Locating distribution

Abstract

Unlike many practitioners of the economic analysis of law, Louis Kaplow and Steven Shavell take distributional issues seriously: that is, they acknowledge that the choice of a social welfare function (SWF) will involve attention to distributive issues. (The suggestion in their book that notions of fairness should receive no independent weight is an artifact of their idiosyncratic definition of "fairness," which the present paper criticizes.) But although they do take distributional issues seriously, Kaplow and Shavell are too eager to relegate them to the foundational level at which the SWF is constructed. This paper explores the possibility that distributional considerations may play a midlevel role as well. They may play a role as rules of thumb, or they may play a more robust role reflecting their status as constraints on the construction of an acceptable SWF.