The Law and Economics of Judicial Systems
The economic analysis of law is an indispensable conceptual tool for designing and reforming legal systems. It does not necessarily deal with markets, prices, and what are conventionally thought to be economic concepts. Rather, it is an approach to...
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| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1999/07/828298/law-economics-judicial-systems http://hdl.handle.net/10986/11469 |
| Summary: | The economic analysis of law is an
indispensable conceptual tool for designing and reforming
legal systems. It does not necessarily deal with markets,
prices, and what are conventionally thought to be economic
concepts. Rather, it is an approach to analyzing the law and
legal institutions that focuses on systematic, empirical
analyses of the incentives and effects created by
alternative legal constraints. The economic analysis of law
can also be a valuable tool in considering alternative
models for reforming legal institutions. Three broad
principles of reform are suggested by this approach:
reducing the scope of the law, simplifying the law, and
using incentives to alter access to the legal system.
Reformers and social planners should always consider the
possibility of reducing the scope of the law. Reducing the
demand for legal services can free much human talent for
other things--the practice of medicine, the construction of
roads, and so on. Since legal rules can become very
complicated, simplifying them may save scarce resources. One
way to drastically reduce the amount of litigation is to use
predetermined schedules or tables to calculate the damages
that accident victims can collect rather than making the
amount a subject for legal adjudication. Lastly, there are
important externalities to the use of legal services, and
policymakers should not allow private actors alone to
determine when they want to bring suits. |
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