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%Brennan and Buchanan, The Power to Tax. (Cambridge: Cambridge University Press, 1980)  %Brennan and Buchanan, The Reason of Rules. (Cambridge: Cambridge University Press 1985)  %The selection of constitutional rules according to which latter allocational decision may be made.  \bigskip{}  To better understand our investigation, it is useful to frame it in terms of the theory of the second-best. The economy considered here is subject to two irremovable constraints. On the one hand, the damage is private information. On the other hand, the liability system is undermined by judgment proofness. In this framing, our purpose is