Conference in Tilburg on meta law and economics; Professor Peter Cserne's account

MetaLawEcon: a TILEC workshop on the foundations of law and economics (Friday, 26 Nov 2010, Tilburg University, The Netherlands)
Péter Cserne (peter.cserne@uvt.nl)

When a discipline grows and gets well-established, many researchers tend to think that its foundational problems have been solved. This misperception is related to the fact that researchers often do not bother themselves with meta-level problems of their scholarship. For good or bad, they “just do it”, without much reflection on what they are doing. Although methodological self-reflection in not a panacea and rarely a full-time job, time to time it is useful to look at one’s work in a more abstract way.

Law and economics scholars are no exception. Fifty years after Coase’s The problem of social cost, law and economics seems to have become the lingua franca of US legal scholarship. Compared to the 1970s and 1980s, the discipline has become more pluralistic in its methods, more self-critical about its normative assumptions, assertions and ambitions, and it is increasingly popular in Europe (and elsewhere in the world). Still, there are significant misunderstandings standing in the way of the reception of economic insights in European legal academia. It is often suggested that this is related to the unresolved foundational problems of the discipline. Certainly, the meta-level discussion has been going on in many ways: Kaplow and Shavell’s Fairness v Welfare (2002) has provoked dozens of critical reviews, symposia are held (e.g. “Law and Economics and Legal Scholarship”, Chicago-Kent Law Review 79 (2004)), PhD theses written (e.g. by Gerrit de Geest, Horst Eidenmüller, Anne van Aaken, Klaus Mathis), collective volumes published, e.g. The Theoretical Foundations of Law and Economics, ed. Mark D. White (Cambridge 2008), Foundations of Law and Economics ed. Cooter and Parisi (Elgar 2009).

The interdisciplinary character of law and economics research raises further questions about the possibilities and limits of intellectual integration. While economists are more or less aware of the foundational problems of economic theory, they are rarely confronted with jurisprudential concerns. Lawyers who are working on doctrinal or policy problems are often confused about what to expect from economics. Finally, jurisprudential critiques of law and economics often have a straw man as their target.

These considerations inspired the Tilburg Law and Economics Centre (TILEC) at Tilburg University, the Netherlands to organise a workshop on the foundations of law and economics. Economists, legal scholars and philosophers from numerous European countries attended the workshop, amongst them a large number of students of the Erasmus Programme in Law and Economics. The keynote speaker was Professor Lewis A. Kornhauser from New York University. A leading scholar in law and economics who has published path breaking papers in many legal areas and also plays an important role in the dialogue between law and economics, legal and political philosophy, and legal theory.

Altogether, the presentations and the discussions showed at least three directions where further theoretical research has to be done. First, the paper by Régis Lanneau (Université Paris Nanterre) has generated a vivid discussion about the methodological status of economic models. While in his keynote speech Lewis Kornhauser analysed the role of formal models both in the explanation of legal doctrine and legally relevant behaviour and in legal design, Stephan Tontrup (Max Planck Institute, Bonn–Jena) discussed through examples from laboratory and field experiments the methodological difficulties of integrating experimental insights in law and economics. Wojciech Zaluski (Jagellonian University, Kraków) showed the different ways the formal models of game theory can be useful in the explication of legal interpretation. These alternative methods also raised questions about the right balance between formal modelling and empirical research in understanding human behaviour and social interaction in legal settings. Discussing the impact of experimental methods on law and economics, Georg von Wangenheim (University of Kassel) argued that they cannot replace microeconomic theory in explaining behaviour but they can both improve the predictions and challenge the normative framework of welfare economics.

A second focus of the discussions reflected on the apparent tension that while law is local, economic theory claims to be universal. This raised the question about the various ways how theoretical insights and empirical findings can be integrated in legal theory, legal education and legal practice. Joining the workshop from Canada through video conference, Prof. Ejan Mackaay (University of Montréal) discussed the prospects and limits of law and economics in civil law countries and reflected on his ample experiences with introducing law and economics to the French speaking legal academia and education. As Pierre Larouche (Tilburg University) pointed out, the term civil law is often used ambiguously in legal literature, as it is sometimes opposed to statutory law, sometimes to common law. The second opposition also led the discussion into the recent controversies about the legal origins literature, and more fundamentally, raised questions about the interaction of economic and comparative analyses of law.

Third, somewhat surprisingly, the discussion showed that a few key concepts and theories of law and economics, such as transaction costs and the Coase theorem which are often thought to be uncontroversial cornerstones of the discipline, raise fundamental problems and misunderstandings. Giuseppe Dari-Mattiacci (University of Amsterdam) argued that the apparent tension between the Coase theorem and Calabresi and Melamed’s theory of legal remedies is linked to whether transaction costs are treated as exogenous or as endogenous variable. Mariusz Golecki (University of Łódź) showed that apart from the informal statement of a theorem, Coase’s ‘The Problem of Social Cost’ includes many pioneering insights about the functioning of the legal system which are directly relevant to legal scholarship.

This workshop marked the first step of MetaLawEcon, an initiative for concentrating forces and creating a network of lawyers, economists, and philosophers for reflection on the theoretical challenges of using economics in legal research. Those interested in the activities of MetaLawEcon should contact the organiser at peter.cserne@uvt.nl