Volume 12, Issue 3 - Economic Transplants on Law-making: Implications for Company and Financial Law

Buzzwords such as “economization”, Çalışkan and Callon (2009) 369. “economic imperialism” Lazear (1999). or “the economist’s hour” Appelbaum (2019). denote the fact that during the last century “economics has become the science of making social choices”. Fourcade (2018) 1. In “ economic transplants ”, Langenbucher (2017) (where the following footnotes list only pages, they reference this book). I explore how this has happened in European corporate and financial markets law. The book’s focus is on legal reasoning, involving both a hypothesis about where economics’ tempting allure may come from, and an argument on why the underlying disciplinary approaches of law and of economics often don’t necessarily match.

Katja Langenbucher’s outstanding book seeks to address the question of why and in what ways have lawyers been importing economic theories into a legal environment, and how has this shaped scholarly research, judicial and legislative work? Since the financial crisis, corporate or capital markets law has been the focus of attention by academia and media. Formal modelling has been used to describe how capital markets work and, later, has been criticized for its abstract assumptions. Empirical legal studies and regulatory impact assessments offered different ways forward. This excellent book presents a new approach to the risks and benefits of interdisciplinary policy work. The benefits economic theory brings for reliable and tested lawmaking are contrasted with important challenges including the significant differences of research methodology, leading to misunderstandings and problems of efficient implementation of economic theory’s findings into the legal world. Katja Langenbucher’s innovative research scrutinizes the potential of economic theory to European legislators faced with a lack of democratic accountability.