THE ECONOMIC APPROACH TO LAW AS AN INTERDISCIPLINARY LEMON AND CALABRESIAN LAW AND ECONOMICS AS TRUST MARK

Abstract

This article moves from the premise that the economic approach to law is valuable to legal research when it does not distort the content and function of the legal norms it purports to analyze. The value comes from useful analytical frameworks, especially of market-relatead matters. This value is particularly important for comparative law since it offers standpoints to look at the law of different jurisdictions from a detached point of view. However, the economic approach has lost momentum and failed to attract the attention of comparativists even in the United States, where it is mainstream legal scholarship. Garoupa and Ulen’s explanation of these ‘hard realities’ rests on two main causes with limited explanatory power because the problem of the economic approach is not limited to comparative legal scholarship (but comparativists make it more apparent). At the same time, in previous scholarship, Garoupa and Ulen claimed that the economic approach to law was less successful outside the United States and Israel due to legal parochialism: rent-seeking academic gatekeepers raise barriers to foreign legal innovation to their own benefit. Evidently, legal parochialism fails to explain the hard realities of the economic approach to comparative law in the United States. A plausible diagnosis reconciling this explanatory conflict is that we face an interdisciplinary lemon problem: quality variation of the economic approach to law and its opacity to legal scholars leads to a suboptimal level of interaction with economic analysts. The principled dereliction of problematic economic analysis negatively impacts also useful economic analysis. This article claims that shifting the focus from mainstream (comparative) Economic Analysis of Law to Calabresian Law and Economics will improve the situation. The latter offers a set of research questions and methods of interest to comparativists and answers them in methodologically sound ways, to the benefit of comparative research.