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Contribution to Book
Law, Economics and Courts
Oxford Research Encyclopedias: Economics and Finance (2019)
  • Nuno Garoupa, Texas A&M University School of Law
Law and Economics is an important growing field of specialization for both legal scholars and economists. It applies efficiency analysis to understand property, contracts, torts, procedure and many other areas of the law. The use of economics as a methodology to understand law is not immune to criticism. The rationality assumption and the efficiency principle have been intensively debated. Overall, the field has advanced in recent years by incorporating insights from Psychology and other social sciences. In that respect, many questions concerning the efficiency of legal rules and norms are still open and respond to a multifaceted balance between diverse costs and benefits. The role of courts in explaining economic performance is a more specific area of analysis and it has emerged in the late 1990s. The relationship between law and economic growth is complex and debatable. An important literature has pointed out to significant differences at the macro level between the Anglo-American common law family and the civil law families. Although these initial results have been heavily scrutinized, other important subjects have surfaced such as convergence of legal systems, transplants, infrastructure of legal systems, rule of law and development, among others.
  • Law and Economics,
  • common law,
  • business law,
  • courts,
  • legal families,
  • rule of law,
  • economic growth
Publication Date
Jonathan H. Hamilton, Avinash Dixit, Sebastian Edwards, Kenneth Judd
Oxford University Press
Citation Information
Nuno Garoupa. "Law, Economics and Courts" Oxford Research Encyclopedias: Economics and Finance (2019)
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