Social scientists have paid insufficient attention to the role of law in constituting the economic institutions of capitalism. Part of this neglect emanates from inadequate conceptions of the nature of law itself. Spontaneous conceptions of law and property rights that downplay the role of the state are criticized here, because they typically assume relatively small numbers of agents and underplay the complexity and uncertainty in developed capitalist systems. In developed capitalist economies, law is sustained through interaction between private agents, courts (...) and the legislative apparatus. Law is also a key institution for overcoming contracting uncertainties. It is furthermore a part of the power structure of society, and a major means by which power is exercised. This argument is illustrated by considering institutions such as property and the firm. Complex systems of law have played a crucial role in capitalist development and are also vital for developing economies. (shrink)

The economic theory of contract is being reshaped in ways which resonate with the findings of socio-legal contract scholars and of industrial economists and sociologists in the Marshallian tradition, who emphasise the 'embeddedness' of organizations within their social and cultural environment. Contractual co-operation is seen as depending on institutional factors which serve to enhance 'trust', and arrangements which in the past were criticized as the product of collusion are being reassessed as potentially efficient responses to market failure. An active debate (...) has begun on how instruments of public policy can best be deployed to arrive at an effective balance between co-operation and competition. This affects both the competitiveness of private sector organizations and the success of deregulatory reforms in the public sphere. These issues are explored within four main areas: developments in private-sector contracting; contract and organization in the public sector; the economics of contract law; and competitiveness and competition policy. (shrink)

A vast amount of empirical research has been compiled on labor laws yet more is called for in view of the rapid changes occurring in this field. This article discusses the attempts to individualize the relationship, as well as make labor markets more flexible. A sociological perspective on the post-war situation viewed the industrial system as stable and self-adjusting. The article emphasizes the emergence of new data sources and methods and considers the role of theory in shaping the empirical research (...) agenda. Labor legislations only provide the structure within which collective bargaining would occur, while abstaining from directly influencing the outcome. This article reviews the state of the art on a number of substantive issues: the law governing collective labor relations; minimum wage laws; employment protection legislation; the operation of labor courts and alternative dispute resolution mechanisms; and the relationship between labor law and corporate governance systems. (shrink)