Economic Methods for Lawyers

Economic Methods for Lawyers

Emanuel Towfigh and Niels Petersen

Responding to the growing importance of economic reasoning in legal scholarship, this innovative work provides an essential introduction to the economic tools, which can usefully be employed in legal reasoning. It is geared specifically towards those without a great deal of exposure to economic thinking and provides law students, legal scholars and practitioners with a practical toolbox to shape their writing, understanding and case preparation.

Chapter 6: Public and social choice theory

Emanuel V. Towfigh and Niels Petersen

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

Extract

Economists often perceive themselves not merely as experts on the economy, but as social scientists who deal with the explanation of many areas of social life. It is thus not astonishing that economic theory has not refrained from trying to explain politics. The economic theory of politics is often called the ‘New Political Economy’ and has found its way into legal scholarship, especially in the United States. The New Political Economy focuses on conflicts between individual and collective rationality of political actors – which comprises voters, politicians, bureaucrats, public administration, parties or lobbyists. It principally applies an empirical or analytical perspective. Rational choice theory thus has to be understood as a specific perspective to think about politics and public administration. It rejects a ‘romantic’, idealist understanding of politics, which was dominant in political science until the 1950s. The idealist perspective treated politicians differently than market actors. While it is commonly assumed that market participants maximize their utility under incomplete information, politicians were thought to be guided by the public interest. Furthermore, it was assumed that they take perfectly informed decisions.

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