What Are Legal Economics?
Law and economics, or “economic analysis of the law,” is the application of economic principles to analyze the effects of various laws on the individual and society at large. In other words, economic concepts (like scarcity of resources, supply, demand, market efficiency, and bargaining power) are used to explain the purpose and effects of various laws, to assess which legal rules are economically efficient, and to predict which legal concepts will be effective and which will not.
As early as the 18th century, Adam Smith (writer of “Wealth of Nations” and famous for coining the phrase “life, liberty, and property”) discussed the economic effects of mercantile laws. Many other political philosophers also saw an interplay between economics and law and wrote about it at great length, including the father of communism, Karl Marx. However, the idea of applying economic concepts directly to the analysis of laws in a non-market manner is a fairly new concept. Economic analysis of law is usually divided into positive and normative. Positive analysis of law uses economic analysis to predict the effects of various legal rules, often explaining the development of laws in terms of their economic efficiency. Normative law, on the other hand, goes further and actually makes policy recommendations based on the projected economic consequences of different legal approaches.
In the United States, the economic analysis of law has been had significant influence on policy makers and the legal system. Many well known judicial opinions have utilized various forms of economic analysis to express the basis for a decision. Some have criticized this approach, however, due to the fact that it may overlook the needs of the minority or individual, such as in questions of equal protection and human rights.
A number of interesting new forms of economic legal analysis are evolving everyday. For more information on economics and law, please refer to the resources below. Should you require the assistance of competent legal counsel in your area, visit our Law Firms page.
Economics Law - US
- Bureau of Economic Analysis
The Bureau of Economic Analysis (BEA) promotes a better understanding of the U.S. economy by providing the most timely, relevant, and accurate economic accounts data in an objective and cost-effective manner.
- Economic Development Administration
The Economic Development Administration (EDA) was established under the Public Works and Economic Development Act of 1965 (42 U.S.C. § 3121), as amended, to generate jobs, help retain existing jobs, and stimulate industrial and commercial growth in economically distressed areas of the United States. EDA assistance is available to rural and urban areas of the Nation experiencing high unemployment, low income, or other severe economic distress.
- Economic Research Service - US Department of Agriculture
The Economic Research Service is a primary source of economic information and research in the U.S. Department of Agriculture. With over 350 employees, ERS conducts a research program to inform public and private decisionmaking on economic and policy issues involving food, farming, natural resources, and rural development.
- Economics - Definition
Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business, finance and government, but also in crime, education, the family, health, law, politics, religion, social institutions, war, and science. The expanding domain of economics in the social sciences has been described as economic imperialism.
- Financial Stability
Today, our nation faces a severe financial crisis. It is a crisis of confidence, of capital, of credit and of consumer and business demand. Rather than providing the credit that allows new ideas to flourish into new jobs, or families to afford homes and autos, we have seen banks and other sources of credit freeze up – contributing to and potentially accelerating what already threatens to be a serious recession. Our Financial Stability Plan will help ensure that businesses with good ideas have the credit to grow and expand, and working families can get the affordable loans they need to meet their economic needs and power an economic recovery.
- National Bureau of Economic Research
Founded in 1920, the National Bureau of Economic Research is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.
- US Department of Commerce
The U.S. Department of Commerce has a broad mandate to advance economic growth and jobs and opportunities for the American people. It has cross cutting responsibilities in the areas of trade, technology, entrepreneurship, economic development, environmental stewardship and statistical research and analysis. The products and services the department provides touch the lives of Americans and American companies in many ways, including weather forecasts, the decennial census, and patent and trademark protection for inventors and businesses.
- US Economic Stimulus Plan - Council on Foreign Relations (CFR)
President Barack Obama took office in January 2009 facing the biggest global economic crisis since the Second World War. Obama and U.S. congressional leaders, mainly from the Democratic Party, crafted an economic stimulus package to confront the crisis.
- US Economy at a Glance
The Bureau of Labor Statistics (BLS) produces Economy at a Glance pages at the national, regional, state, and metropolitan area levels. The data displayed in these pages are assembled from different surveys and programs conducted by BLS. The Economy at a Glance pages are refreshed with current data every time any of the source programs releases new statistics. This typically occurs 7-9 times per month.
Economics Law - International
- Economic Commission for Africa (ECA)
The Economic Commission for Africa (ECA) was established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN's five regional commissions. ECA's mandate is to promote the economic and social development of its member States, foster intra-regional integration, and promote international cooperation for Africa's development.
- European Commission - Economic and Financial Affairs
The Directorate-General for Economic and Financial Affairs (DG ECFIN) reports to the Commissioner for Economic and Monetary Affairs, Joaquín Almunia. It strives to improve the economic wellbeing of the citizens of the European Union, by developing and promoting policies that lead to sustainable economic growth, a high level of employment, stable public finances and financial stability.
- UK Economy at a Glance
his information sheet summarises key aspects of the UK economy. The factors covered are: * Overview of the UK economy * Economic growth * Exchange rates * Interest rates * Inflation * Foreign direct investment * Trade * Taxation * Major UK-owned companies * Labour environment.
- UN Economic and Social Commission for Western Asia (ESCWA)
ESCWA provides a framework for the formulation and harmonization of sectoral policies for member countries, a platform for congress and coordination, a home for expertise and knowledge, and an information observatory. ESCWA activities are coordinated with the divisions and main offices of the Headquarters of the United Nations, specialized agencies, and international and regional organizations, including the League of Arab States, the Organisation of the Islamic Conference, and the Gulf Cooperation Council.
- United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is the regional development arm of the United Nations for the Asia-Pacific region. With a membership of 62 Governments, 58 of which are in the region, and a geographical scope that stretches from Turkey in the west to the Pacific island nation of Kiribati in the east, and from the Russian Federation in the north to New Zealand in the south, ESCAP is the most comprehensive of the United Nations five regional commissions. It is also the largest United Nations body serving the Asia-Pacific region with over 600 staff.
- United Nations Economic Commission for Europe (UNECE)
The United Nations Economic Commission for Europe (UNECE) major aim is to promote pan-European economic integration. To do so, UNECE brings together 56 countries located in the European Union, non-EU Western and Eastern Europe, South-East Europe and Commonwealth of Independent States (CIS) and North America. All these countries dialogue and cooperate under the aegis of the UNECE on economic and sectoral issues.
Organizations Related to Economics Law
- American Law and Economics Association
The American Law and Economics Association is dedicated to the advancement of economic understanding of law and related areas of public policy and regulation. Founded in 1991, the membership includes academic and practicing lawyers and economists. The Association holds an annual two-day meeting in May at which members present papers dealing with a wide variety of topics concerning the interrelation of law and economics. Since 1999, the Association has published the American Law and Economics Review, a refereed journal.
- Canadian Economics Association (CEA)
The Association has for its object the advancement of economic knowledge through the encouragement of study and research, the issuing of publications, and the furtherance of free and informed discussion of economic questions. The Association as such will not assume a partisan position upon any question of practical politics nor commit its members to any position thereupon.
- Economic Policy Institute (EPI)
The Economic Policy Institute, a nonprofit Washington D.C. think tank, was created in 1986 to broaden the discussion about economic policy to include the interests of low- and middle-income workers. Today, with global competition expanding, wage inequality rising, and the methods and nature of work changing in fundamental ways, it is as crucial as ever that people who work for a living have a voice in the economic discourse.
- European Association of Law and Economics (EALE)
The European Association of Law and Economics (EALE) is the institutional response to the increasing importance of the economic analysis of law in Europe EALE was founded in 1984 with the purpose of providing assistance to law and economics scholars and bringing their scholarship to a wider audience, including policy makers, legislators and judges. The annual conference of EALE has become an important forum for the exchange of research findings and ideas. EALE also arranges seminars jointly with other international organizations, as well as local activities in different countries.
- Moody's Economy
Moody's Economy.com, a division of Moody's Analytics, is a leading independent provider of economic, financial, country, and industry research designed to meet the diverse planning and information needs of businesses, governments, and professional investors worldwide. Our research has many dimensions: country analysis; financial markets; industrial markets; and regional markets. Moody's Economy.com information and services are used in a variety of ways, including strategic planning; product and sales forecasting; risk and sensitivity management; and as investment research.
- United Nations Economic and Social Council (ECOSOC)
ECOSOC was established under the United Nations Charter as the principal organ to coordinate economic, social, and related work of the 14 UN specialized agencies, functional commissions and five regional commissions. The Council also receives reports from 11 UN funds and programmes. The Economic and Social Council (ECOSOC) serves as the central forum for discussing international economic and social issues, and for formulating policy recommendations addressed to Member States and the United Nations system
Publications Related to Economics Law
- Economic News by CNN Money
Provides the latest news on Markets, Business, Economy and Personal Finance to name a few.
- International Economic Law and Policy Blog
This blog offers commentary on current developments and scholarship in the field of international economic law and policy. It was started in January 2006 by Joel Trachtman and WorldTradeLaw.net, and is managed by WorldTradeLaw.net One of our goals with this blog is to stimulate discussion of trade issues, and we welcome comments on the blog posts. However, we will delete comments that are profane, mean spirited, racist, sexist, or otherwise inappropriate.
- Journal of Law, Economics and Policy
The Journal of Law, Economics and Policy's mission is to publish and distribute two annual, innovative, thought-provoking journals on law, economics and policy. Each issue will comprise creative, original, ground-breaking articles that appeal to both academia and the practicing legal community.
- Supreme Court Economic Review
Supreme Court Economic Review is a faculty-edited, peer-reviewed, interdisciplinary series that applies world class economic and legal scholarship to the work of the Supreme Court of the United States. Contributions typically provide an economic analysis of the events that generated the Court's cases, its functioning as an organization, the reasoning the Court employs in reaching its decisions, and the societal impact of these verdicts. Beyond academic analysis, SCER contributors stimulate interest in the economic dimension of the Supreme Court and explore solutions for its manifold and complex problems.
- The White House Issues - Economy
President Obama’s central focus is on stimulating economic recovery and helping America emerge a stronger and more prosperous nation. The current economic crisis is the result of many years of irresponsibility, both in government and in the private sector. As we look toward the future, we must confront the many dimensions of this crisis while laying the foundation for a new era of responsibility and transparency.
Articles on HG.org Related to Economics Law
- What Are The Laws Regarding Declaring War?Since its inception, the U.S. has been required to take military action of one sort or another under every president and administration, even before the United States of America had a Constitution. Since the creation of the U.S. Constitution, however, the United States has had laws regarding declaring war. Certain military actions can be taken without formal declarations of war, others cannot. So what are the laws regarding declaring war?
- Warrantless Blood Test Case Waits for U.S. Supreme Court’s DecisionA recent decision by the United States Supreme Court could have a large impact on state laws relating to drunk driving. Many states, including Massachusetts, have what is known as an implied consent law. This law basically gives law enforcement the right to use blood tests or some other kind of test to determine drivers’ blood alcohol content. The reasoning behind the law is that drivers have given their consent simply by obtaining a driver’s license.
- Crime Lab Mistakes Raise Concern over Convictions in MassachusettsThe arrests of two chemists at two separate Massachusetts crime labs earlier this year have raised a lot of questions over the validity of hundreds, if not thousands of convictions in the state. In the most recent case, a chemist is alleged to have tampered with evidence in drug cases, replacing illegal drugs with non-illegal substances according to Reuters. Apparently the chemist used the drugs for her personal consumption.
- Which is Safer: Tap or Bottled Water?Each year, millions of Americans consume billions of gallons of water. The boom in the bottled water industry was fueled, in part, by beliefs that bottled water was cleaner and more heavily regulated than tap water. But then a backlash by others in the media showed that much bottle water was simply tap water in a bottle. So, is one form of water more heavily regulated and safer than the other?
- What Are My Legal Rights if My Flight Gets Canceled or Delayed?Anyone who has done much travel has had to contend with delayed flights or cancellations. Though often unavoidable due to weather or conditions beyond the airline's control, the ones who usually suffer the most are the stranded passengers. So what are your rights if a flight is canceled or delayed?
- Whistleblower Reward Programs Could Help Regain Funds From Tax DodgersWhistleblower reward programs could help California recoup lost tax revenue.
- Whistleblowers Programs Could Help Regain Funds From Tax DodgersAccording to the California Franchise Tax Board, the state is owed more than 6.5 billion dollars in tax revenue. Some contend that implementation of a whistleblower rewards program could help to bring in some of that lost revenue.
- Patients Abandoned By Caregivers at Castro Valley Assisted Living FacilityA Castro Valley assisted living facility was shut down by state social services last month. Patients were left with minimal staff to attend to their needs.
- Why Can't I Use My Phone on a Flight?For years, frequent commuters have complained about the inability to use their electronic devices on planes. Several years ago, the restrictions relaxed somewhat, allowing the use of approved electronic devices while at cruising altitude, and a recent rule change will allow the use of electronic devices, even during takeoff and landing, in the near future. But, why were these things banned in the first place? Why can one still not make a phone call from their cell phone during a flight?
- The Fallout of Arthur Andersen and Enron on the Legal Landscape of American AccountingIt may have been a decade ago, but the fallout of the accounting scandals of the late 1990's and early 2000's continue to resonate through both of the accounting and legal professions. The largely self-regulated accounting profession has enacted numerous changes that continue to evolve in response to the scandals and pressure from government agencies and the public.
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