Legal institutions, like zoning laws, don't always lead to efficiency as traditionally thought. Social welfare economics overlooks the complexity of how laws evolve and how property rights affect efficiency. Zoning laws in the US show how institutions change in unpredictable ways, not towards a single efficient outcome. The focus on social efficiency in economics can be misleading because it ignores the initial allocation of property rights. Instead, legal and economic systems evolve through market trades and adjustments to property rights, driven by the actions of many participants.