The Rule of Law, Law & Economics, and Universalism

Abstract

Law & Economics has evolved from a Western-originated movement to a worldwide intellectual paradigm whereby the economic analysis of law scrutinised not only upon the alleged efficiency of Western norms but also on the legal and institutional prerequisites for economic efficiency in the developing world. In that respect, the re-discovery of the efficiency rationale of the Rule of Law has been a central contribution of Law & Economics.

Reversely, Rule of Law scholars have largely remained immune from the so-called ‘economism’ of the Law & Economics movement. Indeed, the deontological arguments attached to the Rule of Law have, so far, conflicted with the consequentialist arguments associated with the Law & Economics movement. The integration of the Law & Economics lessons into the Rule of Law thinking has therefore been insignificant. On the contrary, Law & Economics scholars have rediscovered the Rule of Law without qualifying sufficiently their lessons to make this movement transplantable to the Rule of Law thinking.

This paper intends to fill this gap by vouching for a better common understanding between the Rule of Law and Law & Economics through three steps. First, the interactions between the legal and economic orders shall be outlined (1). Second, the Law & Economics’ incoherence with the Rule of Law requires amendments to Law & Economics (2). Third, the reception of Law & Economics by Rule of Law scholars can be lubricated by the universalism of both schools of thoughts (3). I conclude by envisaging the prospects for the ‘Rule of Law & Economics’ common movement to develop in the future.

Keywords: Rule of law, Economics analysis of law, Universalism

JEL Classification: K21