There exists a distinction between ‘law and economics’ and the ‘economic analysis of law’. The former, corresponding to Coase’s approach, consists in taking legal rules into account insofar as they influence economic activities. The latter, associated to Posner’s name, consists in using economics to analyze legal problems. Methodologically speaking, if one admits that the economic analysis of law consists in using economic tools to analyze legal problems, Calabresi’s own work must be classified as such. However, Calabresi has always insisted that his own approach differs from Posner’s economic analysis of law. In this paper, we take the opportunity of Calabresi’s new book—The Future of Law and Economics—to revisit Calabresi’s approach to law and economics. In his book, Calabresi explains that the economic analysis of law is unsatisfactory because economics is too narrow. He insists on the need to amplify economic analysis by: first, adopting a more realistic approach à la Coase; second, taking merit goods into account; and third, including individuals’ propensity to be altruistic. We analyze these three aspects and show that it leads to a certain ambiguity in terms of the distinction between ‘law and economics’ and the ‘economic analysis of law’.
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From this perspective, his definition of what a lawyer-economist is differs from the one given by Backhaus (2017).
On Coase, the lighthouse and market failure, see Candela and Geloso (2018).
It is worth noting that this has also been the critique to the blind support for property rights that has occurred almost everywhere in last decades and especially in the case of intellectual property rights.
For an overview on merit goods see Kirchgässner (2017).
This is also a problem Buchanan encountered and discussed. To him, a legal structure is the consequence, the product, of the attempts made by the individuals to solve their problems. The law is, in Buchanan's views, the consequence or the outcome of the collective actions undertaken in the past by the individuals to deal with the interdependencies, externalities that could not be internalized on markets. They can be viewed as the product of a unanimous agreement.
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Marciano, A., Battista Ramello, G. Law, economics and Calabresi on the future of law and economics. Eur J Law Econ 48, 65–76 (2019). https://doi.org/10.1007/s10657-019-09619-4
- Economic analysis of law
- Law and economics
- Merit goods
- Political economy