Introduction Making sense of the state: a political economy approach

Abstract

Even if mainly devoted to private law, the law and economics literature has certainly not neglected constitutional issues. In particular, the intricate relation between law and the state has been frequently analysed, either from a positive point of view or for normative purposes. Thus, vexed questions were raised as to the necessity to ground the legitimacy of the state on rules of law or, reciprocally, as to the need to justify law in the state. To provide tentative and partial answers to these questions, the different chapters that constitute this book employ the specific tools of a political economy approach. These will of course relate to the standard programme of constrained maximization, but in which ‘institutions matter’. The first step is then the objective function. When organizing the seminars leading to this book, we manifestly did not have to be specific about an attachment to a democratic state as an objective. Strikingly, the contributors dealing with this foundational concern (how to shape a democratic state) all focused on the constraint which delineates the democratic state, namely the informational constraint. Publicity of law and of decisions, transmission, manipulation and creation of information are some of the many facets that contribute to the delicate balance between democracy as freedom and democracy as order (Part I). In this respect, law and lawfulness prove to be media as strong as they are to be handled carefully. Indeed, legal rules play a similar role as information, being in the same way the key to the foundation of a democratic state. However, the role of law and the institutional position of judges, crucially depend on how the democratic state is organized. In other words, the way democracy is defined influences the role that legal rules play (or have to play). All the contributions of the book that are dedicated to this question converge towards this necessary condition (Part II). Building on these pillars, the state can then make incursions into the markets. The control over the institutions governing competition requires a fine tuning of legal regulations. Public policies are to be interpreted here in the light of the first two