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Legal Positions and Institutional Complementarities

Legal positions (such as rights, duties, liberties, powers, liabilities and immunities) are linked together by strong institutional complementarities differing from the usual institutional complementarities that have been recently considered by the Economic Literature. Legal positions do not only satisfy the usual conditions of institutional complementarity stemming from the fact legal positions that "fit" each other do marginally better than the ones that do not. They define also legal equilibria characterised by the social scarcity constraint that is typical of positional goods. Legal positions can be considered as positional goods defining equilibrium conditions that may be violated ex-ante but that must hold ex-post as accounting identities. In this sense they define "strong institutional complementarities" supported by the "tight glue" of social scarcity. The positional nature of legal relations implies that "ex-ante" disequilibrium is very likely to arise and to generate a constant oversupply of positions such as rights and powers with respect to correlated positions such as duties and liabilities. Alternative systems of capitalism are characterised by both the "strong institutional complementarities" existing among different legal positions and the "weak complementarities" existing among the legal positions and the other characteristics of the system such as the technology and the nature of the resources. In this way, the "ex-ante" disequilibrium, due to the positional nature of legal relations, can spill over other parts of the economic system.