the United States and to some extent European Union, and has become an integral part of legal and economic education at various universities in the world including the most prestigious ones. 3 However, it is worth mentioning that Gorgon Tullock’s The Logic of Law (Tullock 1971) is usually regarded as the first book in the field of Law and Economics. The reasons why this publication was not as successful are discussed by Rowley (1998). 6 1. Law and Economics in Poland – the Past and Present at a Glance 1.2. POLISH CONTRIBUTIONS TO THE FIRST WAVE OF LAW AND ECONOMICS Let us now turn to the developments in Poland between 1887 and 1945. To start with it must be emphasized that the political conditions were quite complicated at that time as Poland gradually lost its sovereignty in the second half of the 18th century to its powerful neighbours: Prussia, Austria and Russia. Until 1918 the country remained divided into three uneven parts and was run under five different legal regimes, which were being gradually unified during the period of independence in 1918– 19394. Nevertheless the comparative legal atmosphere contributed to three developments which should attract attention of Law and Economics scholars: firstly, the congresses of the Society of Polish Lawyers and Economists which were initiated in 1887 and were continued for over three decades; secondly, the Legal and Economic Journal („Czasopismo Prawnicze i Ekonomiczne”) that was launched in 1900; and thirdly, the work of Leon Petrażycki whose research aligned substantially with that of other representatives of the first wave of Law and Economics, but its recognition is still limited in the western literature. These three developments are discussed in more detail below. Congresses of the Society of Polish Lawyers and Economists The First Congress of the Society of Polish Lawyers and Economists was organized in Cracow in 1887. Its success could be measured by the number of officially registered participants which reached beyond 350. Speakers of the Congress delivered 9 presentations regarding legal issues and 3 presentations on economic topics (Suligowski 1887). During the Congress several attempts had been made to analyse from an efficiency point of view the model of governing the county in Galicia (excluding vast land areas belonging to manor houses) and the set of competences of the county assembly. In the same vein, some presentations were devoted to the scarcity of credit backed by rural property. With regard to the latter its administrative division was also considered from the point of view of enhancing its productivity. However, it is the revival of legal societies in Cracow and Lviv and their consolidation with economic circles that are considered as the major achievements of the Congress. The Second Congress of the Society of Polish Lawyers and Economists was organized two years later in Lviv. Its agenda was significantly extended to 29 presentations out of which 16 were delivered by legal scholars and 13  focused on economic issues. The topics were highly diversified and 4 The central part of Poland, previously part of the Grand Duchy of Warsaw founded in 1807 by Napoleon, which was transferred to the Kingdom of Poland under Russian rule, was subject to the Civil Code of Napoleon (with some Polish original amendments) as well as Russian legislation. The latter was also applicable in Polish eastern lands annexed to the Russian Empire (now parts of Lithuania, Belarus and Ukraine). The laws of Prussia were applicable in the western part of Poland, whereas Austrian law in the south (Galicia). A  small area was also subject to Hungarian law (now within the borders of the Czech Republic). 7 I. Introduction included for example such problems as emigration and legal succession. Although the number of participants also increased significantly (Suligowski 1890) and several attempts were made to carry out economic analyses of problems related to law, they were still relatively timid. The breakthrough was to come four years later. The Third Congress of the Society of Polish Lawyers and Economists that took place in Poznan in 1893 was smaller in size but more significant in terms of academic outcomes (Pamiętnik Trzeciego Zjazdu 1894). In comparison with previous congresses the presentations delivered in Poznan were focused in majority on property rights. For example, Wojciech Trąpczyński, a Polish lawyer, scrutinized the compulsory sale of rural property with the Prussian enforcement procedure under which such sale could be triggered by the unpaid creditor (Trąmpczyński 1894). The starting point for this analysis was the assumption that the unpaid creditor must be equipped with sufficient legal instruments to collect his debt. Trąmpczyński (1894) found that after the introduction of the new enforcement procedure in Prussia in 1883 the number of unpaid creditors significantly decreased, which allowed him to state his main conclusion that the new law was more efficient than the original procedure. In relation to previous years he also noted that the efficient legal procedure allowed maintaining moderate interest rates for rural credit in Prussia. The issue of rural credit grasped also some interest of economists participating in the congress, interested in its current status in Galicia (Caro 1894) and its availability for Polish small proprietors in Prussia (Wawrzyniak 1894). Summing up, it could be said that the Third Congress was dominated by economic issues. Scholars and practitioners had to wait for over a decade for the Fourth Congress of the Society of Polish Lawyers and Economists. Originally planned in Warsaw it was eventually held in Cracow in a rush in 1906. Issues concerning partitioning property and emigration, introduced earlier in Poznan, were also discussed by participants of this congress but primarily in its economic sessions, while the legal ones concentrated for instance on social factors significant in judicial and administrative proceedings. One could however clearly notice the widening gap between the two professions (IV Zjazd 1907). The Fifth Congress of the Society of Polish Lawyers and Economists took place in 1912 in Lviv. For the first time the agenda included such issues raised by economists as industrialization, labour matters, the functioning of cooperatives and cartels. Meanwhile, lawyers thoroughly discussed the role of the judge in adjudication and internationalization of the cheque and bill of exchange laws (Piąty Zjazd 1913). Even though the cracks between the groups of lawyers and economists had already been visible at that time, it did not yet lead to the dissolution of the Society itself. After Poland regained independence two last congresses had been organized –  in Warsaw (1920) and in Cracow (1922). Thereafter the spirit of cooperation between lawyers and economists remained alive virtually only in Cracow. 8 1. Law and Economics in Poland – the Past and Present at a Glance The Legal and Economic Journal In 1900 a group of scholars from the Faculty of Law and Administration at the Jagiellonian University in Cracow and the Society of Polish Lawyers and Economists succeeded in launching the first edition of the Legal and Economic Journal („Czasopismo Prawnicze i Ekonomiczne”). In the beginning the journal was planned to be a quarterly and after the First World War – a monthly, but it was constantly struggling to keep its pace. The last editions of the journal were printed in 1945. Nevertheless, it was highly praised by the Polish academia and regarded as one of the leading national periodicals. Not unexpectedly one will find there several typical texts for the first wave of Law and Economics. Two of them (Bocheński 1900; Caro 1901) were devoted to the extraction of crude oil. Large deposits of this natural resource were found in the southern part of Poland which at the time belonged to Austria (currently within the borders of Ukraine). The first article made numerous references to the constraints for the development of the oil industry in terms of property rights (Bocheński 1900). The ownership of land was highly dispersed, but there was still an obligation to obtain permission from owners of the area which formed an oil-drilling establishment. Due to this fact a group of intermediaries emerged to collect permissions to drill oil from land owners. There were several proposals put forward to expand the oil industry, especially by allowing drilling in the land without the owner’s consent, but in accordance with a permission given by the state authority. Moreover, the owner of the land was to be remunerated on the basis of fixed calculations of profits obtained by the driller. On the contrary, the second text (Caro 1901) regarded the legal regime as an obstacle to the development of the industry which was flourishing for many years. The state permission was regarded here as a risk since it led to expropriation in the case of which fixed remuneration tied to drillers’ profits was regarded as unreasonably low. Property rights were discussed from a  different angle in another article which concentrated on dysfunctional operation of perpetual books in Galicia (Udziela 1903). The problem was related to some fallacies among which imprecise cadastre maps were the main culprit. Their inaccuracy had a negative impact on the development of Galicia’s economy where agriculture was a dominant sector and disputes over rural property were generating a big slice of judicial business. In addition, the legal concepts adopted within the Austrian Civil Code, further backed by the legal doctrine, were not facilitating business but rather hindering it. For instance, a mistake concerning the title of ownership in the perpetual book did not automatically form a nullifying condition which required, in addition, proving the fault of the party to the transaction. Moreover, the rules regarding multiple ownership gave rise to problems connected with the compulsory sale of property when one co-owner initiated such dissolution of joint ownership. Last but not least one could observe the development of a  statistical approach to the application of criminal law in Austro-Hungarian Empire (Morelowski 1902). The presented analysis was not reduced to the types of crimes committed, but included contributing factors which were divided into 9
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