The European Heritage in Economics and the Social Sciences
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1 The European Heritage in Economics and the Social Sciences Volume 18 Series editor Jürgen Georg Backhaus Krupp Chair in Public Finance and Fiscal Sociology University of Erfurt Erfurt, Germany
2 The European heritage in economics and the social sciences is largely locked in languages other than English. Witness such classics as Storch s Cours d Economie Politique, Wicksell s Finanztheoretische Untersuchungen and Geld, Zins und Güterpreise or Pareto s Trattato di Sociologia Generale. Since about 1937, partly caused by the forced exodus of many scholars from the German language countries and the international reactions to this event, English has become the undisputed primary language of economics and the social sciences. For about one generation, this language shift did not result in a loss of access to the European non-english sources. However, after foreign language requirements were dropped as entry pre-requisites for receiving the PhD at major research universities, the European heritage in economics and the social sciences has become largely inaccessible to the vast majority of practicing scholars. In this series, we hope to publish works that address this problem in a threefold manner. An aspect of the European heritage in a language other than English should be critically documented and discussed, reconstructed and assessed from a modern scientific point of view, and tested with respect to its relevance for contemporary economic, social, or political discourse. We welcome submissions that fit this bill in order to make the European heritage in economics and the social sciences available to the international research community of scholars in economics and the social sciences. More information about this series at
3 Alain Marciano Giovanni Battista Ramello Editors Law and Economics in Europe and the U.S. The Legacy of Juergen Backhaus 123
4 Editors Alain Marciano Université de Montpellier, LAMETA-CNRS Montpellier France Giovanni Battista Ramello Università del Piemonte Orientale Alessandria Italy ISSN ISSN (electronic) The European Heritage in Economics and the Social Sciences ISBN ISBN (ebook) DOI / Library of Congress Control Number: Springer International Publishing AG 2016 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
5 Contents The Law, The Economy, The Polity Jürgen Backhaus, A Thinker Outside the Box... 1 Jean-Michel Josselin, Alain Marciano and Giovanni Battista Ramello Economic Efficiency and the Law: Distinguishing Form from Substance Richard E. Wagner Bootleggers and Baptists in the Garden of Good and Evil: Understanding America s Entangled Economy Dima Yazji Shamoun and Bruce Yandle Hobbesian and Contractarian Constitutions Geoffrey Brennan and Giuseppe Eusepi Reforming the Fiscal Constitution: Holding Politicians Accountable Through Greater Transparency James W. Douglas, Ringa Raudla and Robert S. Kravchuk The Power of Free as a Catalyst for Political Revolution Dennis W.K. Khong and P.C. Lim Regulatory Networks, Legal Federalism, and Multi-level Regulatory Systems Wolfgang Kerber and Julia Wendel Two Treatments of Pluralism: Canada and the United States Margaret F. Brinig Marquis de Condorcet and the Two-dimensional Jury Model Manfred J. Holler Updating the Law and Economics of Legal Parochialism Nuno Garoupa v
6 vi Contents Procedure Peter Lewisch and Jeffrey Parker Misconceptions About Emissions Trading in Europe Edwin Woerdman and Andries Nentjes Erratum to: The Law, The Economy, The Polity Jürgen Backhaus, A Thinker Outside the Box... E1 Jean-Michel Josselin, Alain Marciano and Giovanni Battista Ramello
7 Introduction In July 2015, Jürgen Backhaus retired from his position as Professor at the University of Erfurt, after a long and rich career, started in 1970 at the University of Constance as an undergraduate student and that brought him all around the world. He was Professor of Public Finance at the University of Maastricht from 1986 to 2001 and, from 2001 to 2015, he held the Krupp Foundation Chair in Public Finance and Fiscal Sociology at the University of Erfurt. 1 Jürgen Backhaus published (and edited) tens of books and articles. He was, and still is, a scholar and a man of great immense culture. One of those rare scholars who is knowledgeable in so different fields that it is impossible to name all of them. But even within academia, Jürgen Backhaus is not only a scholar. He also played the role of a cultural entrepreneur. He launched, in 1994, the European Journal of Law and Economics, edited an important reference book, Elgar Companion of Law and Economics, and then had the idea of the Encyclopedia of Law and Economics that it is still an ongoing project involving a large number of contributors around the world, including ourselves as editors; he organized for decades one of the first and long-lasting European workshop in law and economics (first at the University of Maastricht and then at the University of Erfurt) and an interdisciplinary workshop in Heilbrönn. On the whole, he seemed to develop his scholarly activity as it were guided by the motto written by the Brazilian poet Vinicius De Moraes that said Life is the art of encounter. We had the chance to participate in many of those encounters organized by Jürgen, we developed there a significant part of our scholarship and lastly we had the honor, in our turn, of being part of it as editors of journal and the encyclopedia. Therefore, in addition to continuing the work and carry out the activities he created, we felt the need to pay him a tribute and to summarize what he did so far. Of course, this is a burden that can hardly be done by two sole individuals. Consequently, we had the chance to involve a number of well-known scholars that 1 For a broader overview see his CV at wissenschaft/mitarbeiter/backhauscvengllong-1.pdf. vii
8 viii Introduction in different ways have been connected to him. They enthusiastically accepted to contribute to this celebration. Hence, this book is thus the result of one other new encounter. The aim was not really to make an exhaustive presentation of the Backhaus s work, his contribution to law and economics or to characterize the field as it is nowadays, thanks to his contribution. We were rather interested in trying to evidence some crucial features of the law and economics movement. We believe that these features are also important to understand Jürgen Backhaus work and conception of law and economics. The first chapter of this volume (co-written with Jean-Michel Josselin) provides further evidence of that. In this introduction, we summarize the three most important points. The first important feature that characterizes law and economics, and that was too crucial for Jürgen Backhaus, relates to the European roots of law and economics. It is not simply to distinguish the European Journal of Law and Economics from a possible American counterpart nor to indicate the geographical location of its editors (him and Frank Stephen), that this name was chosen. Backhaus really believed that law and economics has a European legacy (see also Ramello 2016). More precisely, he believed that law and economics has a continental rather than Anglo-Saxon origins let us note here that he also believed that there exists a particularly important continental tradition in public finance that leads to the development of public choice (see Backhaus and Wagner 2005). Of course, Jürgen Backhaus did not ignore that law and economics and public choice also developed in the USA and in the rest of the world as well! in a sort of dialogue or with continuous and repeated interactions. This is precisely what this volume evidences. A second feature that fundamentally characterizes law and economics, and that also characterized Jürgen Backhaus view of the economy, is precisely the crucial role of institutions and the importance of the interconnection between law, institutions, and economy. All the chapters gathered in this volume illustrate, in one way or the other, that no economy functions in an institutional vacuum and that institutions matter, to put it differently. Up to the point that institutions do not have the same meaning or role in different places. There is a form of relativism in law and economics that implies that a legal rule, an institution that exists in one country or in one environment emerged for specific reasons and that, as a consequence, one cannot copy it, transplant it easily in another environment. It could be said that law and economics is comparative in essence. This is also what these chapters tell us: we need to compare institutions to understand them. This naturally and logically leads us to the third feature that characterizes this volume: the respective role of the market and the state. This is a vexed question, in particular in economics and in law and economics. If markets are efficient, then why should we need legal rules? And they are not, what kind of institutions do we need? The papers that are gathered in this volume all relate, in different ways, to these questions. They provide evidence that regulatory interventions of the state are far from costless but, on the other hand, that they are not useless. In particular, one aspect that is particularly important is the role of constitutions to ground and frame the economy.
9 Introduction ix All these aspects do not, however, cover all Jorgen Backhaus research. Again Jürgen Backhaus is interested and knowledgeable in so many subjects and areas that it would be impossible to present all what he did. Alain Marciano Giovanni Battista Ramello References Backhaus, Juergen, and Richard E. Wagner From Continental public finance to public choice: mapping continuity. History of Political Economy, 37 (Annual Supplement): Ramello, Giovanni B The past, present and future of comparative law an economic, In Comparative Law and Economics, Eisenberg T. and Ramello GB. eds, Cheltenham, UK Northampton, MA, USA: Edward Elgar Publishing.
JOSEPH ALOIS SCHUMPETER
JOSEPH ALOIS SCHUMPETER The European Heritage in Economics and the Social Sciences VOLUME 1 SERIES EDITORS Jürgen Backhaus, University of Erfurt, Germany Frank Stephen, University of Strathclyde, Glasgow,
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