Rigidity and Flexibility of Constitutions in light of the Economic Theory of Incomplete Contracts

This article addresses the problem of constitutional rigidity by adopting the approach of the economic theory of incomplete contracts. A contract is incomplete when the parties are unable to foresee the future states of the world with detail enough to allow a court to verify which of them occurred in order to settle any disputes. One possible remedy is renegotiation. The constitutional incompleteness is dealt with by renegotiating and amending the original text or by new interpretations of it. A sort of trade off exists between these two ways. The less easy it is to amend the text, the more the constitutional updating takes place through a change in interpretation by the courts, that however are unable to cope with all the consequences of unforeseen contingencies. For this reason, a moderate amendments difficulty and a non-excessive procedural rigidity are preferred. The concluding remarks discuss the debate about the revision of art. 138 of the Italian Constitution in light of both the approach of incomplete contracts and some recent comparative evidence.