An economic assessment of same-sex marriage laws.

• Author: Allen, Douglas W.

This Article argues that marriage is an economically efficient institution, designed and evolved to regulate incentive problems that arise between a man and a woman over the life cycle of procreation. As such, its social and legal characteristics will provide a poor match for the incentive problems that arise in the two distinctly different relationships of gay and lesbian couples. Forcing all three relationships to be covered by the same law will lead to a sub-optimal law for all three types of marriage.

1. INTRODUCTION

   "Marriage" is a word familiar to toddlers, and yet so complicated that most adults cannot articulate its real meaning. (1) Marriage is an institution. (2) It is a complex set of personal values, social norms, religious customs, and legal constraints that regulate a particular intimate human relation over a life span. (3) Families are organized around marriage, and marriage provides benefits to families in terms of survival and success. The source of these benefits springs from the incentives created by the rich fabric of characteristics laced throughout the formal and informal marital rules. Social norms on personal sacrifice within the context of marriage encourage husbands and wives to devote their lives and resources to each other and their children. Signaling, self-binding commitments, and third-party sanctions (to name a few) are part of the marriage incentives that encourage socially good behavior and punish socially bad behavior, which incentives are necessary because both husbands and wives often have private incentives at odds with the interests of the community and other family members.

   Marriage has never been a static, monolithic institution. Over time, the roles of men and women within marriage have changed. Social views on multiple wives, interracial relations, and divorce have changed. Legal rules regulating everything from the treatment of children and division of property to the grounds for divorce have changed. Yet certain elements of the institution of marriage have remained relatively constant for centuries. (4) For instance, marriage has always entailed more than a mere "contract." Marriage involves not just a couple, but extended family members, non-blood relations, and impersonal third parties like the church, state, or tribe. Marriage has always required an intention for a life-long commitment. Marriage has always contained the expectation of fertility. Marriage has always been prohibited between siblings. Of course, until very recently, marriage was available only to heterosexual couples. (5) This Article argues that the best explanation for the evolution of some marriage characteristics while others do not change is that marriage is an institution uniquely equipped to handle incentive problems between a man and a woman over their full life cycle. (6)

   To some people, the idea of same-sex marriage is a fundamental departure from other marital changes, while for others, it is a natural extension of changes begun long ago. Thus, where same-sex marriage begins is a matter of debate. Some proponents go back to the Old Testament relationship of David and Jonathan. Others start with the Enlightenment concept of freedom of choice in spouse, and the radical idea of the pursuit of happiness in marriage. (7) Still others start with legal changes. Holland, followed by Belgium and Canada, became the first modern nation to legalize same-sex marriages at the turn of this century. (8) Other jurisdictions (including, for example, Scandinavian countries, Vermont, and California) have developed various types of registered civil unions that recognize and give partial marital rights to same-sex couples, and these often occurred before the current court decisions and legislation on same-sex marriage. (9)

   The ultimate political fate of same-sex marriage, what form it takes, and how it relates to traditional marriage are still undetermined issues. An enormous debate continues over the issue of same-sex marriage, even in countries where the basic premise has been accepted, like Canada, where the government passed formal legislation changing the legal definition of marriage in the summer of 2005. (10) Within this context, the pressure to change laws in the United States, where more than thirty states have passed some type of "Defense of Marriage Act," including in some cases constitutional amendments that prohibit same-sex marriage, (11) will only increase.

   This pressure makes a debate over the nature of marriage necessary. Such a debate is made difficult, however, because of legal inertia, public and academic exhaustion, and its place within a larger debate over questions of divorce, marriage regulations, and the entire existence of family law. Many argue for a return to traditional covenant-based marriage, with difficult exit and entry provisions, while others argue that the concept of marriage should either be eliminated or expanded to include virtually all combinations of human quasi-familial relationships under the general legal regulation of contract law.

   The arguments for same-sex marriage are now quite familiar. Couched in language of civil or human rights, they essentially evolve around constitutional definitions of equality, and interpretations of universal promises of civil rights for all citizens. (12) Same-sex relations are the same as heterosexual relations, the argument goes, and therefore should be regulated in the same way. In this context, "the same" usually means that both types of relationships are based on love. (13) Beyond this argument, the case is made that marriage is always changing and same-sex marriage is a natural evolution in the law. Marriage is an institution providing social benefits to loving couples and this advantageous arrangement should be extended to other loving couples. More marriage will strengthen marriage as an institution. And finally, in light of the benefits, the costs of extending the franchise of marriage should be trivial since the fraction of homosexuals in the population is small.

   The arguments against same-sex marriage are also well known. There are faith-based arguments (homosexuality is a sin and should not be promoted by the state) and slippery slope arguments (if same-sex marriage, then why not polygamy, incest, and pedophilic marriages?). (14) Some arguments build upon the premise that marriage is defined as dual-gendered, that the ability to have children defines marriage, or that children have the legal right to be raised in a traditional family. A final brand of argument tends to focus on the importance of marriage in terms of procreation, and the value marriage has in providing incentives for generating human capital in the next generation.

   What all of the arguments, both for and against, have in common is that they are unacceptable to the other side. The heated rhetoric of the debate tends to be quite remarkable, with stinging words regularly slung from both sides.

   This Article provides an economic assessment of same-sex marriage that opponents will no doubt accept, but which should also cause proponents to pause. The economic case against same-sex marriage, based on new institutional ideas, is that it is likely a bad idea for both heterosexual and homosexual couples. The argument is rooted in the contracting problems involved in procreation; however, unlike other arguments, this argument focuses on the economic role of marriage, the nature of the institutional constraints, and the interaction between legal rules and behavior. This Article argues that the institutional details of marriage are designed with specific purposes in mind, and that these purposes generally have little to do with homosexual relations. The fundamental point of this Article is that when different human relationships fall under a "one size fits all" law, the result is a bad fit for everyone. (15) Alterations to heterosexual institutions resulting from contracting problems arising in homosexual relations will have profound effects on heterosexual marriage, and heterosexual pressures on marriage law will likely be inappropriate for homosexual couples.

   The problem with having a set of laws that does not provide a good fit for the couple is the ultimate effect such laws will have on children. Marriage stability is often sensitive to changes in the law, with greater divorce rates a common outcome. The effects of divorce are often ambiguous on the husband and wife, but for children they are mostly negative. (16) Arguing that marriage is efficiently designed to have children raised by both biological parents, and that tampering with this design can lead to dire consequences, might appear as nothing more than theoretical hot air. Proponents of same-sex marriage, however, use the same arguments and marriage models employed by no-fault divorce reformers. After discussing the theoretical issues of same sex marriage, this Article briefly examines the history and effects of no-fault divorce. The purpose of this exercise is to point out that first, the same love-based view of marriage was used in the earlier debate; second, no harmful or surprising outcomes were expected; and third, the eventual reality was exactly the opposite. The no-fault divorce experience serves to discredit the theory that marriage is based on "loving relationships," but supports the theory that marriage is an institution designed around procreation. In this sense the discussion provides evidence in favor of my argument against same-sex marriage.

2. AN ECONOMIC EXPLANATION OF MARRIAGE

   1. Institutions and Efficiency

      Institutions do not come into existence ex nihilo. Institutions result from intentional actions on the part of collections of humans for the purpose of achieving some objective. How institutions are achieved, how they evolve, and what effects they have on behavior are the subject matter of the field called new institutional economics (NIE). (17) This body of economic theory has...