The Boundaries of Normative Law and Economics

18 Pages Posted: 16 Sep 2020

See all articles by Eric A. Posner

Eric A. Posner

University of Chicago - Law School

Date Written: September 14, 2020


Normative law and economics remains controversial decades after its emergence despite its successes in legal scholarship and its similarity to influential approaches in economics. The reason is that many of its proponents have exaggerated its value for policy while discounting other methods, tainting the enterprise. Normative law and economics as a method of policy analysis properly operates within narrow boundaries defined by its four main premises: (1) welfarism based on unrestricted preferences; (2) unimportance of distributional effects; (3) unimportance of impacts on non-welfare values; and (4) rational instrumental behavior of affected persons. Scholars have made progress in normative law and economics by abstracting away from these premises. The most successful work proposes “modular” insights at a middle level of abstraction. But this work can be properly put to use only if the excluded factors are reintroduced into analysis prior to application.

Suggested Citation

Posner, Eric A., The Boundaries of Normative Law and Economics (September 14, 2020). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 914, Available at SSRN: or

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