The economic analysis of law evaluates legal issues through an economic lens, examining how laws promote efficiency and shape social structures. It can determine whether laws work as intended and is used in both civil and criminal law. Some law schools and research institutes provide training in this area.
The economic analysis of law uses economic principles to evaluate legal issues. Professionals in the fields of law and economics believe that the significant intersections between these areas of study can be leveraged to view law through an economic lens. Laws inherently promote some form of efficiency, including economic efficiency. Many of the formulas and concepts developed for examining markets can also be used in legal discussions.
Legal scholars in the 1700s began to look at law from an economic perspective, and a number of studies on this topic were published in the 20th century. In the economic analysis of law, researchers examine how society responds to the law and how laws shape social structures. For example, many nations have liability laws that have a proven economic impact. Companies try to avoid behavior that could create liability, as they may face a lawsuit and damages.
Both civil and criminal law can be subjected to economic analysis. While the economic impacts of civil law are often easily identifiable, criminal law can also play into the economic equations. For example, game theory can be used to examine how and why people commit crimes and what role the law plays in criminal activity or abstention decisions. A thief may decide, for example, that a crime is not worth it in a region with severe penalties for theft.
Another part of the economics analysis of law can determine whether laws work and whether they work as intended. Sometimes laws create unexpected consequences that may not be desirable. This could range from a pollution law that causes many businesses to shut down rather than adjust their businesses to a harsh criminal law that ends up unexpectedly increasing the prisoner population. Economic analysis of law can be useful in these contexts, as it allows scholars to apply formulas to the data they evaluate in order to generate objective overviews.
Some law schools and legal research institutes provide training in the economic analysis of law and may publish peer reviewed journals and participate in scholarships on this topic. It is occasionally a topic of debate, as some researchers have very different theories on how to use economics in law and how to analyze law appropriately and effectively. This research is also used in government agencies, where regulators may want to consider the potential impact of proposed rules and regulations to determine whether they should go ahead with planned activities.
Protect your devices with Threat Protection by NordVPN
