Eckardt, Martina --- "Legal Evolution between Stability and Change" [2011] ELECD 245; 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 9

Section Title: Legal Evolution between Stability and Change

Author(s): Eckardt, Martina

Number of pages: 24

Extract:

9. Legal evolution between stability and
change
Martina Eckardt

1. INTRODUCTION

Institutions can have a decisive impact on economic performance. The law is particularly
important in shaping the institutional framework for economic activities. Legal rules can
be viewed as socio-technological devices used to help individuals solve the coordination
problems and conflicts that arise in an environment of scarce resources.1 In such an envi-
ronment, the law affects both the allocation as well as the distribution of resources, and
is itself influenced and altered by economic evolution. However, our understanding of
the determinants and mechanisms of legal change from an economic perspective remains
rather weak.
The traditional neo-institutional economics and law and economics perspectives have
made a measured contribution to our theoretical and empirical understanding of legal
change.2 Yet these two perspectives are deeply rooted in neoclassical microeconomics,
and as such, they remain at their core concerned with the impact of given legal rules on
economic activities. To a large extent, this reflects the inherent static nature of neoclas-
sical microeconomics (stable preferences, rational choice behavior, and equilibrium),3
wherein the economic problem is reduced to optimization (i.e., choosing the best option
from a given set of alternatives). The decisive question of how the legal alternatives them-
selves are generated is thus not analysed and so novelty and change are assumed to be
exogenous.
Change, on the other hand, is the main starting point of the evolutionary economics
perspective. Calling into question the stable preferences on ...