Documenting Legal Dissonance: Legal Pluralism in Papua New Guinea

Shaun Larcom; Timothy Swanson

doi:10.1515/rle-2013-0013

Article

Documenting Legal Dissonance: Legal Pluralism in Papua New Guinea

Shaun Larcom and Timothy Swanson

Published/Copyright: February 26, 2015

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From the journal Review of Law & Economics Volume 11 Issue 1

Abstract

We examine the problem suggested by the troubled history of legal transplants, the instance of legal pluralism in which an existing territory has a new legal system overlaid on the previously existing customary system. We provide a very simple model for considering the interaction between legal regimes that exist contemporaneously within a single jurisdiction. We demonstrate that, even when the fundamental relationship between such regimes is as substitutes for one another, the existence of negative externalities between enforcement technologies can result in the withdrawal of enforcement efforts. We term this phenomenon legal dissonance – the situation in which legal regimes interact negatively in their production technologies. This model is then applied to the post-colonial state of Papua New Guinea where we use survey data to identify significant negative production externalities in the enforcement of informal law. We suggest that disorder may be the outcome of too much law.

Keywords: legal pluralism; social norms; enforcement externalities

JEL Classification: O17; P48; K42; L51

Acknowledgements

We thank Tim Willems, William Twining, John Braithwaite, two anonymous referees, the editors of this journal and participants in the RegNet seminar series at the Australian National University and the Development Seminar at the Graduate Institute for useful suggestions and discussions on earlier drafts; however all errors remain our own. The authors acknowledge funding from the EU Framework VII project FoodSecure in the completion of this case study.

Appendix

A.1 Unitised decision-making on enforcement

[5]maxpc,psD:ppc,ps.S−cpc,ps

The first-order conditions for optimal expenditures on the two instruments are:

[6]pc∗:∂cc∂pc=∂ppc,ps.S∂pc

[7]ps∗:∂cs∂ps=∂ppc,ps.S∂ps

Assuming that the enforcement and cost of enforcement functions are monotonic and concave with regard to regime enforcement level, i.e.

∂p.∂pc>0, ∂2p.∂pc2<0,∂p.∂ps>0, ∂2p.∂ps2<0 and ∂cc∂pc>0,∂2cc∂pc2=0, ∂cs∂ps>0, ∂2cs∂ps2=0

Then the optimal level of use of either instrument will be (by definition) a decreasing function of the level of use of the other, i.e. dpc/dps<0.

A.2 Optimal conditions for instruments when decision making is decentralised

For eq. [6] the first-order conditions for pc and ps are again:

[8]pcps∗:∂cc∂pc=∂ppc,ps.S∂pc

[9]pspc∗:∂cs∂ps=∂ppc,ps.S∂ps

Note in the first instance that conditions [8] and [9] are identical to eqs [6] and [7], with the difference being the manner in which equilibrium inheres. In this instance two distinct agencies are making the elections regarding pc, ps. We assume that if an equilibrium obtains, it is the Nash equilibrium, and hence we look at the reaction functions to identify how the two agencies will respond to one another’s choices.

Totally differentiating the two conditions to ascertain the slopes of the reaction functions, we can determine the general nature of the relationship between the two legal orders:

[10]dpcdps=−∂2ppc,ps.S∂pc∂ps∂2ppc,ps.S∂2pc

[11]dpsdpc=−∂2ppc,ps.S∂ps∂pc∂2ppc,ps.S∂2ps

Given the assumption of diminishing returns to enforcement effort, the denominators of both conditions are negative. If the numerators are negative in sign this implies that agents will react to one another’s choice as if there is a fundamental substitutability between the choices made by either agency.

And the specification that ∂2ppc,ps.S∂pc∂ps<0 and ∂2ppc,ps.S∂ps∂pc<0 constitutes the basic assumption of substitutability between the instruments, for the increase in efforts supplied to one instrument reduces the optimal level of supply of efforts to the other. So long as these terms are negative, then (under either centralised choice or decentralised) the optimal response to an increase in the effort supplied under one instrument is to reduce the effort supplied via the other.

A.3 Decentralised choice with negative enforcement production externalities

If we keep the modelling assumptions as before, but now account for the existence of negative production externalities, the optimal deterrence objective for each of the two regimes becomes:

[12]maxpcp:ppc,ps.S−ccps,pc

[13]maxpsp:ppc,ps.S−cspc,ps

The first-order conditions (reaction functions) for expenditures under the two distinct regimes are:

[14]pcps∗:∂ccps,pc∂pc=∂ppc,ps.S∂pc

[15]pspc∗:∂cspc,ps∂ps=∂ppc,ps.S∂ps

From the two reaction functions above, it can be seen that each legal order’s marginal cost of enforcement can be affected by the enforcement level undertaken in the other. Each legal order will equate its own marginal cost of enforcement with the marginal benefit of deterring wrongs, and so (with negative production externalities) if efforts at enforcement are being made by the other system, it can raise the marginal costs of undertaking efforts within the other. This will reduce the incentive to undertake efforts within each system.

We can see how the presence of negative externalities in the production technology changes the relationship between the two systems. Through total differentiation, the slope of the reaction functions becomes:

[16]dpcdps=−∂2ppc,ps∂pc∂ps.S−∂2ccps,pc∂pc∂ps∂2ppc,ps∂2pc.S−∂2ccps,pc∂2pc

[17]dpsdpc=−∂2ppc,ps∂ps∂pc.S−∂2cspc,ps∂ps∂pc∂2ppc,ps∂2ps.S−∂2csps,pc∂2ps

We are investigating the issue of whether the efforts remain substitutes under this formulation, i.e. does dpc/dps<0? First the denominators of eqs [16] and [17] are negative on account of the assumption of the concavity of the production function. Then, the entire fraction will remain negative to the extent that the numerators are negative. This requires that the cross-partials are negative. That is, the condition for the instruments remaining as basic substitutes is that:

[18]∂2ppc,ps∂ps∂pc.S−∂2cspc,ps∂ps∂pc<0

The negativity of this expression will be less than when there are no negative production externalities, as only the second term in the above expression will exist in that case. And if negative production externalities are present, then by definition the first term of eq. [18] is positive, reducing the negativity of the overall expression.

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Published Online: 2015-2-26

Published in Print: 2015-3-1

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https://doi.org/10.1515/rle-2013-0013

Keywords for this article

legal pluralism; social norms; enforcement externalities