{"id":27151,"date":"2017-01-09T13:45:38","date_gmt":"2017-01-09T13:45:38","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/lawandeconomics\/literature-reviews\/0315-law-and-economics-in-denmark-art.html"},"modified":"2017-01-09T13:45:38","modified_gmt":"2017-01-09T13:45:38","slug":"0315-law-and-economics-in-denmark-art","status":"publish","type":"law_economics","link":"https:\/\/reference.findlaw.com\/lawandeconomics\/literature-reviews\/0315-law-and-economics-in-denmark-art.html","title":{"rendered":"Encyclopedia of Law & Economics \u2013 0315 LAW AND ECONOMICS IN DENMARK"},"content":{"rendered":"

0315<\/strong><\/p>\n

LAW AND ECONOMICS IN DENMARK<\/strong><\/p>\n

Henrik Lando
Associate Professor of Law and Economics at Copenhagen Business School<\/em>
\u00a9 Copyright 1997 Henrik Lando<\/p>\n

Contents<\/strong><\/p>\n

Abstract<\/a><\/p>\n

1. Ussing’s Early Contribution<\/a><\/p>\n

2. More Recent Contributions<\/a><\/p>\n

3. Present Research<\/a><\/p>\n

4. Courses in Law and Economics<\/a><\/p>\n

5. The Ph. Ds<\/a><\/p>\n

6. Conclusion<\/a><\/p>\n

Bibliography on Law and Economics in Denmark (0315)<\/a><\/p>\n

Abstract<\/a><\/strong><\/p>\n

Law and economics is a small but growing area of research and teaching inDenmark.<\/p>\n

Economic reasoning applied to especially tort law has a long precedent inDenmark, but often meets with opposition. At the universities, only littleresearch in law and economics is done within the law faculties and there is nochair in law and economics. At the business schools the interest among legalscholars seems greater, as is manifested by the establishment of a law andeconomics programme at some of the major business schools. Economists showan increasing interest in law, and this is largely due to developments within thetheory of industrial organization, mechanism design \/ contract theory, andinstitutional economics.<\/p>\n

JEL classification<\/em>: K 00<\/em><\/p>\n

Keywords<\/em>: Law and Economics, Research, Teaching<\/p>\n

1. Ussing’s Early Contribution<\/a><\/strong><\/p>\n

Around 1900, there was a wave of interest in law-and-economics reasoningamong Scandinavian tort scholars. The inspiration was a book bylawyer-economist Victor Mataja (a student of Menger) who advocated strictliability on the basis of the principle of internalization. The wave may be said tohave culminated in the doctoral dissertation of the Danish jurist Henry Ussingin 1914. He analyzed the question of strict liability vs. negligence in tort lawagainst the background of neoclassical economic principles. Ussing advocatedstrict liability for \u00b4extraordinary acts which involve unusual danger\u00b4.<\/p>\n

Much of his reasoning was couched in today’s modern terms of prevention,risk-allocation and administration costs. His arguments are modern. For example,with respect to prevention he mentioned as an argument for strict liability theproblem of \u00b4non-observability\u00b4 (though he does not use this term), i.e. thedifficulty for the judge of knowing the particulars of a case, which means thatnot all \u00b4truly sensible precautions\u00b4 will be made under the negligence rule. Healso mentioned that strict liability may induce more innovation in safety.Ussing’s main argument for restricting the scope of limited liability toextraordinary acts, concerned the administrative costs of insurance , including’not only the expense of enforcing claims but also of administration expenses inthe widest sense\u00b4.<\/p>\n

In conclusion, Ussing’s analysis is an early example of the application ofeconomic principles to tort law.<\/p>\n

However, Ussing’s (and Mataja’s) analysis was met with scepticism by mostDanish jurists. Even today, most leading Danish tort-scholars seem sceptical ofthe law and economics approach. For example, in the leading text-book on tortlaw (Von Eyben et al: \u00b4L\u00e6rebog i erstatningsret\u00b4, 3. Udgave, p. 35<\/a>) one reads:<\/p>\n

..\u00b4this theory -like all other prevention theories- in the end rest on aspeculative foundation\u00b4.<\/p>\n

2. More Recent Contributions<\/a><\/strong><\/p>\n

Since Ussing’s doctoral dissertation in 1914, three doctoral law-theses (to bedistinguished from Ph.D dissertations, the doctorate thesis is usually larger thana Ph.D) and one Ph.D thesis have combined law and economics.<\/p>\n

Bo Von Eyben, in `Kompensation for personskade` (\u00b4Compensation forPersonal Injury\u00b4 (1983)<\/a>) discussed the economic approach to tort law at somelength, including references to the works of Ussing, Calabresi and Posner. Asin the text-book mentioned above, the author was sceptical of the value of theeconomic approach.<\/p>\n

Jens Fej\u00f8’s<\/a> dissertation (1984) in English translation (1990) was entitled‘Monopoly Law and the Market- studies of EC competition law with USAmerican Antitrust Law as a frame of reference and supported by basic marketeconomics\u00b4<\/a>. He compared American competition policy with the EuropeanCommon Market’s (in particular with respect to the use of \u00b4per-se\u00b4 prohibitionsversus \u00b4the rule of reason\u00b4) and made extensive reference to economic theory inhis attempt to derive prescriptions.<\/p>\n

Jan-Schans-Christensen\u00b4s doctoral dissertation from 1991, \u00b4ContestedTake-overs in Danish Law – A Comparative Analysis based on a Law andEconomic Approach\u00b4<\/a> discussed the need for legal reform in Denmark to facilitatecontested take-overs.<\/p>\n

Thomas Riis\u00b4s Ph.D thesis \u00b4Ophavsret og Rets\u00f8konomi\u00b4 (IntellectualProperty and Law and Economics) (1996)<\/a> deals, within an economic model, withthe optimal law of copyrights. His thesis is the first to be written by acand.merc.jur which combines law and economics.<\/p>\n

The history of Danish economists’ contributions to law and economics isdifficult to write. Naturally, many economists have been active in designing lawsand regulations, as members for example of expert committees. However, we willrefrain from delving into how economic thought on law has developed \u00b4inpractice\u00b4, so to speak. Basic economic research in law seems a recentphenomenon in Denmark.<\/p>\n

3. Present Research<\/a><\/strong><\/p>\n

As in other countries, both law scholars and economists show an increasedinterest in law and economics. Law scholars are doing work on the law andeconomics of intellectual property, contract law, company law and competitionlaw. Among economists, work is done in competition law, property rights, tortlaw, tax law, environmental law, and company law. However, the total number ofresearchers in these fields amounts to a handful of law scholars and perhaps afew more economists. There is at present no research in such areas as theeconomics of litigation, criminal law, or family law. Law faculties of universitieshave no chair in law and economic and it is not part of their research agenda.<\/p>\n

Two positive developments are worth mentioning. First, an increasingnumber of economists work on subjects which have a clear connection to law.Industrial organization, the theory of contracts and the theory of mechanismdesign (institutional design) have, as in other countries, become new major fieldsof study. This has already spilled over into law-and-economics research. A feweconomists with a background in industrial organization and contract theory areat present applying formal economic modelling to competition law, tort law andenvironmental law. This is a new development. Second, it is widely recognizedthat more research needs to be done in this area. At present, there are goodincentives for going into this area of research both, it seems, in terms of futurefaculty positions, and in terms of the funding available from different sources.<\/p>\n

On the negative side, development of the field seems hampered bymisconceptions and misunderstandings between jurists and economists.Communication difficulties certainly exist between the two paradigms, as in othercountries.<\/p>\n

4. Courses in Law and Economics<\/a><\/strong><\/p>\n

The teaching of law-and-economics has mainly expanded at the Business Schoolof Copenhagen, the Business School of Aarhus and at \u00c5lborg University. In themiddle of the 1980s, the three institutions began a law and economicsprogramme, consisting of a three-year undergraduate study and 2\u00bd years ofgraduate studies.<\/p>\n

This is perhaps the main positive development within law and economics andit is hence worth giving some details about the study.<\/p>\n

At the Copenhagen Business School, 588 students are at present enrolled aslaw-and economics students (373 undergraduate and 215 graduate students), in\u00c5rhus the number is 251 (177 undergraduate and 74 graduate students), and in\u00c5lborg University the number is approximately 250.<\/p>\n

At the Copenhagen Business School the total number of students who havefinished their graduate studies from the beginning to the present is 163, in \u00c5rhusit is 124 and in \u00c5lborg it is approximately 160.<\/p>\n

The programme enjoys a good reputation and candidates have in general hadno problems finding jobs in the private or public sector. However, it is fair to saythat the students are given more training in law and legal method than ineconomics. In particular, economic modelling is given very little attention .<\/p>\n

Some of the graduate courses are taught jointly by a law scholar and aneconomist, e.g. Tort and Insurance Law<\/em> and Competition Law<\/em>, at theCopenhagen Business School .<\/p>\n

Outside the business schools little is happening in terms of incorporating lawand economics into education, though there are signs of an increasing interest.At the law faculty of Copenhagen University, a course in law and economicswas established last year, but so far with only a low attendance. In Aarhus (thesecond largest city), a similar course was begun some years ago but it has beenabandoned since.<\/p>\n

Students of economics are rarely taught law, with the exception of a coursein business law at the undergraduate level at the Business schools. Economicstudents may, however, obtain credit during their graduate studies for followingcourses at the law faculty. In general, however, economists’ knowledge of lawis very limited at the time they finish their education. Formerly, law was afirst-year mandatory course, but this is no longer so.<\/p>\n

Law students are generally taught a first-year course of elementaryeconomics (even though it looks like this course may be cancelled soon atAarhus University).<\/p>\n

5. The Ph. Ds<\/a><\/strong><\/p>\n

It is worth paying attention to the number of Ph.D students which the subjectattracts, since this number (and the quality of the students in combination withthe quality of the Ph.D education) is likely to be important for the future of lawand economics in Denmark, even though it must be remembered that some of thebest students study abroad. One can hope, and it seems likely, that the latter willbe of importance in importing law and economics into Denmark.<\/p>\n

The number of Ph.Ds working in the field of law and economics is expanding.As a result of the establishment of the law and economics line of educationmentioned above, this is particularly the case in the Business schools. A handfulof graduates with a law and economics degree are presently writing Ph.Ds, mostof them at business schools. Only a couple of these Ph.Ds, however, combinelaw and economics in their research, while the rest have mainly specialized inlaw. At the law faculties of universities, there is at present only one Ph.D studentin the field of law and economics (at Copenhagen University, in contract law).<\/p>\n

6. Conclusion<\/a><\/strong><\/p>\n

Law and economics, i.e. the application of economic theory to the field of law,is a growing area of research and teaching in Denmark. However, the area is atpresent small, even in relation to the size of the country.<\/p>\n

The following features stand out: economic reasoning applied to law has along history in Denmark, but has often met with opposition. At the universities,only little research in law and economics is done within the law faculties. At thebusiness schools, the interest among legal scholars seems greater, as ismanifested by the establishment of a law and economics programme at some ofthe major business schools.<\/p>\n

Bibliography on Law and Economics in Denmark (0315)<\/a><\/strong><\/p>\n

Alb\u00e6k, Svend, Molgaard, H. Peter and Baltzer Overgaard, Per (1995)<\/a>, ‘DanskKonkurrenceret og Vertikal Kontrol (Danish Competition Law and Vertical Control)’,133<\/strong> Nationaltokonomisk Tidsskrift<\/em>, 268-283.<\/p>\n

Andersen, Peder & Jensen, Vibeke & Birk Mortensen, J\u00f8rgen (eds.)<\/a> (1993), Governance byLegal and Economic Measures<\/em>, Copenhagen, Gad.<\/p>\n

Blegvad, Britt-Mari and Collin, Finn (eds.)<\/a> (1987), ‘Virksomheden mellem \u00d8konomi og jura(The Firm between Law and Economics)’, in Samfundslitteratur 1987<\/em>.<\/p>\n

Christensen, J. S. (1991)<\/a>, \u00b4Contested Take-overs in Danish Law – A Comparative Analysisbased on a Law and Economic Approach\u00b4 discussed the need for legal reform in Denmarkto facilitate contested take-overs, Gad, K\u00a2benham.<\/p>\n

Collin, Finn (1987)<\/a>, ‘Integration af Juridiske og \u00d8konomiske Beslutningsmodeller(Integration of Legal and Economic Decisionmodels)’, in Blegvad, Britt-Mari & Collin,Finn (eds.), Virksomheden mellem \u00a2konomi og jura<\/em>.<\/p>\n

Daintith, Terence C. (1987)<\/a>, ‘Oprettelse og anvendelse af langfristede kontrakter (TheCreation and Use of Longterm Contracts)’, in Blegvad, Britt-Mari & Collin, Finn (eds.),Virksomheden mellem \u00a2konomi og jura<\/em>.<\/p>\n

Davis, Jerome, Breinholt Larsen, Finn and Pagh Nielsen, Karen Marie (1984)<\/a>, OffentligStyring af Olie-gas Aktiviteter i Gr\u00f8nland<\/em> (Public Regulation of Oil and Gas Activitiesin Greenland), Aarhus University Press.<\/p>\n

Davis, Lee N. (1989)<\/a>, ‘Skydd for Innovationer (Protecting Innovations)’, in Bjurggren,Per-Olof and Skogh, G\u00f6ran, Foretaget – et Kontraksekonomisk Analys<\/em>, Stockholm, SNSforlag, 151-158.<\/p>\n

Davis, Lee N. (1991)<\/a>, ‘Patenter og innovationer: Mod et Strategisk Perspektiv. (Patentsand Innovations: Aiming for a Strategic Perspective’.<\/p>\n

Fej\u00f8, Jens (1994)<\/a>, Monopol-ret og Marked<\/em> (Monopoly Law and Market), K\u00f8benhavn, HHK.<\/p>\n

Jeppesen, Tim (1995)<\/a>, ‘Milj\u00f8politiske Muligheder i EF (Framing Environmental Policy inthe EC)’, Nordisk Administrativt Tidsskrift<\/em>.<\/p>\n

Krenchel, Jens Valdemar (1996)<\/a>, ‘Okonomisk ret – om den Rets\u00f8konomiske Analyse(Analysis of Law and Economics)’, 4<\/strong> Justitia<\/em>.<\/p>\n

Lando, Henrik (1996)<\/a>, ‘Hvorn\u00e5r b\u00f8r Objektivt ansvar G\u00e6lde? Det Rets\u00f8konomiske bud p\u00e5et s\u00e6t af Kriterier for Objketivt Ansvar (When Should Strict Liability Apply? TheLaw-and-Economics Answer)’, Under Review with Tidsskrift for Retsvidenskab<\/em>.<\/p>\n

Lando, Henrik (1996)<\/a>, ‘Tre Essays om Principper i Rrstatningsretten: Objektivt Ansvar,Culpa-ansvar og det Offentliges Erstatningsansvar (Three Essays on Tort Law: StrictLiability, Negligence and Liability of the Public Sector)’, Working Paper, Institute ofFinance <\/em>.<\/p>\n

Larsen, Anders and Olsen, Ole Jess (1995)<\/a>, ‘Konkurrence i Energisektoren og StatsligRegulering (Competition in the Energy-Sector and State Regulation)’, AKF rapport1995<\/em>.<\/p>\n

Molgaard, H. Peter, Baltzer Overgaard, Per and Ohlenschl\u00e6ger Madsen, Ole (1996)<\/a>, DenDanske Konkurrencelov i Moderne Industri\u00f8konomisk Belysning<\/em> (The Danish Law ofCompetition analysed in the Perspective of Modern Industrial Economics), AarhusUniversity Press.<\/p>\n

Moller, Michael (1996)<\/a>, ‘Inskydergarantifonden og Redning af KonkurstruedePengeinstitutter (Devising a System to Rescue Failing Banks)’, 5<\/strong> Finans\/Invest<\/em>.<\/p>\n

Moller, Michael and Nielsen, Niels Chr. (1993)<\/a>, ‘En \u00d8konomisk Analyse af K\u00f8benhavnsKommunes Hjemfaldspolitik (An Economic Analysis of Repurchase Declarations of theCopenhagen Community)’, 2<\/strong> Nationalokonomisk Tidsskrift<\/em>.<\/p>\n

Moller, Michael and Nielsen, Niels Chr. (1994)<\/a>, ‘Okonomers og Juristers Syn p\u00e5 arv(Economist’s and Lawyer’s View of Inheritance)’, in Lynge Andersen, Lennart andMogelvang-Hansen, Peter (eds.), G.E.C Gad.<\/p>\n

Mortensen, Jorgen Birk and Olsen, Ole Jess (1991)<\/a>, ‘Privatisering og Deregulering(Privatisation and Deregulation)’, Jurist- og \u00d8konomforbundets Forlag, 1993<\/em>.<\/p>\n

Nielsen, Niels Chr. (1987)<\/a>, ‘Okonomi, jura og Markedsmekanismer (Law, Economics and theMarket Mechanism)’, in Blegvad, Britt-Mari & Collin, Finn (eds.), Virksomheden mellem\u00d8konomi og jura<\/em>.<\/p>\n

Nielsen, Niels Chr. (1993)<\/a>, ‘Minoritetsaktion\u00e6rbeskyttelse – eller et Velfungerende Markedfor Virksomhedskontrol (Minority Protection or a Well-functioning Market forCorporate Control)’, Revision og Regnskabsv\u00e6sen<\/em>.<\/p>\n

Nielsen, Niels Chr. and Ebbesen, Jan (1993)<\/a>, ‘Stemmelofter – En \u00d8konomisk Analyse af denRetlige Analyse (Restrictions on Voting Rights, An Economic Analysis of the LegalAnalysis)’, 6<\/strong> Juristen<\/em>, 251-264.<\/p>\n

Olsen, Ole Jess (1993)<\/a>, ‘Regulering af Offentlige Forsyningsvirksomheder i Danmark (TheRegulation of Public Utilities in Denmark)’, Jurist- og \u00d8konomforbundets Forlag<\/em>.<\/p>\n

Raaschou-Nielsen, Agnete (1988)<\/a>, (Institutional Change and Economic Theory),K\u00a2benhavn, Ph.D thesis, Det Statsvidenskablige Fagr\u00e5d.<\/p>\n

Riis, Thomas (1994)<\/a>, ‘Ophavsret og Kultur\u00f8konomi i EF (Copyright and The Economics ofCulture in EC)’, NIR<\/em>.<\/p>\n

Riis, Thomas (1996)<\/a>, Ophavsret og Rets\u00f8konomi<\/em>, Ph.D thesis.<\/p>\n

Riis, Thomas (1996)<\/a>, Copyright and Law and Economics<\/em>, Gadjura, Ph.D. thesis.<\/p>\n

Schledermann, Helmut (1987)<\/a>, Rets\u00f8konomi for Jurister<\/em> (Law and Economics for Jurists),Aarhus University Press.<\/p>\n

Svendsen, Gert Tinggaard (1993)<\/a>, ‘Fordele ved et Marked for CO2 -kvoter (Advantages inCO2 Emissions Trading)’, 7<\/strong> Samfunds\u00d8konomen<\/em>, 5-9.<\/p>\n

Svendsen, Gert Tinggaard (1994)<\/a>, ‘Globalt CO2 -marked’, 1<\/strong> Fremtidsorientering<\/em>, 35-36.<\/p>\n

Svendsen, Gert Tinggaard (1994)<\/a>, ‘Kvoter og Syreregn (Quotas and Acid Rain)’, 3<\/strong> Okonomi& Politik<\/em>, 33-39.<\/p>\n

Svendsen, Gert Tinggaard (1995)<\/a>, ‘Den Station\u00e6re Bandit – og Lobbyisme (The StationaryBandit and Lobbyism)’, 3<\/strong> Okonomi & Politik<\/em>, 24-31.<\/p>\n

Von Eyben et al. (1995), Laerebog i Erstatningsret, (Textbook in Tort Law)<\/em>, Jurist s\u00d8<\/em>konom\u00a2abindets Forlag, 1995, p. 35.<\/a><\/p>\n

Wegener, Morten (1996)<\/a>, Franchising i EU-Konkurrenceretten (Franchising in Perspectiveof the EU-Law of Competiton)<\/em>, Forthcoming report winter.<\/p>\n<\/p>\n

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