Law and Economics
In the research field of Law and Economics, methods of modern economics are utilized to answer questions arising in the field of law making as well as in administering the rules of law. In the U.S., Law and Economics has been established since the 1970s as an independent discipline. As of today, many teaching- and research institutions exist in Europe as well.
The University of Bonn is one of the few Universities in Germany uniting the Department of Law and the Department of Economics in one Faculty, the “Rechts- and Staatswissenschaftliche Fakultät” (Faculty of Law and Economics). These combined Faculties were formerly very common. As the specialization of the individual disciplines became more and more extensive, many the formerly combined Faculties split into separate Faculties of Law and Faculties of Economics. The University of Bonn never succumbed to this trend. And if not mistaken, current developments proof this decision to have been very wise. In any case, several German Universities have recently reversed the separation of the Faculties of Law and Economics.
While in the 19th century (macro-) economics mainly evolved from the field of law, today modern economics give al lot of important stimulus to the field of law. The origins of this fertile connection of the two disciplines lie in the United States of America. Research and teaching in the field of law in the U.S. have long been dominated by the so called “legal realism”. Legal realism places less emphasis on legal dogmatics but puts the focus of attention on the social and economic roots of legal decisions. In the post World War II period a broad range of new approaches were developed by U.S. legal researchers from Law and Literature to Law and Feminism to Law and Psychology. Most of these new research areas never got past being just a niche even until today. Law and Economics clearly stands out distinctively in this respect. It is not only the fact that many well renown Universities offer a separate chair for research and legal education in Law and Economics that sets Law and Economics apart from the other disciplines. Most importantly, the general approach of Law and Economics, its vocabulary and analytic methods have entered the mainstream of U.S. legal research and even influence decisions of top level courts in many ways. This is true not only in commercial law, but in all sub-disciplines of law, all the way from civil law to criminal law and constitutional law as well. The economic analysis of law as carried out by the supporters of Law and Economics clearly is not an undisputed approach. However, it is difficult to deny that this approach has brought about a considerable gain in analytical clarity and argumentative precision. Even those who distrust economic criteria in the field of law and do not agree on individual results of the economic analysis of certain aspects of law will have to admit that within the scientific framework of Law and Economics a much more precise discussion about legal problems is possible than without its additional implications. Today, not only in the U.S. but also in Europe, discourses about legal policy as well as the application of law often make use of the terminology of Law and Economics. Research results provided by ways of economic analysis of law are widely accepted and well taken seriously.
Economic theory as such has evolved considerably in recent times. Game theoretic studies allow a better understanding of the functional capability and operation of markets. The research branch of behavioural economics tries to generate new scientific findings by analyzing the behaviour market participants on certain markets. All those new developments in modern economics are important for the field of law as well. The CASTLE brings together the current state of research from both areas, Law as well as Economics. Some members of the department of Economics focus their research interest on the economic analysis of institutions. This comprises the analysis of legal structures. At the department of Law, several members of the faculty are very familiar with the methods and results of the economic analysis of institutions. Numerous collaborations in research and teaching are proof of the convergence of the respective scientific interests.