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The Transatlantic Divergence in Legal Thought: American Law and Economics vs. German Doctrinalism

Kristoffel R. Grechenig
Max-Planck-Institute for Research on Collective Goods; University of St. Gallen - Department of Law; Vienna University of Economics and Business Administration - Department of Business Law; University of St. Gallen - Department of Law

Martin Gelter
Fordham University School of Law; European Corporate Governance Institute (ECGI); Vienna University of Economics and Business Administration - Institute for Civil and Business Law

2007

U. of St. Gallen Law & Economics Working Paper No. 25
Harvard Law and Economics Discussion Paper No. 14

Abstract:
Economic analysis plays a major role in the American legal discourse, while its position in the German-speaking legal debate remains comparatively limited. In Germany and Austria, a widespread aversion against law and economics can be observed among legal scholars. This article advances an explanation for this divergence on the basis of two main factors: First, American legal realism enjoyed great success, whereas the German free-law movement failed to leave a lasting impression. While legal realism transformed American legal thought and opened up the discourse to policy arguments, the predominant German legal theory emphasizes the internal coherence of the legal system, and assigns only a limited role to external elements. Second, the different philosophical roots and attitude towards utilitarianism and consequentionalist thinking in general can explain why law and economics takes a prominent position in the US legal academia. We argue that a convergence of the discourses over the medium term is unlikely.

Keywords: Law and Economics, Legal Theory, Legal History, Legal Realism, Free-law movement, Legal Evolution, Utilitarianism, Europe, Germany, United States, Divergence

JEL Classifications: B15, B25, K00

Working Paper Series

Date posted: October 05, 2007 ; Last revised: June 20, 2009

Suggested Citation

Grechenig, Kristoffel R. and Gelter, Martin, The Transatlantic Divergence in Legal Thought: American Law and Economics vs. German Doctrinalism (2007). U. of St. Gallen Law & Economics Working Paper No. 25; Harvard Law and Economics Discussion Paper No. 14. Available at SSRN: http://ssrn.com/abstract=1019437

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Kristoffel R. Grechenig (Contact Author) Max-Planck-Institute for Research on Collective Goods ( email ) Kurt-Schumacher-Str. 10 D-53113 Bonn Germany +49 228 91416-51 (Phone) +49 228 91416-851 (Fax) HOME PAGE: http://www.coll.mpg.de/grechenig.html
University of St. Gallen - Department of Law ( email ) Bodanstrasse 4 CH-9010 St. Gallen Switzerland +41 71 224 3006 (Phone) HOME PAGE: http://www.rwa.unisg.ch/org/rwa/web.nsf/wwwPubPersonGer/C1FDB36B816ACA00C12572CA002B448B
Vienna University of Economics and Business Administration - Department of Business Law Vienna A-1090 Austria
University of St. Gallen - Department of Law CH-9010 St. Gallen Switzerland
Martin Gelter Fordham University School of Law ( email ) 140 West 62nd Street New York, NY 10023 United States 646-312-8752 (Phone) HOME PAGE: http://law.fordham.edu/faculty/10929.htm
European Corporate Governance Institute (ECGI) Brussels B-1050 Belgium HOME PAGE: http://www.ecgi.org/members_directory/member.php?member_id=621
Vienna University of Economics and Business Administration - Institute for Civil and Business Law ( email ) Althanstrasse 39-45 Vienna A-1090 Austria