The Cross-Atlantic Law and Economics Divide: A Dissent

Abstract

While law and economics has become an established mode of analysis within the United States, it is generally asserted that law and economics "barely exists" in European countries. In order to support this claim, scholars have looked to various metrics, such as hiring of economists by law schools, publications in major journals, and law and economics conference participation, all of which suggest the United States as being significantly more advanced than Europe in its development of law and economics. This Article states that the gap between the United States and Europe regarding the development of law and economics is greatly exaggerated. We argue that, due to the failure to control for institutional differences between academics in the United States and Europe, existing metrics fail to adequately capture the rate at which law and economics has developed in Europe. In order to appreciate the contribution of law and economics in Europe, we emphasize the distinction between fundamental and applied domestic contributions to a field of scholarship. We suggest that a significant body of European law and economics scholarship fits in the applied group. Moreover, given the institutional obstacles to interdisciplinary research at European law schools, specifically the lack of incentives to produce such scholarship, the more puzzling question is why law and economics is practiced at European law schools as much as it is today. We find that the field of economic analysis of law has inspired impressive entrepreneurial efforts in Europe. The accomplishments of the law and economics movement in Europe are unfairly neglected when measuring scholarly productivity without accounting for institutional differences in educational markets.

Keywords: Law and economics, Europe, US, law schools, law journals

JEL Classification: K00