The colour of the judge's eyes: Efficiency as a criterion for the legislature and for the courts

Should courts adjudicate to promote efficiency in the economy, or should co urts be content to apply the law as they find it? The literature of law and economics has much to say about how to identify efficiency in the construc tion of the law, but little to say about whose business it is to promote ef ficiency in the law, in so far as efficiency is warranted. It is argued in this paper that efficiency belongs to the legislature and that adjudication for efficiency by the courts is self-defeating. "It is strange that a doctrine as faulty as that developed by Pigou should have been so influential, although part of its success has probably been du e to the lack of clarity in the exposition. Not being clear, it was never c learly wrong. Curiously enough, this obscurity in the source has not preven ted the emergence of a fairly well defined oral tradition''.