The economic analysis of law consists of using the judicial tools and criteria of economists to examine questions related to the field of law. It is a problem of analyzing how economic agents comprehend the legal environment in order to understand the emergence of legal rules and evaluate their appropriateness.
Economists concern with the legal object is not fundamentally new. It is already embodied in the most famous thinkers of the Scottish Enlightenment.
The legal economy is a whole analysis. The shift of economic theory to related disciplines in the non-market field occurred in the 1950s.
Economic theory illustrates this shift towards the analysis of phenomena other than favorite objects. It naturally contributed to the development of the legal economy by allowing greater consideration of historical, cultural and institutional environments.
This development is also effective in the functioning of economies. It is part of the post-war intellectual context that gives rise to reflections. On this basis, the economic analysis of law began in the 1970s under the auspices of two jurists.
The Coasian and Becker approach has been generalized to the analysis of multiple legal objects such as civil liability law, contract law or property rights.
Legal liability, in the study of law, is linked to the cost of prevention and the expectation of harm. It sets out the founding principle of minimizing the social cost of accidents. At the same time, it argues that different liability regimes should be evaluated within this framework.
Therefore, legal liability is analyzed as a preventive tool in terms of risk management. With the publication of his major work in 1972, his approach to seeing law as an incentive mechanism aimed at directing individual behavior towards efficiency was sustained.
The rule of law reflects the desired direction of optimizing economic efficiency.
Case law is highlighted as the main mechanism for developing law. Judges of Anglo-Saxon courts equate their understanding of justice with what will be fruitful. They claim that the customary law will maximize the wealth of the society.
Let's take an example: Let's look at the externalities caused by disturbances or pollution in the neighborhood. Laws have been shown by an economist to be compatible with the recommendations to be formulated.
We can liken this case law to the marginal reasoning pursued by economists. An economic point of view is easy to rationalize as long as it is close to the concept of a socially optimal level of prevention.
In this respect, the economic analysis of law acquires both a positive and a normative dimension. The first has two purposes. On the one hand, it examines how individual and collective behavior responds to incentives conveyed by rules of law.
The approach consists in using economic theory as an analytical tool to explain the emergence of these rules.
The author should aim to show how judges' decisions can be rationalized on the basis of an economic analysis of law. This is to interpret legal decisions as corporate rules that are sources of efficiency.
The normative dimension consists of advocating the idea that the pursuit of economic efficiency constitutes a legitimate target for the legal system. Therefore, this point of view is based on a critique of the doctrines and institutions underlying the system. It aims to make recommendations for reform.
It should be noted that the legal economy does not in any way claim to impose its own evaluation criteria on the discipline of law. It only aims to characterize the rationality underlying legal texts and decisions.
The issue, then, is to determine whether the rules of law create inefficiencies that justify their modification.
It goes without saying that the economic efficiency criterion alone cannot legitimize the existence of a rule or institution. However, it turns out that these recommendations have important repercussions in a wide variety of areas such as financial market regulation.