Wednesday, August 12, 2020
Reuven S. Avi-Yonah (Michigan), Do Lawyers Need Economists?:
Katja Langenbucher’s outstanding book [Economic Transplants: On Lawmaking for Corporations and Capital Markets (Cambridge University Press 2017)] seeks to address the question of why and in what ways have lawyers been importing economic theories into a legal environment, and how has this shaped scholarly research, judicial and legislative work? Since the financial crisis, corporate or capital markets law has been the focus of attention by academia and media. Formal modelling has been used to describe how capital markets work and, later, has been criticized for its abstract assumptions. Empirical legal studies and regulatory impact assessments offered different ways forward. This excellent book presents a new approach to the risks and benefits of interdisciplinary policy work. The benefits economic theory brings for reliable and tested lawmaking are contrasted with important challenges including the significant differences of research methodology, leading to misunderstandings and problems of efficient implementation of economic theory's findings into the legal world. Katja Langenbucher's innovative research scrutinizes the potential of economic theory to European legislators faced with a lack of democratic accountability.
I would like to address the question whether economic theory and modeling are useful for lawyers by focusing on another field, tax law, where economists have been very influential.
Many US law schools now have economists with no law degree teaching tax law, and several of the leading younger tax law professors at top schools have economics PhDs as well as JDs.