Functional Law: Interconnection of Law and Economics

Functional Law

Functional law is a multi-faceted concept that intertwines law and economics, with roots in the law-and-economics movement. The movement began in the early 1960s, with pioneering work by scholars such as Ronald Coase and Guido Calabresi. It was not until the mid-20th century that the links between law and economics became an object of serious academic pursuit.

Law and Economics

Law and economics is a field of study that applies economic principles to legal issues to understand the functioning of legal systems. It focuses on the economic structure of laws and their impact on economic systems. Early studies in this field appraised the effects of legal rules on the normal functioning of the economic system.

Functional Law and Economics

Functional law and economics is a subfield of law and economics that aims to bridge the gap between the positive and normative schools of thought in law and economics. It focuses on the design of legal institutions and their effects on economic and social behavior. This approach captures both the efficiency and non-efficiency perspectives of the other two schools.

The Role of Public Choice Theory

Public choice theory, and especially constitutional political economy, provide strong methodological foundations for the functional school of law and economics. This approach supports much of the traditional wisdom but also poses challenges to neoclassical law and economics.

Functional Law and Large Numbers

Functional law is also used in the context of mathematical modeling, such as in the field of stochastic processes for epidemic models. Here, functional law of large numbers (FLLN) is applied to establish the limits of these processes, providing a theoretical framework for understanding the behavior of complex systems.

Environmental Law as Functional Law

Environmental law is an example of functional law. It is a field of law that contains the provisions of state administrative law and is concerned with protecting the environment. The "substantive rights for environmental quality" aspect of environmental law falls under the umbrella of functional law.

Functional Law and CAD Programs

Functional law is also applied in the development of Computer Aided Drawing (CAD) programs. For example, an involute profile of a gear tooth can be generated using functional law.

The Impact of Functional Law

The impact of functional law and economics has exceeded its planned ambitions, transforming traditional legal methodology by treating legal rules as a working system. Economics provides the analytical rigor necessary for understanding the legal system and its effects on society.