The Liability of Public Authorities: An Economic Analysis

Traditional economic analysis of accident law has largely focused on individual utility maximising actors as potential injurers and victims. On that basis a huge literature has been developed since the early publications of Calabresi in the 1960's explaining under which conditions particular liability rules may be effective in promoting social welfare. Moreover, the theoretical assumptions made in the literature have increasingly been met with empirical support. However, less attention has been paid to the situation where the tortfeasor is not an individual actor or a commercial enterprise, but rather a public authority. Only relatively recently have some articles started to explore public authority liability. The goal of our contribution is to provide an overview of this literature.