Abstract
In recent years there have been signs that economists are reacting against the earlier, predominantly theoretical, analysis of external costs; the need for research on the practical questions confronting the policy-maker being recognized. This paper considers the two functions of the law in the treatment of external costs: settling disputes over legal rights; and providing alternative compensation arrangements to the market and tax—subsidy schemes. Conflicts between the possible objectives of legal decisions on rights, and the existence of institutional constraints on the achievements of optimal outcomes, are postulated.
I have benefited greatly from discussions with Keith Hartley, Michael Jones-Lee, Alan Peacock, Charles Rowley, Alan Williams, Jack Wiseman, and members of the University of Sussex economics faculty seminar, and am indebted to Dr E. J. Mishan for comments on an early draft and to Mr G. H. L. Fridman for answers to several legal questions. Remaining errors are the property of the author.
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© 1972 Macmillan Publishers Limited
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Burrows, P. (1972). On External Costs and the Visible Arm of the Law. In: Rowley, C.K. (eds) Readings in Industrial Economics. Palgrave, London. https://doi.org/10.1007/978-1-349-15486-9_3
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DOI: https://doi.org/10.1007/978-1-349-15486-9_3
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-10973-1
Online ISBN: 978-1-349-15486-9
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