Introduction to Law and Economics for Civil Law Systems

Abstract

Amongst the social sciences, it is economics that has made the most promising advances for law. There are several reasons for this: it has a well-developed theoretical framework (microeconomics); it provides currently the most advanced application of the rational choice model, which is one of the elements unifying the social sciences; it has given rise to applications in all fields of law and its scientific literature continues to grow at a rapid pace fed by new generations of scholars taking over from the founders. Two remarkable discoveries have fired the interest of lawyers in this approach. The first is that, in studying different institutions that are part of American common law in this light, researchers found that nearly all of the rules looked formulated as if the purpose was to maximise social welfare, the target value to be maximised in economic analysis. The second, related discovery is that rules formulated as if aimed at maximising social welfare, called efficient in economic parlance, often correspond to what lawyers’ intuition would consider fair or just rules. These findings are no less relevant outside the United States, in civil law systems as well as in other common law systems. Law practice asks what legal rules are applicable to a given case, how rules hang together consistently and, possibly, what rule would be desirable. Law and economics asks what are the social effects of the applicable rules, and looks for their justification and desirability in terms of those effects. In a nutshell, that is the difference between the two but also their complementarity.