Path Dependence in the Development of Private Ordering

Contrary to some idealized notions, Private Legal Systems
(PLSs) are not typically locked in Darwinian competition over the
efficiency of their norms and do not form autonomously (that is,
without reliance on preexisting institutions) upon the identification
of an efficient norm. The evolution of PLSs is primarily driven by the
PLSs’ relative enforcement costs, not by the relative efficiency of the
norm they attempt to enforce.
Because of enforcement costs, PLSs form in a path dependent
manner, beginning by enforcing a collaborative core norm—
typically one that provides religious or social identity—then
gradually expanding to enforce increasingly adversarial expansion
norms. PLSs sometimes attempt to reduce path dependence by
“inventing tradition” (creating rituals and symbols that suggest a
shared identity)—an activity that has thus far not received much
attention in the private ordering scholarship.