The Economics of Harmonizing European Law

The Economics of Harmonizing European Law

New Horizons in Law and Economics series

Edited by Alain Marciano and Jean-Michel Josselin

One of the major effects of the continual process of European integration is the growing importance of transnational institutions and the accompanying legal harmonization. Such institutional changes have led to a seemingly irreversible transformation in public decision making, whereby power at the national level is displaced to the European and regional levels. This essential book provides a law and economics analysis of the challenges arising from these shifts in authority.

Chapter 12: Legal and economic principles for the common administrative law in Europe

Ju_rgen G. Backhaus

Subjects: economics and finance, law and economics, law - academic, european law, law and economics


J├╝rgen G. Backhaus INTRODUCTION The law and economics of administration is still an emerging and somewhat disparate field. The grouping together with regulation in the Journal of Economic Literature classification system reflects a very specific view of the field which is not shared on the European continent. Regulation is, by necessity, the imposition of rules on some economic agent, hence an attempt to override market forces through political discretion. The traditional view, on the other hand, as it developed in France and Germany more than two centuries before the modern instruments of regulation were introduced, emphasizes the enabling character of administrative structures so as to allow market forces to develop and economically meaningful decisions to be taken in the interest of economic growth and prosperity. The structure of this chapter follows from this basic proposition. Section 12.1 offers a succinct characterization of the entire field of the economics of law and administration emphasizing the two different approaches on the European continent on the one hand and the American regulatory system on the other. In order to understand the latter, the basic category is rent-seeking, a concept that is briefly being illustrated. Section 12.2 offers a short survey of the relevant material for further reference. Section 12.3, however, offers an integrative approach. There are economically meaningful principles embedded in administrative legal doctrine which surface to different degrees in both types of legal approaches. These principles offer the best hope to arrive at a coherent analytical approach to the diverse area...

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