Behavioral Law and Economics as a Method of International Law

Abstract

The effort to answer questions concerning whether international law relevantly reflects the reality of international community, especially in terms of the explanatory capability, goes hand in hand with the study on the methodologies of international law. Twenty years ago, the interesting opportunity was given to seven methodologies of international law to express their respective strengths and weaknesses to handle with a given same international law questions. Positivism, policy-oriented jurisprudence, critical legal studies were invited at the feast of international law methodologies. Surprisingly, law and economics was also invited to it. Despite of its strength to explain cause and effect of international actors’ behavior through empirical approach, law and economics is not fully welcomed by international law scholars because its approach does not seem to pay due attention to the normative aspect of international law. Contrast with the passive reception of law and economics approach in the field of international law, law and economics is actively employed to improve effectiveness and efficiency of legal norms and institutions in the area of domestic law including contract law, criminal law and litigation procedure. Shared with the fundamental assumptions of neo-classical economics, law and economics explores effectiveness and efficiency of legal norms and institutions through the lens of the perfect rationality. Put it differently, law and economics usually begins its analysis on assumptions that Homo economicus has the perfect rationality which enables Homo economicus to make a rational choice at any circumstance. However, empirical and psychological experiments give much reason to doubt over assumptions of law and economics: Homo economicus is undoubtedly subject to the bounded rationality rather than the perfect rationality. With the help of cognitive psychology, behavioral law and economics based on behavioral economics fiercely challenges the unreality of law and economics. The core concepts including heuristics, framing effect, loss aversion and status quo bias are used as the powerful weapons by behavioral law and economics to expose the bounded rationality embodied in Homo economicus. As yet, international law does not appear to take behavioral law and economics seriously as a method of international law. There are lots of reasons to explain this phenomenon. Generally, the reluctance of international law scholars to apply economic analysis to international law can be suggested as the main reason. International law scholars criticize law and economics as an empty method because it does not focus on the normative nature of international law. In this sense, behavioral law and economics, which is harshly criticized by neo-classical economics, seems to have a hard time to occupy the right place in the international law methodologies. But this should not be the end of story. The main purpose of this article is to explore the usefulness of behavioral law and economics as a method of international law. Despite of its above mentioned weaknesses, advantages of behavioral law and economics clearly exist in the field of studies concerning how to design treaty text for the purpose of effective compliance, and to create a new international institutions’ mechanism to assist the cooperation of states regardless of their respective interests. Moreover, behavioral law and economics makes a bold attempt to redirect the path towards the studies of international law methodologies which is overwhelmingly dominated by the mainstream international law methodologies. In other words, behavioral law and economics discloses the hidden reason why international law scholars ardently sticks to the mainstream international law methodologies, especially positivism, despite of its incapability to address international law problems effectively. Behavioral law and economics can serve as a visible, enriching alternative and complement