Discretion, Institutions, and the Problem of Government Commitment
This chapter examines one prominent feature that is embodied in the idea of "getting property rights right" and is directly relevant to contemporary affairs—namely, the notion of commitment. The commitment problem is an aspect of self-management or "egonomics", of which Ulysses and the Sirens is the exemplar. But it also arises in dealings among distinct individuals or between individuals and organizations and between individuals and governments. The chapter focuses on the ways in which discretionary authorities—whether individuals, organizations, or states. In ordinary language, a commitment is a promise, pledge, vow, covenant, guarantee, or bond to perform in a specified fashion. A statutory commitment to fixed-life patents encourages investments in research and development. In the medieval world of weak governmental authority, there were nevertheless some means for making credible commitments. The credibility of the commitment implicit in a policy is damaged in direct proportion to the distance of the sun from the horizon.