Law and economics is an approach that has gained increasing prominence in the US over the last few decades in almost all areas of law—private, public and international. It is defined by its distinct methodology, and methodological commitments, rather than any particular subject matter. Growing out of the legal realist tradition, it aims to understand law and legal institutions by asking to what extent they reflect the choices of rational, self-interested actors, or economically efficient choices or outcomes. Where they do not, it asks how laws can be made more efficient, or welfare maximizing. In more recent years, the field has also increasingly incorporated tools from labour economics to identify the empirical effects, and determinants, of various legal rules and institutions; and sought to incorporate the insights of information and behavioural economics on the limits of neo-classical economic models.

It is now almost unthinkable for a major US law school not to offer courses in law and economics, and most US law firms now expect law graduates to be familiar with basic law and economics ideas. To date, however, law and economics is a field that has received relatively little coverage in core LLB and JD courses in Australia.

This course attempts to fill this gap, and equip students for global legal practice, by providing an introduction to the economic analysis of law. It covers a range of topics in public, private and international law, and shows how economic insights can alter how we understand basic legal doctrines in each of these areas.

Topics covered include contract law and contractual remedies, environmental law, surrogacy and discrimination law, indigenous rights and international rights to “cultural property”; and key concepts include concepts from economics such as notions of pareto-efficiency, efficient risk- taking, behavioural biases, moral hazard, asymmetric information, externalities, public choice or interest group theory, social choice theory, game theory, and empirical research methods.

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1. Private Law and the relevance of:
• Economic Concepts of Efficiency
• Theories of Optimal Risk-taking
• Behavioural Economics
• Moral Hazard & Asymmetric Information
• Economic “Externalities”

2. Public Law or Statutory Interpretation and the relevance of:
• Public Choice or Interest Group Theorise
• Social Choice theory

3. International Law and the relevance of
• Basic game-theoretic concepts

4. Judicial Behavior and Empirical legal methods

5. Economic theories of judicial behaviour

6. Empirical findings on judicial behavior

7. Empirical analysis of law: methods and applications

• All Materials for the course will be available on Moodle

Refer to the course outline which will be provided by the lecturer at the beginning of the relevant semester.