Legal Theory Lexicon: Path Dependency
Introduction
The phrase "path dependency" is used to express the idea that
history matters–choices made in the past can affect the feasibility
(possibility or cost) of choices made in the future. This entry in the
Legal Theory Lexicon introduces this idea to law students, especially first-year law students, with an interest in legal theory.
The General Idea of "Path Dependency"
The general idea of path dependency is
that prior decisions constrain (or expand) the subsequent range of
possible or feasible choices. That is, a decision, d, made at t1 may affect the choice set, S = (c1, c2, . . . cn) at t2. We can define a choice set as a set of actions that a given agent could take. Or
to expand the path metaphor, if we imagine a network of paths through
time, from past to future, decisions to branch at an earlier point on
the chosen path may affect the destinations that one can reach from a
later point on the path. Sometimes, if we choose the left fork, we may be able to reach exactly the same destinations we could have reached via the right fork, but sometimes, our choices foreclose some possibilities altogether. It isn’t always the case that in the long run, there’s still time to change the road you’re on.
The notion of path dependency is
associated with the discipline of economics and also with political
science. In the context of economics, there is a tendency to associate
"path dependency" with effects on the costs of various options. But
the phrase "path dependency" can be (and is) used in a more general
sense–to encompass the ideas of feasibility and possibility. The
terminology doesn't matter for its own sake, but it is important to be
clear about the meaning of the phrase when discussing path dependency.
Specifying Parth Dependency
This general notion of path dependency can be specified in various ways–(1) by the type of effect, (2) by causal mechanisms, and (3) by remediability. Each of these ideas requires further explanation.
The Type of Effect First, we can specify the type of effect that d1 has on the choice set. One type of seffect is an effect on which actions are members of the choice set. Thus, by making a decision d at t1, the resulting choice set at t2 would have members c1, c2, and c3, but if the decision had been d′ (d prime), then the choice set at t2 would have members c1, c3, and c4. In this illustrative case, making decision d rather than d′ both added and subtracted from the choice set at t2. Another type of effect is an effect on the costs associated with the actions that are members of the choice set. That is, decision, d, might result in the price of a given choice P(c1) being greater than that price would have been if an alternative decision, d′, had been made. Notice,
however, that if we include price in the specification (or description)
that designates a choice, then the second type of effect (that is, cost
effects) are reducible to the first type of effect (possibility
effects).
What Causal Mechanisms? A
second way in which we can specify the general notion of path
dependency is to describe the causal pathway by which decisions affect
future choices. On the one hand, one might use the phrase “path dependency” to refer to all causal mechanisms. On the other hand, we could reserve the phrase for a specific type of causal mechanism. For
example, Paul Pierson has suggested that the notion of path dependency
should be limited to what he calls “positive feedback.” Positive
feedback (or self-reinforcement) involves the idea that as time
progresses, the relative benefit of maintaining some feature of the
system (and hence the relatively costliness of modifying or eliminating
that feature) increases. Once a constitution has been adopted and gone into effect, it becomes more costly to adopt a different constitution. Once
a federal system has been created out of sovereign subunits, it becomes
more costly to eliminate that the federal (or national) government. Once a judicial precedent has been established and relied upon, the costs of reversal grow.
Remediable and Nonremediable Path Dependency A
third way in which we can specify the idea of path dependency is by
differentiating between “remediable” and “nonremediable” path
dependency. Path
dependency is remediable if there are some points on the path at which
there is an alternative decision, d′, such that if the decision had
been d′ rather than d, the outcome would have been better (relative to
some goal or criteria for evaluation). Path dependency is nonremediable if no alternative could have improved the outcome. For
the idea of nonremediable path dependency to be plausible, we must
assume that we are talking about particular choices in relationship to
particular consequences within some time frame. Thus,
the framers’ decision to create equal suffrage in the Senate might be
nonremediable with respect to the goal of establishing majoritarian
democracy if all of the alternatives (say, vetoes of national
legislation by a single state governor) had been worse with respect to
this goal.
Applications in Normative Legal Theory
Path dependency interacts with legal theory in a variety of ways. One simple example–stare decisis–is described by Oona Hathaway:
Path
dependence theory is relevant to the common law system for a simple
reason: the doctrine of stare decisis. Under the doctrine of stare
decisis et non quieta movere–"let the decision stand and do not
disturb things which have been settled" [FN88]–decisions of higher
courts are controlling in subsequent cases involving similar
circumstances. [FN89] Courts also give their own prior decisions great
weight, though they are not strictly bound to follow their own
precedents. [FN90] Furthermore, even when decisions of other *623
courts are not explicitly binding, they can provide persuasive
authority. [FN91] Judges who follow the doctrine thus generally apply
decision rules that entail explicit reliance on earlier choices and
thereby generate path dependence.Another
example is provided by a recent article by Lucian Arye Bebchuk and Mark
J. Roe. They argue that initial decisions made about the form of
corporate organization create path dependencies–making changes in form
more costly or infeasible. And a final example is provided by Article
V of the United States Constitution. Article V makes amendment
difficulty by subjecting amends to a supermajoritarian process of
proposal and ratification. Once the Constitution of 1789 had been
adopted and gained legitimacy, "path dependency" made substantial
changes without supermajority support infeasible.
Conclusion
The idea of path dependency is now a familiar one to many
legal theorists, but its use in academic legal discourse is frequently
vague or ambiguous. I hope this brief introduction will give you a
more precise sense of
Online Resources
Lawrence B. Solum, Constitutional Possibilities.
Bibliography
Paul Pierson, Increasing Returns, Path Dependence, and the Study of Politics, 94 American Political Science Review 251 (2000)
Paul Pierson, Politics in Time: History, Institutions, and Social Analysis (Princeton University Press 2004)
William H. Sewell, Three Temporalities: Towards an Eventful Sociology, The Historic Turn in the Human Sciences 262-63 (Ann Arbor, University of Michigan Press 1996)
S.J. Liebowitz & Stephen E. Margolis, PATH DEPENDENCE, LOCK-IN, AND HISTORY, 11 J.L. Econ. & Org. 205 (1995)
Oona A. Hathaway, PATH DEPENDENCE IN THE LAW: THE COURSE AND PATTERN
OF LEGAL CHANGE IN A COMMON LAW SYSTEM, 86 Iowa L. Rev. 601 (2001)Lucian Arye Bebchuk & Mark J. Roe, A THEORY OF PATH DEPENDENCE
IN CORPORATE OWNERSHIP AND GOVERNANCE, 52 Stan. L. Rev. 127 (1999)
(This entry was last revised on February 1, 2009.)
Source: Lawrence Solum
