“Private Property” and the Dakota Access Pipeline

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Since the announcement of the Dakota Access Pipeline (DAPL) in 2014, which was planned by Energy Transfer Partners for the transport and access of the Bakken oil fields, it has gained traction as a controversial initiative because of its environmental impact, the threat it poses to water supply and its effect on Native American sacred lands. Since August 2016, a group of protestors have been organizing on the Standing Rock Indian Reservation petitioning against the U.S. Army Corps of Engineers and protesting at the actual site of the pipeline (see this New York Times article). While the violence surrounding the pipeline is within itself shocking, the media coverage has been extremely polarized on the issue. Often falling along partisan lines, “liberal” news sources oppose the pipeline on humanitarian grounds and “conservative” sources support it, but both forms of media glean their conclusions about the pipeline from uncritical understandings of the conflict. Both sources ignore that, at the heart of the issue, are issues surrounding what private property is and the consequences of our chosen definition. Instead of taking for granted colloquial definitions of property we can see the underlying distributional inequality inherent to the pipeline by critically assessing how property and law interact.Read More »

Beyond the Third Moment in Law and Development: New Insights from Legal Political Economy

This blog post provides insights from what I have come to call the legal political economy perspective to critique the World Bank and neoclassical economics more generally. At the heart of what has been called the World Bank’s Third Moment in Law and Development is the claim that government involvement is necessary to eliminate “market failures” and promote both business development and social justice.

In contrast to the mainstream Law and Economics (L & E) approach, which informs the Third Moment, my position, derived from the Critical Legal Studies (CLS) tradition (and its historical ancestor, Legal Realism), is:

  • Property is fundamentally a bundle of rights and thus property ownership at its core entails coercive power struggles between rivals and between owners and non-owners; coercion at its core.
  • The interrelatedness of law and power relations (“If the program of Realists was to lift the veil of legal Form to reveal living essences of power and need, the program of the Critics is to lift the veil of power and need to expose the legal elements in their composition” (Gordon 1984, 109)). These power struggles over economic outcomes occur within the context of background laws that determine property, contracts, and torts.
  • The notion of an economic seesaw in Hale’s framework with potential for instability in property and contractual relations.
  • If the goal is to understand how legal structures shape power struggles then the question becomes how are the laws themselves to be determined? Following the CLS perspective, I would emphasize the role of ideational factors determining the intellectual underpinnings of neoliberal policies—factors that have consciously been created by the financiers of the L & E tradition.

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Rethinking the Law and Economics Paradigm

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As a step toward that ideal it seems to me that every lawyer ought to seek an understanding of economics. The present divorce between the schools of political economy and law seems to me an evidence of how much progress in philosophical study still remains to be made. In the present state of political economy indeed, we come again upon history on a larger scale, but there we are called on to consider and weight the ends of legislation, the means of attaining them, and the cost.’ (Oliver Wendell Holmes; 1897) [1]

The World Bank’s policy focus shifted in the 1990s from a market-oriented paradigm to other issues such as social justice, poverty reduction and “market failures”, where institutions had to play a greater role [2]. Known as the Post-Washington Consensus or the Third Moment in Law and Development, this new paradigm emphasizes the importance of “good governance”, the implementation of property rights for economic growth, and makes the following proposition: well-defined and formalized property rights lead to market efficiency, economic growth and development. Hence, since then the establishment of the “rule of law” has become the new goal to reach for developing countries.

However, this Law and Economics paradigm relies on a narrow set of theoretical assumptions and is heavily influenced by neoclassical views of the state, the market and overall competition. But this framework raises some questions: (a) are these assumptions empirically valid, namely is the implementation of property rights a necessary condition for economic growth and development? And (b) are “perfect competition” and “market failures” reliable concepts one should start from to cope with development – if by such term we mean a social and economic process that will ultimately increase human well being?Read More »