Abstract

Notaries in Latin countries have historically played a major role in guaranteeing the certainty of a number of economic transactions, with particular regard to property titles transfers (both in the real estate and in the corporate realm). However, in the light of the increasing reliability of property titles as well as the diffusion of digital technologies in public registries, the rationale for a mandatory intermediation has been questioned. In particular, the «hybrid» nature of notaries, who are both public officials and private professionals with a mandatory and reserved area of business, is currently being challenged. In fact, the grant of a reserved area of business is justified by the production of a public good, i.e. legal certainty. If the scope of the reserved area is excessively extensive, an unwarranted monopolistic rent is extracted. Hence a case for the liberalization of some notarial functions. In Italy, though, instead of pursuing the liberalization, notaries have been directed by law to perform specific tasks for free (e.g. notaries cannot ask any fee to incorporate the so-called «società a responsabilità limitata semplificate», a simplified LLC). As public officials, notaries are expected to perform all their functions with the same level of commitment, including those tasks for which no payment is allowed, in order for social welfare to be maximized. At the same time, as private professionals, notaries can be expected to prioritize those operations for which a fee is paid, thereby maximizing their income. In this article, we discuss, from a theoretical perspective, the reasons for maintaining a reserved area of business for notaries, vis-à-vis the consequences of digitalization. Secondly, we report the findings of an experiment conducted in Rome, an area where a high share of Italian notaries operates (about 10 percent). In particular, through a randomized controlled trial, we compare the behavior of a sample of notaries to whom the incorporation of a simplified LLC has been requested (treatment), with a sample of notaries incorporating an ordinary LLC (control). We find a higher and statistically significant response rate in the control group; moreover only one third of the treatment group has expressed their willingness to perform this deed free of charge. On average, notaries in the treatment group asked a fee of 200 euro. Our results suggest that notaries behave more as private professionals than as public officials; besides, a majority of notaries in the treatment group did not comply with their legal obligation to perform specific tasks free of charge. Therefore our experiments suggest that requiring notaries to perform tasks for free is a sub-optimal policy with respect to a fully-fledged liberalization of the profession.