law and economic versus public choice

law and economics

  • systematic analysis of legal doctrines and jurisprudence base on economic (kind of mixing tools of economics)

    • economic reasoning of legal problems to reveal strengths and limitations of legislation and jurisprudence arguments

    • how legal rules and institutions influence economic behavior and outcomes; how economic principles inform legal design

    • property rights, contract, torts, criminal law, and antitrust law

  • microeconomics tools: (understanding how incentives influence the behavior of the actors)

    • cost-benefit analysis, incentives, efficiency to legal system

    • economic effects of legal rules: effect of liability rules on behavior; effect of property rights on resource allocation

    • coase theorem: legal rules and bargaining/transaction costs

public choice

  • apply economic tools to political processes: politicians, voters and bureaucrats as rational, self-interested actors (were investigating how “leaders” act upon self-interest"

  • topics:

    • voting behavior and systems

    • behavioral of political actors

    • collective decision-making and its inefficiencies

    • constitutional design and economic implications

    • government failures as opposed to market failures

overlaps

  • both use microeconomics theories and rational choice model

  • both analyze institutions (legal or political) shape incentives and outcomes, often focusing on inefficiency

  • public choice can inform L&E by explaining political processes to create legislation

  • L&E can inform public choice by analyzing legal frameworks of political behavior