The difficult reception of law and economics in Germany

Abstract

The introduction of law and economics into the German legal order in the 1970s has met a mixed response from lawyers and economists. Scepticism toward this new economic approach to law may be seen as the main line in the theoretical discussion, brought forward mainly by legal scholars,’ whereas economists seemed to be more sympathetic toward the new approach.* Up to now the real impact on legislation and court decisions seems to be nearly negligible. The following analysis shall shed some light on the prospects of law and economics in Germany. At first, it seems necessary to look into the history of this movement in Germany,~ then to analyze the present situation, and eventually to make some predictions about further development. In order to be able to predict the future role of law and economics in Germany, it appears to be necessary to investigate the issue of why and how this approach has been relatively successful in the country where it originated-the United States of America-and whether from there the integration of law and economics into a different legal order meets specific obstacles, which might explain the present difficulties and possible future problems. This paper, which concentrates on a comparative analysis of certain traits of the American and the German legal system, is an analytical rather than an empirical investigation. But on the basis of that analysis, a prediction about the future success of law and economics in the German legal order is more than a mere extrapolation of the present trend and more than just a description of the deficiencies in accepting the new approach in Germany using a simple time-lag explanation.