How Do Civil Law Legal Institutions React to Ex-Ante Transaction Costs? A Focus on Italian Regulation

Abstract

This paper aims to investigate the role of contracts and property as fundamental tools for achieving market efficiency, analyzed through the lens of Law and Economics. The contract is presented as a tool for optimal resources allocation, where the transfer of goods and rights enhances individual and social welfare. However, transaction costs, particularly ex-ante costs, often hinder the full potential of contractual arrangements, leading to an inefficient use of resources.

The contribution examines how Italian legal Institutions address the ex-ante obstacles, aiming to create a regulatory environment that reduces transaction costs and supports market efficiency.

Additionally, the analysis highlights mechanisms such as third-party arbitration, the contract for a person to be named and pre-contractual liability, all intended to foster balanced, cooperative exchanges that drive economic value. This interdisciplinary approach underscores the complementary nature of legal and economic perspectives, advocating for a legislative model that aligns private law institutions with their inherent economic functions to support market dynamics.