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The Link between Liability Reforms and Productivity: Some Empirical Evidence

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TORT LAW HAS two principal goals: compensation of injured parties, and optimal deterrence of potential injurers. During the past fifty years, however, changes in legal doctrine have emphasized the compensation goal. Through such changes as the expansion of strict liability, the switch from contributory to comparative negligence, and the rejection of contractual limitations of liability, the tort system has become increasingly a vehicle for insuring individuals against accidental injury. In addition, as Priest points out, common law tort doctrine has also undergone several other, more subtle changes that reflect this change in the law's ambition.


Daniel P. Kessler

Stanford University, Hoover Institution, and National Bureau of Economic Research


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