Wednesday, January 6, 2010

Ogus, Trebilcock, and the Place of Mathematics in Law & Economics Scholarship

The British Law & Economics scholar, Anthony Ogus, has place (here) on SSRN (the Social Science Research Network) a delightly little paper that is at once an encomium of the University of Toronto Law & Economics Scholar Michael Trebilcock and a modest defense of the role of non-formalized (that is, non-math-based) models in Law & Economics scholarship.

In the paper, Ogus usefully identifies three stages in the history of modern Law & Economics scholarship: (1) the "formative stage" in the 1960s, when scholars such as Ronald Coase, Guido Calabresi, Gary Becker and Henry Manne published fundamental insights about relations between law and economics; (2) the "consolidation and systematization stage" during which authors such as Richard Posner and Steven Shavell "applied legal reasoning to legal principles and institutions across the board"; and (3) the "scientific formalism" stage in which economists have "pushed the sub-discipline in the direction of abstraction and formal modelling." Ogus might also have added that the third stage (or maybe it's a fourth stage) is highly concerned with quantitative empirical analyses of legal rules in action, which is another formal discipline, albeit one distinct from mathematical modeling. Indeed, as Ogus notes, it has become nearly impossible to publish a paper in a leading Law & Economics journal these days without a formal model (or, he might have added, a regression analysis)

Despite the clear historical trend towards formalization of methods in Law & Economics scholarship, Ogus holds out hope (to his hypothetical graduate student "Discipulus") that continues to be a place for Law & Economics scholars who are not mathematically adept. With the stipulation that legal scholars who use economic analysis should possess "a sufficient understanding of mathematical reasoning in order to read and assimilate the literature," Ogus notes that "there is an important role for exposition and the analysis which does not involve formal modeling," including areas where Law & Economics scholars have yet to make fundamental insights, such as the effect of market behavior on legal rules and rulings. Moreover, formal models can tell us little about the fair or just outcomes with which the law and lawyers are very concerned.

In short, Ogus usefully reminds us - with citations to various works by Trebilcock - of ways in which the continued vitality of Law & Economics scholarship depends on non-math-based analysis.

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