Skip to main content
SpringerLink
Log in

The economics of notaries

  • Published:
European Journal of Law and Economics Aims and scope Submit manuscript

Abstract

In civil law legal systems, notaries fulfill two crucial roles, acting as both law enforcers and court officers, and as facilitators and enforcers of private transactions. In these countries, notaries achieve economies of scope by simultaneously providing private and public services and substituting both parties' lawyers. This arrangement is subject, however, to serious conflicts of interest that could prejudice the provision of public services that have attributes of externalities, as well as the notary's independence from all parties to the transaction. This paper shows how this notary system may be efficient in this context. Focusing on Spanish notaries, it analyzes the legal and economic nature of the services, the incentives that control their provision, and the cost in terms of competitive restraints that could be generated by the organizational patterns making up such incentives. Supporting empirical evidence is also provided.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Andersen Consulting. (1993). “Analyses des coûts de la transmission immobiliére dans la CEE: Honoraires des intervenants juridiques lors de l'acquisition immobiliére.” Paris.

  • Anuario de la Dirección General de los Registros y del Notariado. (Several years). Madrid: Ministry of Justice.

  • Anuario Estadístico de Espańa. (Several years). Madrid: Instituto National de Estadística.

  • ArruñadaB. (1995). “Diseño organizativo y gestíon del personal en la sanidad pública.” In A.E.S. (ed.), Cambios en la regulacion sanitaria (pp. 64–119). Barcelona: SG Editores.

    Google Scholar 

  • ArruñadaB. (1995). Análisis ecońomico del notariado. Madrid: Consejo General del Notariado.

    Google Scholar 

  • “Auditors' Liability: If the Cap Fits.” (1994). The Economist, February 26, p. 89.

  • BakerP.G., M.C.Jensen, and K.L.Murphy. (1988). “Compensation and Incentives: Practice vs. Theory.” Journal of Finance 43(3) (July), 593–616.

    Google Scholar 

  • BeckerG.S., and G.J.Stigler. (1974). “Law Enforcement, Malfeasance, and Compensation of Enforcers.” Journal of Legal Studies 3 (January), 1–18.

    Google Scholar 

  • BhagwatiJ.N. (1982). “Directly Unproductive, Profit-Seeking (DUP) Activities.” Journal of Political Economy 90(5) (October), 988–1002.

    Google Scholar 

  • Brancós NúñezE. (1989). “El arancel notarial a diez años vista.” Gaceta de los Notarios 8 (October), 4–5.

    Google Scholar 

  • BrickleyJ.A., and F.H.Dark. (1987). “The Choice of Organization Form: The Case of Franchising.” Journal of Financial Economics 18, 401–420.

    Google Scholar 

  • BuchananJ.M., R.D.Tollison, and G.Tullock (eds.). (1980). Toward a Theory of the Rent-Seeking Society. College Station: Texas A&M Press.

    Google Scholar 

  • CarmichaelL. (1983). “Firm Specific Human Capital and Promotion Ladders.” Bell Journal of Economics and Management Science 14 (Spring), 251–258.

    Google Scholar 

  • CarrJ., and F.Mathewson. (1990). “The Economics of Law Firms: A Study in the Legal Organization of the Firm.” Journal of Law and Economics 33 (October), 307–330.

    Google Scholar 

  • CoaseR.H. (1988). “Industrial Organization: A Proposal for Research.” In The Firm, the Market and the Law (pp. 57–74). Chicago: University of Chicago Press. First published in V.R. Fuchs (ed.), Policy and Research Opportunities in Industrial Organization, Cambridge, MA: NBER, 1972.

    Google Scholar 

  • CorcoranW.J., and G.V.Karels. (1985). “Rent-Seeking Behavior in the Long-Run.” Public Choice 46, 227–246.

    Google Scholar 

  • Costa, J. (1917). “Reorganización del Notariado, del Registro de la Propiedad y de la Administración de Justicia.” Obras Completas (2nd ed.). Madrid.

  • CulyerA.J., A.Maynard, and J.Posnett (eds.). (1990). Competition in Health Care: Reforming the NHS. London: Houndmills.

    Google Scholar 

  • DemsetzH. (1968). “Why Regulate Utilities?” Journal of Law and Economics 11(55), 55–65.

    Google Scholar 

  • Díez-Picazo, L. (1993). Fundamentos de derecho civil patrimonial (4th ed.). Madrid.

  • Estadística de establecimientos sanitarios con régimen de interrado. (Several years). Madrid: Instituto Nacional de Estadística.

  • FernándezT.R., and R.Sainz Moreno. (1988). “La naturaleza de la función notarial.” Report to the Notaries' Association Council. Madrid: NAC.

    Google Scholar 

  • FisherF.M. (1985). “The Social Cost of Monopoly and Regulation: Posner Reconsidered.” Journal of Political Economy 92(2), 410–416.

    Google Scholar 

  • Friedman, M. (1970). “The Social Responsibility of Business Is to Increase Its Profits.” New York Times Magazine, September 13.

  • GalanterM., M.Ballard, and J.Esser. (1994). “The Cost of Common Legal Transactions in the United States.” Madison, WI: Institute of Legal Studies, University of Wisconsin.

    Google Scholar 

  • GilsonR.J., and R.H.Mnookin. (1985). “Sharing Among the Human Capitalists: An Economic Inquiry into the Corporate Law Firm and How Partners Split Profits.” Stanford Law Review 37, 313–392.

    Google Scholar 

  • Giménez ArnauE. (1964). Derecho notarial español (3 vols.). Pamplona: Universidad de Navarra.

    Google Scholar 

  • HigginsR.S., W.F.Shughart, and R.D.Tollison. (1985). “Free Entry and Efficient Rent Seeking.” Public Choice 46(3), 247–258.

    Google Scholar 

  • HillmanA.L., and E.Katz. (1984). “Risk-Averse Rent Seekers and the Social Cost of Monopoly Power.” Economic Journal 94(373) (March), 104–110.

    Google Scholar 

  • HillmanA.L., and D.Samet. (1987). “Dissipation of Contestable Rents by Small Numbers of Contenders.” Public Choice 54(1), 63–82.

    Google Scholar 

  • HutchensR. (1987). “A Test of Lazear's Theory of Delayed Payment Contracts.” Journal of Labor Economics 5 (October), 153–170.

    Google Scholar 

  • JensenM.C. (1983). “Organization Theory and Methodology.” Accounting Review 50(2) (April), 319–339.

    Google Scholar 

  • JensenM.C. (1993). “The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems.” Journal of Finance 48(3) (July), 831–880.

    Google Scholar 

  • JensenM.C., and W.H.Meckling. (1976). “Theory of Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics 3(4), 305–360.

    Google Scholar 

  • JensenM.C., and MecklingW.H. (1992). “Specific and General Knowledge, and Organizational Structure.” In L.Werin and H.Wijkandere (eds.), Contract Economics (pp. 251–274). Cambridge, MA: Blackwell. Revised version: (1995) Journal of Applied Corporate Finance 8(2) (Summer), 4–18.

    Google Scholar 

  • KaplanR.S. (1982). Advanced Management Accounting. Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • KatzE., and J.Rosenberg. (1989). “Rent-Seeking for Budgetary Allocation: Preliminary Results for Twenty Countries.” Public Choice 60(2) (February), 133–144.

    Google Scholar 

  • KleinB., R.G.Crawford, and A.A.Alchian. (1978). “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process.” Journal of Law and Economics 21(2) (October), 297–326.

    Google Scholar 

  • KleinB., and K.Leffler. (1981). “The Role of Market Forces in Assuring Contractual Performance.” Journal of Political Economic 89 (August), 615–641.

    Google Scholar 

  • KraakmanR.H. (1986). “Gatekeepers The Anatomy of a Third-Party Enforcement Strategy.” Journal of Law, Economics and Organization 2, 53–105.

    Google Scholar 

  • KruegerA.O. (1974). “The Political Economy of the Rent-Seeking Society.” American Economic Review 64 (June), 291–303.

    Google Scholar 

  • KruegerA.B. (1991). “Ownership, Agency and Wages: An Examination of Franchising in the Fast Food Industry.” Quarterly Journal of Economics 106, 75–101.

    Google Scholar 

  • LazearE.P. (1979). “Why Is There Mandatory Retirement?” Journal of Political Economics 87 (December), 1261–1284.

    Google Scholar 

  • LeutheusserH. (1993). “Anwaltsnotariat oder Nurnotariat.” Zeitschrift für Rechtspolitik 6, 231–232.

    Google Scholar 

  • LeibensteinH. (1966). “Allocative Efficiency vs. ‘X-Efficiency’.” American Economic Review 56(3) (June), 392–415.

    Google Scholar 

  • Mathews, R.C.O. (1991). “The Economics of Professional Ethics: Should the Professions Be More Like Business?” Economic Journal (July), 737–750.

  • Mezquita del CachoJ.L. (1989). Seguridad jurídica y sistema cautelar (2 vols.). Barcelona: Bosch.

    Google Scholar 

  • MilgromP.R. (1988). “Employment Contracts, Influence Activities and Efficient Organization Design.” Journal of Political Economy 96(1), 42–60.

    Google Scholar 

  • MilgromP.R., and J.Roberts. (1988). “An Economic Approach to Influence Activities in Organizations.” American Journal of Sociology 94 (Supp.), S1154-S179.

    Google Scholar 

  • MilgromP.R., and J.Roberts. (1990). “Bargaining and Influence Costs and the Organization of Economic Activity.” In J.Alt and K.Shepsle (eds.), Perspectives on Positive Political Economy (pp. 57–89), Cambridge, MA: Cambridge University Press.

    Google Scholar 

  • MilgromP.R., and J.Roberts. (1992). Economics, Organization and Management. Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • MixonF.G.Jr., D.N.Laband, and R.B.EkelundJr. (1994). “Rent-Seeking and Hidden In-Kind Resource Distortion: Some Empirical Evidence.” Public Choice 78(2) (February), 171–185.

    Google Scholar 

  • MuellerD.C. (1989). Public Choice II: A Revised Edition. Cambridge: Cambridge University Press.

    Google Scholar 

  • Notaries' Association Council. (1985). Simposio Notarial 83. Madrid: Consejo General del Notariado.

    Google Scholar 

  • Notaries' Association Council. (1992). “Informe sobre el Arancel Notarial.” Mimeo, Madrid: Consejo General del Notariado, January 24.

    Google Scholar 

  • Notaries' Association Council. (1993). “Informe sobre la incidencia práctica del Arancel en la retribución de los servicios notariales entre 1990 y 1992.” Madrid: Consejo General del Notariado, April.

    Google Scholar 

  • Notaries' Association Council. (1995). “La opinión pública sobre el Notariado: Séptimo barómetro de opinión.” Madrid: NAC, October.

    Google Scholar 

  • Notaries' Regulations (Decree of June 2, 1994, as amended by Royal Decrees 1126/1982 of May 28 and 1209/1984 of June 8), in Derecho Notarial: Legislación y jurisprudencia (1994) Madrid: Colegios Notariales de España.

  • OECD. (1990). Flexible Personnel Management in the Public Service. Paris: Public Management Studies.

    Google Scholar 

  • OECD. (1993). Pay Flexibility in the Public Service. Paris: Public Management Studies.

    Google Scholar 

  • “Partners in Pain.” (1994). The Economist, July 9, pp. 63–64.

  • Pastor PrietoS. (1993). ÍAh de la justicia! Política judicial y economía. Madrid: Cívitas.

    Google Scholar 

  • Pastor PrietoS. (1994). “Intervención notarial y litigiosidad civil.” Mimeo. Universidad Carlos III, Madrid.

    Google Scholar 

  • Paz-AresC. (1994). “Seguridad juridica y sistema notarial (Una aproximación económica).” In M. Rodríguez-Piñero, A. Schwachtgen, R. Everling, C. Paz-Ares, L. Parejo, L. Díez-Picazo, and J. Burdiel. (1994). La fe pública. Madrid: Consejo General del Notariado.

    Google Scholar 

  • PosnerR.A. (1972). “The Appropriate Scope of Regulation in the Cable Television Industry.” Bell Journal of Economics 3, 98–129.

    Google Scholar 

  • PosnerR.A. (1975). “The Social Costs of Monopoly and Regulation.” Journal of Political Economy 83(4) (August), 807–827.

    Google Scholar 

  • Posner, R.A. (1995a). “The Future of the Law and Economics Movement in Europe.” Paper presented at the Twelfth Annual Conference of the European Association of Law and Economics, Bern, September 7.

  • PosnerR.A. (1995b). “What Do Judges Maximize?” In Overcoming Law (pp. 109–144). Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Rodríguez Adrados, A. (1980). “El Notariado: función privada y función pública. Su inescindibilidad.” Revista de Derecho Notarial 255–409.

  • RogersonW.P. (1982). “The Social Costs of Monopoly and Regulation: A Game-Theoretic Analysis.” Bell Journal of Economics 13(2) (Autumn), 391–401.

    Google Scholar 

  • RohdeG. (1991). “Plädoyer für das freie Anwaltsnotariat.” Zeitschrift für Rechtspolitik 12, 452–454.

    Google Scholar 

  • SchelterC. (1992). “Plädoyer für das freie Nurnotariat.” Zeitschrift für Rechtspolitik 8, 311–312.

    Google Scholar 

  • ShapiroC. (1983). “Premiums for High Quality Products as Returns to Reputations.” Quarterly Journal of Economics 98 (November), 659–679.

    Google Scholar 

  • ShapiroC., and J.E.Stiglitz. (1984). “Equilibrium Unemployment as a Worker Discipline Device.” American Economic Review 74 (June), 433–444.

    Google Scholar 

  • SmithA. (1981/1776). An Inquiry into the Nature and Causes of the Wealth of Nations. Indianapolis: Oxford University Press/Liberty Press.

    Google Scholar 

  • SpenceA.M. (1973). Market Signalling: Information Transfer in Hiring and Related Processes. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • StiglerG.J. (1968). The Organization of Industry. Homewood, IL: Irwin.

    Google Scholar 

  • Sturner, R. (1976). “Der Notar-unabhängiges Organ der Rechtspflege?” Juristen Zeitung 156–160.

  • TiroleJ. (1986). “Hierarchies and Bureaucracies: On the Role of Collusion in Organizations.” Journal of Law, Economics and Organization 2, 181–214.

    Google Scholar 

  • TullockG. (1967). “The Welfare Costs of Tariffs, Monopolies and Theft.” Western Economic Journal 3 (June), 224–232.

    Google Scholar 

  • TullockG. (1980). “Efficient Rent-Seeking.” In J.M.Buchanan, R.D.Tollison, and G.Tullock (eds.), Toward a Theory of the Rent-Seeking Society (pp. 97–112). College Station: Texas A&M Press.

    Google Scholar 

  • WilliamsonO.E. (1964). The Economics of Discretionary Behavior: Managerial Objectives in a Theory of the Firm. Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • WilliamsonO.E. (1975). Markets and Hierarchies: Analysis and Antitrust Implications. New York: Free Press.

    Google Scholar 

  • WilliamsonO.E. (1976). “Franchise Bidding for Natural Monopoly: In General and with Respect to CATV.” Bell Journal of Economics 7, 73–107. Revised and reprinted in The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (1985, pp. 326–364). New York: Free Press.

    Google Scholar 

  • WilliamsonO.E. (1979). “Transaction-Cost Economics: The Governance of Contractual Relations.” Journal of Law and Economics 22, 233–261.

    Google Scholar 

  • WilliamsonO.E. (1983). “Credible Commitments: Using Hostages to Support Exchange.” American Economic Review 73, 519–554.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Pompeu Fabra University, 08008, Barcelona, Spain

    Benito Arruñada

Authors
  1. Benito Arruñada
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Arruñada, B. The economics of notaries. Eur J Law Econ 3, 5–37 (1996). https://doi.org/10.1007/BF00149081

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF00149081

Keywords

Search

Navigation