Encyclopedia of Law & Economics - 0325 LAW AND ECONOMICS IN FRANCE

0325

LAW AND ECONOMICS IN FRANCE

Lionel Montagné

Assistant in Civil Law

Université de Montpellier - Faculty of Law

© Copyright 1998 Lionel Montagné

Contents

Abstract  
1. Introduction  
A. Economic Analysis of Law: a Challenge Launched to the French Jurist  
2. The Economist and the Law  
3. The Jurist and the Economy  
B. Economic Analysis of Law: a Challenge Ignored by the French Jurist  
4. The Subjective Obstacles to the Development of the Economic Analysis of Law  
5. The Objective Obstacles to the Development of the Economic Analysis of Law  
C. Conclusion  
 
Acknowledgements  
Bibliography on Law and Economics in France (0325)  
Other References  



Abstract  

If economic reasoning applied to Law is sometimes used by economists, in France the majority of jurists have some difficulties to accept this tools as a complementary reasoning to legal thought. So, there is no chair in Law and Economics in our French University of law, even if an effort seems to be made by Universities of Law in Montpellier, which includes in his training intended for postgraduates students in Law some lectures in Law and Economics. But, in spite of that, prejudices and lack of knowledge of Law and Economics, that jurists have, slow down the process of development of this matter.

JEL classification: A12, K00

Keywords: France

1. Introduction  

If the economic analysis of law has been developed in most common law countries, well as in countries such as Germany or Sweden on the European continent, it must be noted that in France, this tool is still underestimated by lawyers. Initially put forward by economists (A) the economic approach to law did not have the success hoped for. As the matter of fact, we just have to look at the number of works published in this field, to see that the challenge set has been ignored by the legal community (B).


A. Economic Analysis of Law: a Challenge Launched to the French Jurist  

The economic analysis of law aims at a better understanding of the logic of legal rules and judicial decisions. It is supposed to enlighten the jurist, whatever his or her discipline, as to the construction and the finality of the law. However, in France this tool was developed by economists not by jurist (2), and the legal community did not examine the assets of such an instrument until some time later. In studying questions traditionally dealt with by lawyers, economists raised a real challenge that was taken up only in the last few years by certain authors from Montpellier and Aix-en-Provence (3). Despite those efforts the majority of the legal profession seems to remain today insensible to this tool.

2. The Economist and the Law  

Economics is defined by Lionel Robbins as Ç the science which studies human behavior as the relationships between ends and means È. Therefore, it is evident that the rules of law, in so far as they organize the means in a world of scarcity and uncertainty, will sooner or later, also become the object of study by economists in France. As elsewhere this is precisely what happened, and in that process important notions, such as the notion of transaction costs, were established that shed light on legal doctrines. Different fields, until now private domain of jurists, have come under the scrutiny of the economic community. Hence the development of an economic approach of property rights ( Lepage, 1984 ), contract law or matrimonial law ( Lemennicier, 1991 ). Nonetheless, this was not enough to stimulate the curiosity of the French legal community, at least not until 1986 when a symposium was organized on the economic analysis of law at Aix-en-Provence ? For the first time, appeared a degree of enthusiasm for applying economic reasoning to law.

Indeed, Professor Savatier in his lesson on the theory of liabilities in economic private law ( Savatier 1974 ) had already underlined the utility and the efficiency of economic tools in the development of legal reasoning. Professor Mouly, also, was convinced, especially following the 1986 conference, that a reflection on the mutual contributions of economy and law was both necessary and beneficial ( Mouly 1987, p. 413 ). But, in spite of this, and contrary to what was happening in other European countries, Law and Economics was still not taken up in France. If economists show a continued interest in this subject, very few legal authors refer directly to this instrument, even if incontestably they sometimes use a Posnerian approach to law in their writings (see Mousseron, 1987 ). Among the few exceptions, mention should be made of authors, such as C. Mouly ( Mouly 1995, p. 377 ), C. Atias ( Atias 1987, p. 477 ) or J-Y Chérot ( Chérot 1987a, p. 443 ) occasionally use this tool. But no work, has to this day, been written by a jurist in this domain. The only existing work remains that of B. Lemennicier ( Lemennicier 1991 ), Professor of economics.

3. The Jurist and the Economy  

In the early nineties one began to see, from various legal authors, an implicit recognition of the utility of the economic analysis of the law as a complementary reasoning to legal thought, on the same level as sociology or morality. Hence in the last edition of his civil law treaty, J. Ghestin ( Ghestin 1994, p. 84-85 ) dedicates some pages to Law and Economics in order to better situate the position of civil law among legal disciplines. M. Fabre-magnan, in her thesis ( Fabre-Magnan 1990, p. 50-117 ) on the obligation of information in contracts, suggests an economic analysis of this obligation after having explained the basics of the economic analysis of law. Also , R. Cabrillac ( Cabrillac 1995, p. 23 ) in his general introduction of Law, resume in few lines the tree functions (normative, predictive, and critique) of Economic analysis of Law. Finally, on the initiative of economists in Aix-en-Provence, " Le journal des économistes et des études humaines " was founded, with and this deserve to be noted some professors of Law in its scientific committee.

In 1994 an important event occurred that led us to believe that the challenge set to the legal community more than thirty years ago was finally accepted. Indeed, while the Economic analysis of Law was not taught in any of the French Universities of law (excepted, perhaps, the "DEA Analyse économique des institutions", which however depends of the University of Economics and is intended for students in economics), Professor C. Mouly started to initiate his postgraduate students to the utilization of economic tools in legal reasoning, and in the same time took part in the third-term university Erasmus (called now : Socrates) Program in Law and Economics. The department of the economic theory of law at the university of law in Montpellier, of which he was the creator and the director, became the privileged meeting place for economists and jurists whose common researches on the economic approach to contract law and property rights, augured a much awaited success. Unfortunately, two years later, Professor Mouly's tragic and premature demise was to slow down the process of development of Law and Economics in the French legal culture.


B. Economic Analysis of Law: a Challenge Ignored by the French Jurist  

The study of legal questions often requires the use of different elements taken from sociology, history or logical analysis. The jurist uses these for the same reason that he/she refers to legal linguistics or philosophy of law. But curiously enough, the utilization of the economic approach to law is neglected. Some authors assign this marginalization to the absence of publications in French (see Mackaay 1987a ), but this imbalance, we believe, is also, and firstly, due to a bias jurists have against economics (4) and in the particular choice of economic instruments made by the advocate of an Economic analysis of Law (5).

4. The Subjective Obstacles to the Development of the Economic Analysis of Law  

The intuitive perception of what is economics, acquired through the multitude of economic acts that they accomplish ordinary and every day, leads most jurists to believe, that they have enough knowledge of economics to fulfill there task. For others, the economic analysis of law is too narrow in its approach, and so must be excluded from legal discussions.

Such attitudes are easily explained. First, due to the separation of the legal and economic disciplines in our academic system; jurist have little knowledge of economic analytical tools. Today, a law student does not receive the basic economic training that he had in the past. Also, the internal division within the legal discipline increases the effect of a separation between law and economics. Thus, the only jurists who use economics are those who follow a training in patrimonial law or in antitrust law.

Secondly, the jurist dislikes in modern economics what he perceives as an utilitarian approach. Convinced that economists are motivated only by the study of efficiency, he quickly turns away from their works. This belief is also reinforced by the use of mathematical or rationalistic language in economics, and tools that from the point of view of most jurists are incompatible with social studies. Not having completely mastered the tools of law and economics, legal authors therefore prefer to ignore this challenge.

Finally, due to insufficient knowledge of the field and his a priori judgment, the jurist was not in a position to appreciate the latest evolution in economics. Hence, he is unable to notice the new conceptions, like Austrian School, according to which, for example, the criteria of efficiency used in Law and Economics must not be static but should be dynamic ( Centi, 1987 ). So, according to this new view, one cannot appreciate the quality of legal rules only through its capacity to organize the efficient management of the scarcity. One must also to verify whether our legal system adjusts appropriately to change in our environment. Through its recent development the economic analysis of law could thus oblige the jurist to question the foundations of institutions, instead of dogmatically affirming solutions directly translated from Latin adages which are sometimes obsolete.

5. The Objective Obstacles to the Development of the Economic Analysis of Law  

The idea of a commercial activity whose object would be the persons themselves provokes a strong hostility from classical jurists . There are border lines which should not be crossed, and a law regarding persons cannot be analyzed in the same way as law to be applied to ordinary assets. However, even if, for example, the prohibition to sell civil clienteles and ministerial offices is constantly affirmed, the jurisprudence did not hesitate to allow their indirect commercialization. Does not the patronymic name, which in France is imprescriptible and not transferable (inalienable), become itself the object of transactions which sanction this commercialization ? In view of this fact some economists proposed to submit the law of persons and the law of assets to the economic approach, without discrimination, with the risk of violating this summa divisio to which every French jurist is so attached. The American origin of the movement, as well as its slight respect for legal assumptions was, thus, the object of diatribes from the legal community. The economic approach was blamed for being an imperialistic tool like sociology under the influence of DURKHEIM. But if we look at today's economic analysis of law, this argument is no longer true; POSNER himself has moderated his positions (see Posner 1992, p. 25 ) and other movements have been born admitting that the economic analysis of the law is just a means among others to appreciate the quality of certain legal rules.

However, the neoclassic foundations on which the movement is founded further add to the reasons to ignore the economic analysis of the law. The rationality of the economic agent who is perfectly aware of prices, and operates calculated choices in order to maximize his pleasure at the least cost, is a disconcerting model for one who searches solutions in equity and not in utility. Homo economicus would not be the model of jurists who think the law and economics to be incompatible, and presume the collaboration between jurists and economists to be impossible through lack of a common language.

As Mackaay 1987a has written, the language represents a further obstacle to this collaboration. Indeed, depending on the disciplines words have different meanings. The "exchange", for example, represents for economists the general act by which a person gives up a good against another good, whereas for the jurist it defines a very particular contract. Inversely, some equivalent notions are expressed using different words : depending on whether the contract allows to get rid of uncertainties or not, the economist will use the terms " complete" or "incomplete" contract where the jurist will use the terms "perfect" or "imperfect" contract . Finally, the legal vocabulary finds its origins in the Roman law whereas the economist uses a more recent terminology adapted to a present and evolutionary world.


C. Conclusion  

The lack of communication and the existence of prejudices are regrettable stumbling blocks to the development of the law and economics in France. In spite of the efforts of economists to propose a fruitful collaboration to the development of the field, only some jurists have responded. Others still prefer to ignore this tool and the situation will remain thus so long as the French Law Universities do not make an effort to demonstrate an interest in the use of this tool of analysis, a natural complement of the conventional training of a lawyer.

Acknowledgements  

Special thanks to Pr. Pierre Garello for his help and patience.

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Copyright 1996-98 Lionel Montagné