Deakin, Simon; Carvalho, Fabio --- "System and Evolution in Corporate Governance" [2011] ELECD 241; in Zumbansen, Peer; Calliess, Gralf-Peter (eds), "Law, Economics and Evolutionary Theory" (Edward Elgar Publishing, 2011)

Book Title: Law, Economics and Evolutionary Theory

Editor(s): Zumbansen, Peer; Calliess, Gralf-Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848448230

Section: Chapter 5

Section Title: System and Evolution in Corporate Governance

Author(s): Deakin, Simon; Carvalho, Fabio

Number of pages: 20

Extract:

5. System and evolution in corporate
governance
Simon Deakin and Fabio Carvalho

1. INTRODUCTION

The aim of this chapter is to explore the scope for synthesis between systems theory and
new institutionalist approaches within economics. Such a project has the potential to
offer, among other things, a more fully rounded view of legal evolution. At first sight it
may seem that the methodological assumptions of economics are too far removed from
those of systems theory for any kind of synthesis to be feasible. Economics describes
itself as a behavioural science which studies the logic of choice under conditions of scar-
city. Systems theory, on the other hand, focuses on the communicative processes through
which social order is reproduced over time. In most contexts the two disciplines address
different questions and use mutually incompatible techniques. However, as economics
becomes increasingly concerned with the role institutions play in coordinating the behav-
iour of economic agents, it encounters a set of issues which are also central to systems
theory. The nature of the link between legal change and economic development is one
of these issues, and the interdisciplinary field of `law and economics' now provides the
terrain on which rival conceptions of the evolutionary process are being advanced.
We begin our analysis by attempting to unpack the ontological assumptions made
about law and the legal system within different strands of the law and economics lit-
erature, and to draw out their implications for both normative and positive analysis. We
use examples taken from ...