Law and Economics in Latin America. Some Ethical Issues Reconsidered
| Autor | Adrian Kuenzler |
| Cargo | Faculty of Law, Zürich University, Switzerland, and Yale Law School, United States |
| Páginas | 243-271 |
LATIN AMERICAN LEGAL STUDIES Volume 4 (2019), pp. 243-272
LAW AND ECONOMICS IN LATIN AMERICA.
SOME ETHICAL ISSUES RECONSIDERED
AdriAn Kuenzl er*1
Abstract
In Latin America, law and economics scholarship is gradually
nding its way into court decisions and legislative enactments,
both with respect to an increasing tendency to assess the overall
consequences of legal rules, in terms of a growing application of
cost-benet analyses, and in the form of more incentives-driven
reasoning. Until today, however, the literature on the movement’s
normative foundations has failed to nd common ground on how
to justify its theoretical suppositions. This article illuminates this
debate and provides an overview over some of the approach’s
most basic assumptions that relate to its positive and normative
implications.
Keywords: Law and Economics, Rational Choice Theory, Efciency, Utilitarianism, Wealth
Maximization, Consensus Theory, Pragmatism
I. INTRODUCTION
It has been almost two generations since Ronald Coase initiated the rise
of law and economics in the United States. Despite the movement’s resounding
success both in scholarship and practice, most civil law jurisdict ions have remained
impervious to the adoption of the economic analysis of law as an integral part of
their methodology –even if a number of signi cant scholarly contributions orig inated
from the civil law world.1 At least in Latin America, however, there is a growi ng
tendency to integrate economic reasoning into legal thought, as a number of recent
Argentinia n and Brazilia n court decisions and leg islative enactments attest.2 This
rising tra nsformation notwithstand ing, deployment of economic reasoning remains
scarce in most civil law jurisdictions. This is due, in part, to a lack of agreement about
the movement’s normative foundations. This article illuminates this debate and
provides an overv iew over some of the approach’s most fundamental assumptions
*1 Faculty of Law, Zürich University, Switzerland, and Yale Law School, United States (adria nkuen-
zler@gmail.com). I would like to thank the University of San Andrés, Buenos Aires, Argentina, for
giving me an opportunity to present lectures in August 2018 on which parts of this article are based,
and to anonymous reviewers for insightful comments. All errors are my own. Article received on
September 20, 2018 and accepted for publication on December 6, 2018.
1 Some of the most important works include AssmAnn, Kirchner and schAnze (1993); schäfer and
Ott (2005); tOwfigh and Petersen (2017).
2 For an overview of these developments see irigOyen-testA (2015); PArgendler and sAlAmA (2015).
Adrian Kuenzler244
LATIN AMERICAN LEGAL STUDIES Volume 4 (2019)
that relate to its positive and normative implications. Specica lly, thi s article provides
a survey of central i ssues confronting contemporary law and economics scholar ship
and blends the most contentious issues to equip t he reader with a comprehensive
understanding of its underlyi ng suppositions.
The economic analysis of law addresses t wo principal i ssues about legal rules–
one that is descriptive, and another that is normative. The descriptive issue relates to
the effects, i.e., the consequences of legal norms and judicial decisions in reality. For
example, the economic analysis of law asks how car accident liability rules af fect the
number and severity of car accidents, t he compensation of victi ms of car acc idents,
an d th e pa rt ies’ li tig at ion c ost s t o en forc e l iab ili ty. 3 The normative issue evaluates the
social desirabil ity of legal rules from an economic perspective and makes statements
about how the law should be designed to achieve a social ly desirable resu lt.4 While
particular a reas of law, such as antitrust, business corporat ions, and the regulation
of economic activ ity more general ly have long been subject to economic ana lyses,
since the 1960s, proponents of the economic ana lysis of law have expanded t heir
scope of research into almost al l areas of the law, including, for instance, crimi nal,
evidence, and family law.
This expansion is closely connected w ith research conducted by a number of
disting uished American economists. In 1960, Ronald Coase demonstrated that the
allocation of property r ights through the legal system w ill only af fect the result of
pr i v at e b ar g ai n in g i n a w or ld of hi g h tr a n sa ct i on co st s . 5 O th e rw i se , p r iv at e b ar g a in i ng
will always lead to a Pareto efcient outcome–irrespective of the manner in which
the law allocates i ndividual property rights. In 1965, A rmen Alchian presented a
compre hensi ve economic theory of proper ty rights.6 In 1968, Gar y Becker extended
the domain of t he economic analysis of law to a wide range of nonmarket behavior
such as crime, racial d iscrimination, fam ily organization, and drug add iction.7 In the
197 0s , G u id o Calabresi and Douglas Melamed published a comprehensive treatment
of the efcient distribution of risks resulting from har m.8 In 1971 and 1975, William
Landes and Richard Posner wrote a series of foundational articles on the economic
analysis of the cr iminal process and t he court system.9 Richard Posner is the author
of t he most signicant textbook on the economic a nalysis of law, which, in 2014,
appeared in its ninth ed ition.10
3 cAlAbresi (1970).
4
cAlAbresi (1961).
5 cOAse (1960).
6 AlchiAn (1965).
7 becKer (1968).
8
cAlAbresi and melAmed (1972).
9 lAndes and POsner (1975).
10 POsner (2014).
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