Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Customary Law

  • Bruce L. BensonEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_515


Customary law, a system of rules of obligation and governance processes that spontaneously evolve from the bottom up within a community, guides behavior in primitive, medieval, and contemporary tribal societies, as well as merchant communities during the high middle ages, modern international trade, and many other historical and current settings. Rules and procedures are recognized and accepted because of trust arrangements, reciprocities, mutual insurance, and reputation mechanisms, including ostracism threats. Negotiation (contracting) generally is the most important source for initiating change in customary law. Such agreements only apply to the parties involved, but others can voluntarily adopt the change if it proves to be beneficial. An individual also may unilaterally adopt behavior that others observe, come to expect, and emulate, or a dispute may arise that results in an innovative solution offered by a third party and voluntarily adopted by others. Many different third-party dispute resolutions procedures are observed in different customary communities, but they generally involve experienced mediators or arbitrators who are highly regarded community members. Some of these adjudicators may have leadership status, but leadership arises through persuasion and leaders do not have coercive authority. Since there is no coercive authority, protection and policing rely on voluntary arrangements, and community norms encourage and reward such activity. People who violate rules are generally expected to and have incentives to compensate victims for harms. Customary law is polycentric, with hierarchical arrangements to deal with intercommunity interactions. Customary law also may conflict with authoritarian law. When this occurs, a coercive authority may attempt to assert jurisdiction over a customary-law community, but this will have very different impacts depending on the options available to members of the community. The authority often adopts and enforces some customary rules in order to avoid conflict.

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© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of EconomicsFlorida State UniversityTallahasseeUSA