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Boettke, Peter J.; Zywicki, Todd J. --- "Law and economics: the contributions of the Austrian School of Economics" [2017] ELECD 1567; in Zywicki, J. Todd; Boettke, J. Peter (eds), "Research Handbook on Austrian Law and Economics" (Edward Elgar Publishing, 2017) 3

Book Title: Research Handbook on Austrian Law and Economics

Editor(s): Zywicki, J. Todd; Boettke, J. Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849801133

Section: Chapter 1

Section Title: Law and economics: the contributions of the Austrian School of Economics

Author(s): Boettke, Peter J.; Zywicki, Todd J.

Number of pages: 24

Abstract/Description:

The Austrian contribution to the development of law and economics is the study of endogenous rule formation, or the spontaneous evolution of social institutions, which can be traced to the founder of the Austrian School, Carl Menger. While Menger’s emphasis on spontaneous institutional analysis was born out of the Methodenstreit, a methodological battle engaged against the German Historical School, this chapter argues that the Austrian contribution to law and economics emerged directly from the socialist calculation debate against market socialism. This debate, we will argue, played an essential role in the re-discovery of the institutional framework in economics during the post-WWII era, particularly in the development of law and economics. In the aftermath of the socialist calculation debate, Menger’s earlier emphasis on institutional analysis was reemphasized by F.A. Hayek, who in turn influenced the early pioneers of law and economics, particularly Aaron Director, Ronald Coase, and Bruno Leoni.