Law and Economics Review vol.15, No1 (Sep. 2019)

JLEA◆法と経済学会・第１７回全国大会 講演報告◆□招待講演 １

『 Convergence and then Downstream Divergence 』
日時：2019年7月14日（日）13:20～14:00
場所：駒澤大学 深沢キャンパス（120周年アカデミーホール）

Saul Levmore 教授(University of Chicago
President,American Law and Economics Association）
司会：田中亘（東京大学）

司会：田中 亘（東京大学）
Wataru Tanaka

whole time, and then I hope you’ll ask some questions.

We will begin the afternoon program, the special

But I want to begin a little bit by just saying a few

lectures by invited speakers. We have Professor Saul

words about the American Law and Economics

Levmore, University of Chicago. Professor Kanda

Association because we, in the United States, hope towill introduce our guest of honor.

have more interaction with the Japan Law andEconomics Association. I’d just say a few things but

Hideki Kanda(GraduateSchool of Law, Gakushuin

really my goal is to invite you to come to the United

University)

States next year to Chicago to the annual meeting ofThank you. Let me briefly introduce Professor Saul

the Law and Economics Association.

Levmore. Professor Levmore is currently professor at
the University of Chicago Law School. He is also

Law and economics in the United States is really

President of the American Law and Economics

growing. At the annual conference there will be 300

Association. I am deeply grateful to Professor

people at every session. In each session, at every hour

Levmore for having travelled all the way here fromthere might be between seven to 12 sessions at one

the United States this time. He studied at Yale, andtime. Of these sessions, there might be corporate law,has taught at Virginia and Chicago for long time. He

tort law, tax law, many other sessions at one time.

was Dean of the University of Chicago Law School

People choose what is of interest to them; three papers

for several years. Professor Levmore's work is

are given in each session and then there is time forimmense and wide-ranged – just too much for me toquestions and answers. It’s very American. People

introduce all his work now. Please visit the website ofalways disagree with one another. They never say that

the University of Chicago Law School. Now I will

was really a very good paper. They always say, I

hand over the microphone back to Professor Tanaka.

don’t understand your paper. Here’s my question.
This is the style of law and economics in the United

Wataru Tanaka

States but I promise that if you come to our session

Thank you. We will start the program by Professor

we’ll be a little bit more Japanese and polite.

Saul Levmore: Convergence and then Downstream
Divergence. The floor is yours.

We find also in the American Law and Economics
Association that there are more and more young

Saul Levmore

people who come. Law and economics just before myThank you very much. I am going to speak for not theage group. By my time there was the first set of- 56 -

法と経済学研究1５巻1号(20１9年９月)

法と経済学会

people who did Ph.D.’s in economics and also J.D.’s

law question, asking why we find some legal rules toin law. Before me, there were really some economists

be cross-cultural, true in many countries, while otherin law school but about my age there started being

legal rules are specific to their local cultures. Whenpeople who had both degrees. It’s become very

law has become similar across counties I say it hascommon, and especially because empirical work has“converged.” For example, every legal system we

become very common. At our conference, perhaps

know says you cannot go to your neighbor’s house

one-third or one-half of the papers are empirical,

and steal. A theft is a common rule in every

using available data sets. The young people especiallyjurisdiction. That is what I mean by convergence. I

really like data. They have much more computer

also refer to this as “upstream convergence,” meaningscience training. I think this is the direction of law

it is a basic thing of a legal system. The fact thatand economics in the United States. Perhaps it will

every system has a rule against murder, and anotherswitch back in a few years to more theoretical work oragainst stealing is upstream convergence. If thepractical work about what law firms actually do, or

precise details of these rules differ, this is downstream

government projects actually do, but it just goes up

divergence.

and down. Indeed, there will be sections at themeeting devoted entirely to empirical methods in law

There is upstream convergence in many areas of law.

and economics, along with tax and torts and corporate

Every country we know has a tax system, but tax rates

law, and even criminal law and constitutional law.

and exemptions differ downstream. Almost every

Every area of law now has some law and economics

country we know has a police force, to take anotherpeople in it. My prediction is that this is what will

example. Often we can think of “upstream” as aspects

happen in other countries as well.

of law that developed earlier in time, while
downstream rules are refinements that came later in

We also have a journal, the American Law andtime.

Economics Journal, which I encourage you to read.
It is free online. Perhaps also such a journal will

Let me just say that divergence and convergence candevelop in Japanese. It is a very competitive journal.

be found the other way around. The concepts are not

It is a peer-reviewed journal. The work in it is meantcircular, as I hope to show.

to be accessible to people who do law, to people who
do economics, and people who do both. No special

Every legal system has a rule that tries to discourage

training is required.

people from being negligent, what we call the tort law
system. If I walk over and I kick Professor Kanda in

I recently wrote a paper about which I will speak here

the knee and I break his leg, every legal system says

today. I will also publish an extended version of it inthat’s very bad. We need to discourage that. You must

the American Law and Economics Journal. Perhaps inpay his damages, or maybe even make it a crime.

the future we can develop a joint, international law

There is substantial convergence. Downstream, there

and economics journal, as well as meetings.

is again some divergence in how damages arecalculated. If it is a crime, there is substantial

Again, thank you very much for inviting me.

divergence downstream. Some legal systems might
impose a prison sentence of one month, some for 3**

years, some for 10 years, and so forth. Here too, thebasic point is convergence upstream and divergence

My topic today is about convergence and downstream

downstream. I want to explain why this is true.

divergence in law. I know these are unfamiliar words,

That’s the essential goal of this paper.

but what I mean is to address a general comparative- 57 -

Law and Economics Review vol.15, No1 (Sep. 2019)

JLEA

As for convergence, we can ask why legal systems

that multiple rules might be efficient. Think of tort

seem to share rules? There are familiar explanations,law, and the situation where a tort causes more harmsuch as the fact that countries observe one another andthan would otherwise be the case because thecopy, but we can say more. I have two ideas there.

apparent victim contributed to the loss by also being

One idea is that sometimes there is an efficient rule,

negligent. I need to be discouraged from driving myand it survives. Some rules really work better. Every

car too fast and causing an accident but you also needlegal system adopts such a rule. That’s a very law andto be deterred from jumping into the road from

economics view. If there’s only one way to be

between two parked cars. Economists famously note

efficient, in the long term we expect everybody to bethat there are at least two efficient rules to handle thisefficient or societies will not survive. For example,

matter and deter both of us. One rule is the rule ofhaving a rule against theft is efficient, for otherwise

contributory negligence. If I drive too fast, and I run

people will fight one another, put one hundred locks

you over, I must pay damages. But if you added to theon the doors of their houses, and engage in otheraccident, I can be forgiven from liability. I will still be

costly defensive measures. It was very efficient for

deterred under this “contributory negligence” rule

legal systems to outsource this task to police and abecause I do not know in advance that you will jumpsystem of penalties. This may even be how law began,into the road. You will be deterred, knowing that if

trying to prevent murders and theft. In short, one

you behave negligently you will not collect damages

source of convergence, or similarity across systems, isfrom me, the speeding driver. On the other hand, we

the success of efficient rules.

can have a rule of comparative damages, where theloss is divided between us. This gives me an incentive

Sometimes there is an efficient rule that is unpopular

to drive slowly and also gives you an incentive not to

on moral, political, or ethical grounds. Politicians will

walk negligently. This is a famous law and economics

not want to impose such a rule. Economists might likeexample of multiple efficient rules. Remarkably, wea rule, but other people will find the rule ethicallyonce found divergence among legal systems. Some

unattractive. For example, there is the famous idea

had contributory negligence and some hadadvanced by the economist, Gary Becker, that instead

comparative negligence, Even within the Unitedof punishing people every time they go to a store andStates, different states had different rules. Both weresteal, we could just punish them one in a hundred

efficient, presenting convergence.

times. We can save resources with only occasional
enforcement and then severe penalties. But mostMany years ago, most societies had a contributory

people are horrified by a rule that imposes a 100 year

negligence rule. If I drove too fast and I ran you over,prison term on the unlucky criminal who is caught

I paid. But if you ran out on the street so you’re also

under such a system. It’s morally offensive. Perhaps

inefficient, then you got no money at all. Over time

people can be improved during short prison terms,

most legal systems have moved to comparativeand so forth. In any event, no legal system has the set

negligence rule that I pay some money but I pay lessof rules imagined by Becker-style economists,money if you are also inefficient. I think this is a very

however efficient they may seem. Put in my terms, aninteresting example because most people’s ethicalefficient rule will not necessarily lead to convergence;

sense – something you can glimpse if you ask people

convergence requires that a rule be both efficient andwhich rule they prefer – is that splitting damages

ethically acceptable. If the two do not match, we canwhen both parties misbehave is far superior to an all

expect divergence, especially because different

or nothing rule, forgiving the speeding driver whensocieties might have different ethical sensitivities.

the victim he injures happens also to havemisbehaved.

Another source of divergence derives from the fact
- 58 -

法と経済学研究1５巻1号(20１9年９月)

法と経済学会

Smoking cigarettes provides another example. Law

no legal system gives me $1 million in damages. All

can fine cigarette manufacturers, if they are regarded

legal systems seem to understand if you give me $1

as wrongful for producing a product that causes injury,

million for being hit by a bicycle, I might run out inbut most people will then prefer a rule that limits

front of careless cyclists in order to get hit by them.

these damages in a world where smokers knew of thedanger of cigarette smoking. Sure enough, law has

I think these principles can be found in many areas of

moved in that direction. It looks for a rule that islaw. We have already seen them at work in tort law

efficient but that also matches people’s ethical sense.

and criminal law. For one more example, think of the

In sum, we should expect rules to be the same, topolitical decision about how to manage a police force.

converge, when there’s one rule that’s efficient andIn large and populated societies police forces arewhen it runs together with people’s ethicalefficient to create, upstream as I have called it, andresponsibility. But we should expect rules to be

virtually every society does so. People’s ethicaldifferent, to diverge, when either there are many rules

intuitions favor these creations, in part because theythat are efficient or when people do not share ethical

do not like self-help, when it comes to violence.

sensitivities.

And yet opinions diverge as to the precise sizes ofthese forces, and whether they should operate on foot,And now let us emphasize convergence andin vehicles, or even on horses and bicycles. The

divergence theory with another example. We findcorrect deployment of police is not easily solved withevery legal system penalizing thieves, but

an efficiency analysis, nor is it a matter of shareddownstream there is no ethical or efficiency reason to

ethical judgments.

prefer one length of a prison term over another, withinreason. It is not surprising, then, that we find different

In recent times, and especially in the world of law andlegal systems with different lengths of terms for thiseconomics, it is common to think that empirical work

sort of crime. Economists simply cannot tell us thecan solve these efficiency problems. But it is virtuallymost precise penalty, and people do not have a shared

impossible to fashion an experiment that will tell us

ethical sense of the correct penalty. Some people will

what percentage of police officers should patrol onwant long terms, while others will want to givebicycles. There are so many other variables at stake.

wrongdoers a second chance. With no shared ethical

For this reason, I do not think we will ever findintuition and not even a convincing efficiency

convergence this far downstream, regarding theargument downstream, where the length of the prison

number of police to put on bicycles or on other modes

term is concerned, we find different rules and thusof transportation. As a matter of ethical intuitions,divergence across legal systems.

people might want police on cycles after hearing acrime in a park, where automobiles cannot easily

Consistent with the theory advanced here, sometimes

travel, but this intuition will change over time when

it is the other way around, with downstream

crimes occur in various settings, and when criminals

convergence and upstream divergence. For example,

adjust their “efficiency” conclusions.

legal systems agree that if there are damages for a tort
or a contract, we should not multiply the damages.

Legal systems might converge about the deployment

Economist would say that actual damages areof police, but if so I think this will be because theyefficient; fractional damages would under-deter the

copy one another – and imitation is certainly anothertorfeasor, but multiple damages would constitute asource of convergence.

moral hazard, for some people might hope to be
injured, and might actually cause damages. If a

Convergence and divergence along the lines

bicycle runs into me and causes $5,000 of damages,

suggested here can also be found in our personal lives.

- 59 -

Law and Economics Review vol.15, No1 (Sep. 2019)

JLEA

Parents seem to agree upstream that their children

legal systems especially where we have an efficient

should not be too noisy in public places. But there isrule and also one that’s ethically attractive to people.

no agreement as to the right method of influencing

Politics likes the rule. Economics likes the rule. The

this behavior. Empirical work is hard to find, andmost interesting economics part of the theory is that

ethical intuitions diverge, as we all know. Somewe find downstream divergence precisely whereparents offer rewards for good behavior, some express

economics has difficulty finding the most efficient

displeasure, and others impose penalties, but it isrule.

hardly clear what works best and there is certainly noshared moral sense. I think it’s a good way to explain

Let me try a very different example on you, say

to students how divergence comes about in law, evenvoting.

the simple things in life, how to teach children

earlier, I’m very interested in public choice, again amathematics. Just as we do not agree on ways to

big area in the United States that we count this part ofdiscipline children or teach them mathematics, evenlaw and economics to the extent there are legal

though we agree upstream on the general goal, law

implications. It’s very common in democracies toalso diverges downstream when it comes to specifichave voting. We have good reason to think thatrewards and penalties.

majority vote reaches good results. It draws on what

As you know from a discussion we had

we call the “wisdom of crowds.” We like majority
I think this might be a good place to pause, although I

votes. On the other hand, we’re really not sure how tohave other things to say, because I am hoping you

structure democracy. Should we have one person -have questions to ask

one vote? And then should we elect politicians in
nationwide elections or at the level of localities. If we

Wataru Tanaka

look at fifty democracies, we find fifty different

Thank you very much. The session is until 2 PM. If

organizations or details of these democracies. Again, I

you have any questions from the floor? Professor

would say that upstream they all agree on a certain

Aoki?

kind of majority rule because that seems efficient andalso ethically attractive to them. But it is very hard

Reiko Aoki

(Japan Fair Trade Commission)

downstream to agree on efficiency or ethical matters.

I understand your basic principle that upstream is

As a result, the details of democracies diverge.

convergence, divergence is downstream. The last
example you gave us, police, that it’ll be very difficult

Wataru Tanaka

to do empirical work because there are so many

Thank you so much. Will there be any other questions

factors that would determine whether the policemanfrom the floor? Professor Kanda, please?

would be on a bike or a car or a horse. How far are
you – what factors are you taking into account when

Hideki Kanda

you say divergence due to differences? Is it ethical

It seems to me that it’s difficult to understand why

factors only? You mentioned ethical differences but

there’s more convergence upstream and lesswould you include things like economic situations orconvergence, or divergence, in downstream. You say

things what we would call socioeconomic things as

in some cases the situation is the other way around.

well? That’s the question.

Could I ask you what explains the situation where
there is more convergence upstream, and the situation

Saul Levmore

where less convergence upstream and more

I’m going to repeat the question always to make sureconvergence downstream? If we do not have a good

we understand each other. I understand the question totheory in dividing these two, then the distinction

be: We find convergence, that is agreement, among

between upstream and downstream should just be- 60 -

法と経済学研究1５巻1号(20１9年９月)

discarded.

法と経済学会

example, whike the details of how they do this will
vary, in part because it is difficult to identify the most

Saul Levmore

efficient prison terms and things like that. I’m not

I understand the question to be twofold. First, do I

sure I can do better than that. I think it really goes

have convincing examples of where downstream there

back to the question of why law emerges in the firstis convergence, and upstream is divergence. But theplace. Without it the world would be chaotic, andmore important part of the question as I understoodhumans might even have disappeared, and certainly

was, do I have a theory about why there’s more

would not have formed densely populated areas thatconvergence upstream and less convergence or more

were able to invent and communicate. This also hints

differentiation downstream.

at the idea that “upstream” can be defined as coming
early in time, while “downstream” refers to a later

The only example I gave in the paper, and the one thatevolutionary development.

I noted earlier was the convergence on single or“actual” damages. I think that the amount of damages

In more recent time, people in different societies

paid is a downstream matter. Almost every legal

developed gas powered engines, and eventuallysystem in normal tort cases limits damages to single

automobiles. Upstream there was convergence, butdamages. That’s very downstream. Meanwhile,

downstream, some legal systems suggested or forced

upstream we see divergence. Sometimes there is strict

people to drive on the right side of the road whileliability and sometimes a negligence rule, to take theothers chose the left side. This is downstream

most important example across and within legal

divergence when either rule is efficient. Efficiency

systems. Similarly, sometimes we see comparative

only required agreement to drive on a given side ofnegligence and sometimes we observe contributory

the road.

negligence. There is also divergence – and perhaps
this is more of an upstream example – regarding

And, again, I think the functioning of democracies

retroactive torts liability. When there is liability it canoffers another good example. of that. Voting took root

be described in efficiency or in ethical terms. If wein many parts of the world. It was probably a good

hold an automobile manufacturer liable because it did

way to reach decisions and to prevent revolts by

not put in airbags twenty years ago we aredisgruntled majorities. But how to vote exactly, howencouraging manufacturers to look ahead and comeoften they vote, whether the minister can stay in

up with improvements rather than to fight against

office many years or must leave office after a certain

legislation that requires new safety devices. It might

number of years – these are questions not easily

also appeal to common ethical intuitions to say thatanswered with efficiency in mind or with ethicalthis is a form of strict liability. In any event, there is asensibilities.

great deal of variety on this matter; it is sometimes
known as retroactive lawmaking and sometimes

Here is a final example that still puzzles me. Virtuallysimply a matter of the length of the statutes ofevery society that votes, has a rule requiring elected

limitation.

officials to come from within the jurisdiction. If we in
the United States think you have a great minister, ourThe second part of your question is a comparative law

legal system, like all others, does not allow us to votequestion: if you accept my idea that convergence isfor that person to be our presdent. Corporations can ofmost often found upstream, while divergence iscourse hire successful managers from otheralmost necessarily downstream, then you are asking

corporations, but countries have rules forbidding this

why that is the case. I offered the idea that all legal

seemingly efficient practice. I could argue that all

systems need to discourage killings and theft, forover the world, people have the ethical intuition that- 61 -

Law and Economics Review vol.15, No1 (Sep. 2019)

JLEA

their leaders should come from within – and then thisPerhaps my upstream-downstream distinction isis the course uniformity. But I am not comfortable

arbitrary but I think time and evolution is the answer.

with this answer; I would have expected divergence

When a legal system starts, it does not first say you gohere because efficiency suggests one thing, even if

to prison for four years if you are a thief. It firstcommon intuitions suggest another.

creates the category of theft and over time tinkers
with the punishment. Even if it creates prisons, it

Wataru Tanaka

changes the length of prison sentences. Therefore, I

We have time for just one more short question.

refer to the earlier decision as “upstream,” orJustice Kusano?

fundamental, or earlier in legal development. I am
sure you can think of counter examples, but for me

Koichi Kusano(Justice, The Supreme Court ofthis distinction works fairly well.

Japan)
What exactly do you mean by the dichotomy between

For a possible counter-example, every legal system isdownstream and upstream? I got the impression thatassociated with a nation, and within the nation therethat dichotomy is very close if not identical to theare internal boundaries we call cities or prefectures.

dichotomy between principles and rules. If that were

Here, the evolution might be in the other direction.

the case, it would be quite understandable as

Many local communities were solidified long before

principles tend to converge and rules tend to diverge.

what we know call nations developed. Yet it seems

But if you mean something very different from the

awkward to think of a nation as downstream and a

distinction between rules and principles, please makemunicipality as upstream. The former usually has

the point clear.

control over the latter, even though the latter, themunicipality was developed earlier in time.

Saul Levmore
I was afraid of getting this question. The question is,

I see that my time is up. I want to say, again, thankcan you really distinguish upstream and downstream?

you very much. And, to repeat, please come to our

Maybe you are working a little backwards. When you

own American law and economics meeting. I will try

see rules differ, you’re calling it downstream. Whento send more of my colleagues to your law andyou see rules are the same, you are just saying it’s

economics meetings, and especially so because of the

upstream. But really how do know where to draw theexcellent work of the translators you so thoughtfullyline between the two? Is this really different from aprovided. Thank you so much.

famous difference between principles and rules orstandards and rules?

Wataru Tanaka
Thank you very much.

- 62 -