Table of Contents

Law, Economics and Evolutionary Theory

Law, Economics and Evolutionary Theory

Edited by Peer Zumbansen and Gralf-Peter Calliess

Law and economics has arguably become one of the most influential theories in contemporary legal theory and adjudication. The essays in this volume, authored by both legal scholars and economists, constitute lively and critical engagements between law and economics and new institutional economics from the perspectives of legal and evolutionary theory. The result is a fresh look at core concepts in law and economics – such as ‘institutions’, ‘institutional change’ and ‘market failure‘ – that offer new perspectives on the relationship between economic and legal governance.

Chapter 9: Legal Evolution between Stability and Change

Martina Eckardt

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


Martina Eckardt INTRODUCTION 1. Institutions can have a decisive impact on economic performance. The law is particularly important in shaping the institutional framework for economic activities. Legal rules can be viewed as socio-technological devices used to help individuals solve the coordination problems and conflicts that arise in an environment of scarce resources.1 In such an environment, the law affects both the allocation as well as the distribution of resources, and is itself influenced and altered by economic evolution. However, our understanding of the determinants and mechanisms of legal change from an economic perspective remains rather weak. The traditional neo-institutional economics and law and economics perspectives have made a measured contribution to our theoretical and empirical understanding of legal change.2 Yet these two perspectives are deeply rooted in neoclassical microeconomics, and as such, they remain at their core concerned with the impact of given legal rules on economic activities. To a large extent, this reflects the inherent static nature of neoclassical microeconomics (stable preferences, rational choice behavior, and equilibrium),3 wherein the economic problem is reduced to optimization (i.e., choosing the best option from a given set of alternatives). The decisive question of how the legal alternatives themselves are generated is thus not analysed and so novelty and change are assumed to be exogenous. Change, on the other hand, is the main starting point of the evolutionary economics perspective. Calling into question the stable preferences on which the traditional premise of optimization is based,4 evolutionary economics purports that innovation, uncertainty,...

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