• DOI:10.1086/468174
• Corpus ID: 153426324

Inefficient Dissolutions as a Consequence of Public Goods: The Case of No-Fault Divorce

@article{Zelder1993InefficientDA,
  title={Inefficient Dissolutions as a Consequence of Public Goods: The Case of No-Fault Divorce},
  author={Martin Zelder},
  journal={The Journal of Legal Studies},
  year={1993},
  volume={22},
  pages={503 - 520}
}

• Martin Zelder
• Published 1 June 1993
• Economics
• The Journal of Legal Studies

WHEN the Ukraine and other republics effectively seceded from the USSR in 1991, no one questioned whether that secession was socially desirable. After all, this transaction occurred because Russia could not induce the Ukraine to remain within the union. From the perspective of rational social choice, such a secession does not occur unless it is expected to make society better off.' That is, the Ukraine exercised its right to secede because its expected gain exceeded Russia's expected loss from the Ukraine's departure. While a matter of great political significance, the secession was the type of event perceived by economists as inherently economically efficient. This view may well be false, however. This article presents a novel explanation of why certain dissolutions observed in society, from secession to the disintegration of firms to the division of national park land to divorce, may be against society's best interests. Indeed, this article develops a general model of dissolutions which shows that many unilateral