Marriage Contracts and the Law-and-Economics of Marriage: an Austrian Perspective

Marriages and firms share many characteristics in common. Both institutions deal with a set of promises between two parties and therefore need contracts to encourage individual parties to stand by their promises and commitments. Despite these similarities, in most countries marriage laws are statutory laws that have little in common with commercial contract laws. We present the Chicago and neoclassical perspectives on Law-andEconomics, with a special emphasis on marriage laws. According to this framework, it is possible to explain the way traditional marriage laws have regulated exchanges between husbands and wives in Western countries such as France, when these countries were patriarchal societies. We also consider the case of egalitarian marriage, and show some of the limitations of any statutory marriage laws. We then present a critical perspective on the Law-and-Economics literature on marriage. Our critique is based on the economic literature by Austrian economists and by public choice theorists. We emphasize the knowledge problem, the problem of interest, and the problems associated with government monopoly in coercion. Our concluding section presents some suggestions regarding a legal system inspired from international commercial contract law. By not giving any particular government a monopoly on the power to enforce marriage contracts such system would avoid some of the problems found in the systems of statutory laws currently regulating marriage and divorce in the Western world. Forthcoming, the Journal of Socio-Economics. An earlier version of this paper was presented at the Meetings of the Society for the Advancement of Behavioral Economics held in June 1999 at San Diego State University.