Economic Analysis of Law

This entry for the forthcoming The New Palgrave Dictionary of Economics (Second Edition) surveys the economic analysis of five primary fields of law: property law; liability for accidents; contract law; litigation; and public enforcement and criminal law. It also briefly considers some criticisms of the economic analysis of law.law and economics, property law, liability for accidents, contract law, litigation, public enforcement, criminal law

An economic analysis of constitutional law

Perhaps, the 1990''''s will be the decade of constitution writing. With many European States gaining their independence or reshaping their contours, new constitutions will be drawn up. Recent advances in the economic analysis of law can help to make this difficult task more feasible. This essay starts by giving an introduction into the economic analysis of constitutional law. Part I contains an analysis of constitutional guarantees of basic (individual) rights and procedures, illustrated with three constitutions, the American constitution of 1789 as amended in 1792, the German Basic Law of 1949 and the Dutch Basic Law of 1983. Although constitutions are meant to be permanent, they continuously change without amendment. Part II offers an analysis of constitutional change without amendment. Whoever wants to draft a constitution needs to know how the basic guarantees work, how procedural rules interconnect basic guarantees and decision takers, and what chances there are that the meaning of a constitutional provision can be turned upside down. Economic analysis of constitutions speaks to these three problems.public economics ;

Two Economists, Three Opinions? Economic Models for Private International Law - Cross Border Torts as Example

Many agree that private international law does a poor job of leading to good and predictable results. Can law and economics bring more scientific, objective foundations to the discipline? Economics, one may hope, can bring the conclusiveness to the field that doctrine could not. But even a fleeting review of existing studies reveals a discrepancy of views or economic approaches that mirrors the discrepancy in the traditional private international law doctrine. This article sets out to test whether different models lead to different outcomes. It makes arguments in three economic models - a private law model, an international law model, and a model combining the two. The subject area for this analysis is private international law of torts, more specifically the question of the law applicable to cross-border torts. The result is that the debate whether private international law is private law or (public) international law is replicated in the economic analysis of private international law. Rather than resolve problems of private international law, economic analysis reformulates them. This does not make economic analysis useless at all, but it puts into question its promise of objective neutral solutions

Economic Man and Literary Woman: One Contrast

The law and literature movement has been with us long enough that it is now possible to speak seriously of a literary analysis of law, just as it has become possible, and even standard, to speak of an economic analysis of law. It is also standard, of course, to speak of that abstract character who has emerged from the economic analysis of law: economic man. In these brief comments, I want to offer one contrast of the economic man that emerges from economic legal analysis with the literary person that is beginning to emerge from literary legal analysis. I will sometimes call the latter person, in the interest of rough justice and somewhat in the interest of accuracy, literary woman. The literary woman posited by literary legal theorists is coming into her own, and she is at least beginning to operate as a check on the excesses of economic man run wild. I should add by way of caveat that these comments are intended to be programmatic and tentative. I am not suggesting, and do not believe, that the comparative vision of literary woman that contrasts with economic man and which I will describe in this essay is the only, or even the most, representative vision of humanity and human nature that has emerged from the law and literature movement. I do think, though, that it is a vision we ought to pursue. The idealized literary person, sometimes explicit, but most often implicit in much of our literary legal analysis, stands in sharp contrast to her closest interdisciplinary cousin, economic man. For that reason alone, the vision of human nature she represents has tremendous moral promise. We ought to begin to make good on it

The Environmental Enforcement in the Civil and the Common Law Systems. A Case on the Economic Effects of Legal Institutions

This paper aims to give a comparative analysis on the different enforcement approaches in respect to both civil and common law systems (i.e. Europe vs. USA) by analyzing some crucial aspects of their underlying normative systems. Therefore, the role of the juridical institutions in these two diverse contexts is analyzed, in order to identify the economic efficiency implications based upon the theory of public enforcement of environmental laws.environmental enforcement, economic analysis of law, common law, civil law.

New Economic Analysis of Law: Beyond Technocracy and Market Design

This special issue on New Economic Analysis of Law features illuminating syntheses of social science and law. What would law and economics look like if macroeconomics were a concern of scholars now focused entirely on microeconomics? Do emerging online phenomena, such as algorithmic pricing and platform capitalism, promise to perfect economic theories of market equilibrium, or challenge their foundations? How did simplified economic models gain ideological power in policy circles, and how can they be improved or replaced? This issue highlights scholars whose work has made the legal academy more than an “importer” of ideas from other disciplines—and who have, instead, shown that rigorous legal analysis is fundamental to understanding economic affairs.The essays in this issue should help ensure that policymakers’ turn to new economic thinking promotes inclusive prosperity. Listokin, Bayern, and Kwak have identified major aporias in popular applications of law and economics methods. Ranchordás, Stucke, and Ezrachi have demonstrated that technological fixes, ranging from digital ranking and rating systems to artificial intelligence-driven personal assistants, are unlikely to improve matters unless they are wisely regulated. McCluskey and Rahman offer a blueprint for democratic regulation, which shapes the economy in productive ways and alleviates structural inequalities. Taken as a whole, this issue of Critical Analysis of Law shows that legal thinkers are not merely importers of ideas and models from economics, but also active participants, with a great deal to contribute to social science research

International Migration as Absolute Natural Law: An Inquiry into International Migration from the Perspective of Legal Philosophy

This paper investigates to what extent international migration law is coherent with the concept of migration as a natural human right. Based on the assumption that migration is an inherently human behavior, beneficial to humankind, and therefore natural law, an analysis of the most prominent sources of international migration law is undertaken. The result of the analysis shows that modern international migration law is largely in line with the concept of natural law, and that the criminalization of migration happens on the domestic level, where economic and populist motivations inform policy makers and shape the law

Economic Analysis of Welfare Economics, Morality and the Law

This paper contains the chapters on welfare economics, morality, and the law from a general, forthcoming book, Foundations of Economic Analysis of Law (Harvard University Press, 2003). I begin in chapter 26 with a discussion of the normative foundations of economic analysis, namely, the subject of welfare economics. I also describe notions of morality and fairness, which play an important, if dominant, role in much normative discourse about law, and I discuss the connections between welfare economics and morality. A theme of this discussion is that notions of morality have functional aspects, and that, for a complex of reasons, they also take on importance in their own right to individuals. Then in chapter 27, I consider the observed relationship between law and morality, and comment on what might be thought to be the optimal relationship between law and morality. In chapter 28, I discuss issues concerning income distributional equity and the law, including the question of whether the distributional effects of legal rules should influence their selection. The answer to this question will be a qualified no, given that society has an income tax system that can serve to redistribute income or to correct problems with distribution that arise due to the effects of legal rules.

ECONOMIC ANALYSIS OF LAW AND ECONOMICS

The academic world is wonderful. Like few other professionals, we can choose what we want to do and what questions we think are important, which in our line of work means choosing what topics we want to research. But what influences our choices? This paper examines what drives scholars to select Law and Economics (L&E) as a topic for research. It does so by implementing the methodology of many L&E papers - by assuming that regulation and incentives matter. Legal scholars face very different academic incentives in different parts of the world. In some countries, the academic standards for appointment, promotion and tenure encourage legal scholars to concentrate on L&E. In others, they strongly discourage such research. Thus, we should expect wide variation in the rate of participation of legal scholars in the L&E discourse across countries. On the other hand, economists are evaluated with similar yardsticks everywhere. Thus, participation of economists in the L&E discourse is likely to vary much less from one place to another. The hypothesis of this paper is that the academic incentives are a major factor in the level of participation in the L&E scholarship. This "incentives hypothesis" is presented and then examined empirically on data gathered from the list of authors in L&E journals and the list of participants in L&E conferences. The data generally supports the hypothesis. In the legal academia, the incentives to focus research on L&E topics are the strongest in Israel, they are weaker in North America and weakest in Europe. In fact, the data reveal that lawyers' authorship of L&E papers weighted by population is almost ten times higher in Israel than in North America; while in Europe it is almost ten times lower than in North America. By comparison, the weighted participation level of economists - who face relatively similar academic environments across countries - in L&E research is not significantly different across countries.Law and Economics, Legal Education, Comparative Law,

Surrogacy from the Perspectives of Economic and Civil Liberties

The field of law and economics, of which Judge Posner is the leading theorist, has offered a rich and sophisticated framework for thinking about a wide variety of problems at the interface of law and society. The theory, based on economic principles for understanding behavioral incentives and disincentives, is widely taught in law schools and is influential in scholarship. I have not always agreed with the application of the theory to complex problems of individual and group behavior, yet I constantly have been impressed with the elegance of the writing and analysis. Judge Posner thinks about surrogacy arrangements in terms of economic liberty: The parties are in relatively free and equal bargaining positions, the arrangements are mutually beneficial, and third parties (notably the children) are not harmed. My article is written from the perspective of civil liberties rather than economic liberties. Do the two perspectives-economic and civil liberties-lead to similar policy results