Basic Instincts: Economic Analysis, Legal Theory and the Dynamics of Participation

Abstract

I have written many times about the central role of institutional choice and comparative institutional analysis in analyzing law and public policy. In this paper, I focus on an approach to comparative institutional analysis and the analysis of law and public policy that bridges analytical and ideological gaps. The central feature of this approach is participation. Participation provides important links between economic, non-economic and even anti-economic analyses. It should be comfortable both to those interested in law and economics and to those interested in civic republicanism. It provides a way for law and economics to return to the basic instincts of economics and to explore areas of law and public policy previously foreign to law and economics. It also provides a way for non-economists to gain from valuable economic insights while remaining consistent with their primary intuitions. In the first two sections, I will clear the ground for analysis by showing why institutional choice and comparative institutional analysis are the essence of economics and the core of law. In the process, issues of participation and the dynamics of participation will begin to surface. In the third section, I will focus directly on participation and show its place in the intuitions of both economics and law. In the fourth section, I will use these insights to explore the character of the courts and the interaction between goal choice and institutional choice.

Keywords: comparative institutional analysis, institutional choice, participation, dynamics of participation, economic analysis, neoclassical economics, institutional economics, new institutional economics, legal theory, legal analysis, law and economics, market malfunction, welfare economics

JEL Classification: K00