Economics and the Law: Where Is There Consensus?

Article excerpt

John Moorhouse [*]

Andrew Morriss [**]

Robert Whaples [***]

Abstract

We investigate where consensus exists in the field of Economics and the Law by analyzing responses to a questionnaire mailed to members of the American Law and Economics Association. These specialists are impressed by the efficiency of the common law, while few believe that the jury system is efficient. Fifty-nine percent conclude that there are currently too many attorneys in the U.S. Forty-one percent believe that there are about the right number--none think that there are too few. Among the other issues in the survey are precedent, contract law, litigation abuse, negligence, nuisance, punitive damages, no-fault auto insurance, product liability, contingency fees, losers paying for civil litigation, compensation for regulatory takings, privacy rights, and the economics of crime and punishment.

Economics and the Law: Where Is There Consensus?

The economic analysis of the law has become a major field within economics, touching a wide range of issues that are vital to American society and are the subject of many important national debates. Specialists in the field of law and economics have much to contribute to these debates, but policy makers, academics, and the general public often know little about these scholars' findings and informed opinions. Is there consensus in the field of law and economics? It's tough to tell. No one has systematically observed the final product of the intellectual production process--the judgments reached by the large, sometimes silent, body of scholars after the evidence in support of competing views has been weighed.

In this paper we investigate whether consensus exists by analyzing responses to a questionnaire mailed to law and economics specialists who are members of the American Law and Economics Association (ALEA). Respondents were asked to note whether or not they agreed with a set of propositions, using a five-point scale in which 1 equals "strongly disagree" and 5 equals "strongly agree." The responses are given in Table 1 and show consensus on many important issues. but substantial disagreement in some areas.

The ALEA is "dedicated to the advancement of economic understanding of law and related areas of public policy and regulation." "All the different 'schools' of economic analysis of law are represented in the Association." (These quotes are from a letter accompanying the 1996 Membership Application and Renewal Form.) Given its professional standing and membership policies, we assume that ALEA members are representative of the broader body of law and economics scholars. In the spring and summer of 1996 we mailed questionnaires to everyone listed in the most recent (1994) ALEA membership directory, excluding only students and those with addresses outside the U.S. Sixty-three usable questionnaires were returned--a response rate of 16.2 percent. We cannot think of compelling reasons that this method would yield a biased set of responses, and assume that the respondents are a random set of ALBA members.

This assumption is strengthened by the fact that our respondents' beliefs are very similar to those of economists in general. In order to compare experts on law and economics with a broader range of economists, we included in our survey five propositions, which have been used in previous surveys and are not related to the law. (The earlier respondents did not use a scale of 1 to 5, but were asked if they "generally agreed," "agreed, with provisos," or "generally disagreed" with each of the propositions. The wording of the propositions was exactly the same in both surveys.) In nearly every case, the responses of AEA members were almost exactly the same as those of members of the American Economic Association (AEA). Table 1 shows that 88 percent of law and economics experts believe that "a minimum wage increases unemployment among young and unskilled workers. …