Eli Salzberger (University of Haifa - Faculty of Law) has posted The Economic Analysis of Law - the Dominant Methodology for Legal Research?! on SSRN. Here is the abstract:
The Economic Analysis of Law will soon celebrate half a century. In recent decades it has been emerging as the dominant theoretical paradigm and scientific methodology for legal academia, and it is gradually capturing various segments of the legal practice as well. Law and Economics was also acknowledged recently as a sub-field of the science of economics and some argue that law became one of the most important areas of applied economics. Although for three decades Law and Economics prospered mainly in North America, in the last decades it is rapidly increasing also in Europe and elsewhere.
This short essay focuses not on the content of Law and Economics but on its context. It places Law and Economics within a grand map of legal theories, adopting Thomas Kuhn theory of the evolution of science, and it offers a very broad definition of Law and Economics vis-à-vis the methodology of legal research, rather than its subject matters. Subsequently, the paper points to several shortcomings of the majority of contemporary Law and Economics literature and to the need for changes in other areas to adapt Law and Economics to the 21st century. In this context, two major points are emphasized: the role of technology within the L&E methodology and globalization as an important factor in the positive and normative analysis of law.
And here is some more from the paper:
To perform a normative analysis one has to define a normative objective, the source of which is outside the scope of the science of economics. In this sense, and in the framework of our broad definition of “economics”, the normative goal can be considered as one of the simplifying assumptions within the economic methodology. The leading normative goal of most economic analysis literature is efficiency. However there are several competing definitions of efficiency - maximization of utility, maximization of wealth, Pareto optimality35 -and competing views as to the goal of efficiency as the primary normative goal, as advocated by Posner,36 or as a second best to utility maximization, which cannot be achieved because of measurement problems, as advocated by Welfare Economics. In addition, efficiency is not necessarily an exclusive normative goal. Any teleological principle, including distributional principles (e,g. Rawls theory of justice), can be set as the normative goal of economic analysis. A major share of constitutional law and economics relates to a different normative goal (which coincides with one specific notion of efficiency), emerging from different historical roots – consensus or Pareto optimality, which evolves from the Social Contract theories of the state.37 In principle, also non-teleological normative principles can serve as normative goals for normative economic analysis.
And one more bit:
In other words, an inbuilt incoherence of the Law and Economics project as a whole is that, based on the rigid pre-suppositions of the paradigm, its positive analysis cannot predict the adoption of its normative recommendations. This generates a lack of inner equilibrium between normative and positive analysis. In this sense there is a major difference between free and fully competitive economic markets and the political markets. Within the former the conduct of individuals, each of which is lead by self-interested goal to maximize his or her preferences or utility, is expected to lead to efficient equilibrium, i.e. to utility maximization, creating equilibrium between positive and normative analyses. In the latter, self-interested conduct by politicians, bureaucrats and judges, which is the consequence of the very same pre-suppositions that are the bedrock of the normative goals of mainstream Law and Economics, does not necessarily lead to such efficient or utility maximizing collective choices. In other words, once central intervention is required as a result of a market failure, the economic analysis cannot predict that this intervention will lead to the desirable solutions.
There is quite a bit in this paper that I wouldn't endorse, but it is fascinating & worth a read.
