Decision-Making in a Regulatory Environment: Representing the Butterfly
LAW AND DEVELOPMENT IN THE 21ST CENTURY: FACING COMPLEXITY, J. Hatchard & A. Perry-Kessaris, eds., Cavendish, London, 2003
9 Pages Posted: 26 Jul 2009
Date Written: 2003
‘Policy-makers have long been encouraged to believe in the check-list mentality which lies at the heart of conventional economics. Do A, B and C, and the consequence will be X. But this offers merely the illusion of control rather than the reality.’
Butterflies are paradoxically entrancing creatures. Their appeal lies in the contrast between the symmetry of their structure and markings on the one hand, and their errant flutterings on the other. But how do you effectively present the complexities of the butterfly? Do you efficiently pin it down and mount it on the wall? Do you loosely observe it in its natural habitat? Or do you adopt a middle course, perhaps popping it into the lepidopteran equivalent of the aviary?
For those who study the role of law in economic development, the behaviour of decision-makers presents a similarly seductive quandary. We are drawn to the contrast between their occasional rhythm and consistency on the one hand; and to their contrasting independence and entrepreneurial flair on the other. How do you effectively present the complexities of the decision-maker? Do you efficiently map them out in a series of equations based on strict and often unrealistic assumptions, in the manner of the traditional economist? Do you observe them more loosely in their natural habitat, in the manner of the anthropologist? Or do you adopt a middle course, considering them as organic beings framed by a mathematical cage?
These choices are central to the study of decision-making, which in turn is central to the study of regulation, which in turn is central to the study of law and economic development. If we are to harness or constrain the market for the purposes of promoting economic development, we must affect the decisions of those individuals who shape it.
This paper critically assesses some of the major contributions of the economic approach to the understanding of decision-making. Its aim is to highlight the utility and limits of the economic approach to the subject, with a view to encouraging a deeper level of co-ordination between the fields of regulation, law and development and economics.
Keywords: law and uncertainty, law and decision making
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