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Economic Approach to Law


Module description

Economics is the study of choice in the context of scarce resources (time, money, patience etc.). The economic approach to law traditionally uses economic principles as a tool to examine choices relating to the formation, structure and impact of law. For example, Why do we follow the law, and when are we likely to break it? Which law is likely to encourage choices which increase economic prosperity? This module will go beyond the traditional approach considering not only law, but also legal institutions and the people who staff and use them.

The aims of the module are to introduce the basic principles (maximisation, equilibrium, efficiency, consumer preferences, 'marginal' and 'opportunity' costs and benefits) and tools (functions and graphs, e.g. utility or supply functions, indifference curves) of the economic approach to law and then to apply those principles and tools to a range of issues (globalisation, corruption, pollution, access to justice, the use of contracts). The approach will be critical, seeking to identify the merits and limitations of the economic approach to law.

No previous knowledge of economics is required, and there will be a strong emphasis on making economics accessible.

Indicative module syllabus

Part 1: The Basics

  • Principles and tools of traditional law and economics
  • Efficiency, transaction costs and property law
  • Markets, market failure and regulation

Part 2: Applications

  • Legal systems and economic globalisation
  • Corruption
  • Industrial pollution
  • Outside the courts: Access to justice
  • Outside contract law: Transactional informality