Wolfgang Weigel's adaptation of a civil law, German language treatment of the ever expanding discipline of law and economics to suit Anglo-American common law readers achieves much as a consolidation of the main principles in the field. Unfortunately it fails to attain the stated goal of an introductory text in law and economics, of which no suitable version yet exists for students in the United Kingdom. Like many of the existing works on law and economics, Weigel's work contains separate chapters on property, obligations, crime and civil procedure, with less common treatment of public administration, labour and corporate law. However it lacks sufficient clarity, devoting too much time to an explanation of the origins of the theories rather than their meanings.
Weigel's grasp of the subject is clearly superior as he explores cost-benefit analysis, incentivization and the Coase Theorem in depth. Still, the material is often presented in a disorganized fashion – many terms are mentioned en passant only to be covered in greater detail later, a format that could be confusing for students struggling to contextualise the application of complex concepts such as liability rules, Pareto efficiency or even legal concepts such as adverse possession or strict liability. To a degree this is an unavoidable consequence of a book which attempts to elucidate numerous inter-related issues which often require a pre-existing understanding of each other in order to establish a full picture of what constitutes economic analysis. As noted above, the author's emphasis on the discussion of the study of law and economics by reference to an extensive bibliography of often obscure commentators, rather than according sufficient attention to explaining the basics of the theories themselves, such as those relating to property rights and contractual relations, is problematic. Fitting particular concepts into an encyclopaedia of scholarship, much of which is derived from the German speaking world, is not a feature that will attract many readers of an English common law background. This approach further undermines the suitability of the book as an introductory textbook, although it operates well as a starting point for further research, another one of the book's often stated purposes.
One of Weigel's clear strengths is his focus on new institutional economics, or the study of irrational motivations behind human's allegedly self-maximizing behaviour, as well as the linked topics of behavioural economics and heuristics or bounded rationality. These subjects represent the most exciting developments in the field of law and economics and have been unfortunately neglected by many commentators, such as Cento Veljanovski, whose Economic Principles of Law is arguably the leading treatise on the subject in the United Kingdom. Some further exploration of Nudge economics (the structuring of human conduct through non-monetary incentives) as popularly developed by Richard Thaler and Cass Sunstein would have provided some added relevance to this stimulating field. Applications of game theory analysis to economic rule making are a further welcome component of this book, providing a much richer analysis of the concepts than offered by other authors. The infrequent use of formulae (such as that describing wealth maximization and Pigouvian taxes) is appropriate and illustrative although one expects that this may repel readers who lack an understanding of mathematics beyond simple multiplication and division, as is common among British undergraduates. Inconsistencies in style that range from playfully simple (establishing a market for a fictitious beverage) to turgidly incomprehensible (Coasian externalities regarding pollution from a mill) will leave readers with a mixed impression as to both the intended audience as well as the inherent complexity of the subject matter. Some further attempt to embrace Anglo American case law (other than the obvious Learned Hand formula from United States v. Caroll Towing 159 F.2d 169 [2d Cir. 1947]) might have appealed to an English speaking audience. In particular the discussion of least cost avoiders in relation to contractual assumption of risk could have mentioned the reasoning of the House of Lords in Tsakiroglou v. Noblee Thorl GmbH [1962] A.C. 93 or compensation based on gain after Attorney General v. Blake [2001] 1 AC 268. It is similarly noteworthy that there is no index of cases.
The book's coverage exceeds that of many law and economics textbooks including the celebrated Law and Economics by Cooter and Ulen in that it embraces the core concepts of property, obligations (contract and tort are joined together), and crime, as well as civil procedure, administrative and financial law. Nor is the discussion of these ancillary fields superficial. The treatment of the English versus American cost rules as (dis)incentives towards lawsuits is excellent as is the consideration of the role of self-interested lawyers in the escalation of the social cost of justice. Weigel is able to engage with these concepts without focusing unduly on the often jurisdictionally specific procedural rules that underlie them. Digressions concerning particular rules within the Austrian system, such as the fixed salary increases that modify the incentives of judges, are often highly illustrative, offering a unique insight to an established subtopic of economic analysis. While it might have been preferable to divide the chapter on enforcement into civil law and criminal law, the discussion of incentivizing the identification of criminals through the state's payment of informants is an interesting example of the relevance of economic analysis to methods of crime prevention. Some commentary on non-market advantages associated with criminal behaviour, such as the recently identified propensity of young men to seek imprisonment as a status symbol, would have enhanced this section as well as provided some scope of originality.
The chapter on the law and economics of the public sector is the strongest component of the book and one that would make Weigel's work worthy of recommendation on its own, in large part because this material is largely missing from many other books in this field. Here the author manages to evaluate the economic motivations of politicians, voters and public servants, examine issues of privatization and natural monopolies as well as the important topic of regulatory impact analysis. While the analysis is penetrating and thought provoking, readers may get the sense that Weigel is attempting to cram everything he has not yet said in this book into this catch-all chapter, as he skirts concepts such as public choice theory, game theory and infinite regress in an often muddled manner. There is much material on political science, history and even mathematics that is at times engaging and others distracting. The author's comments regarding the peculiar form of self-interest common to civil servants is enjoyable and informative, exposing the hidden costs of excessive state involvement in the economy. This view is a welcome counterpoint to the now ubiquitous allegations of greed that infests the private sector.
Comprehensive and analytical if at times disorganized, Economics of the Law is a gratifying addition to the growing scholarship on law and economics. However it is difficult to assert that Weigel has said much that has not been said before, and admittedly originality of ideas was never claimed by the author. Beyond the novel concluding chapters on the law and economics of the public sector and further applications to labour and business law, Weigel's book's most notable contribution to the subject is its eccentric style (his often casual interjections to the reader) and odd, often highly edifying examples (such as references to the Austrian civil code). Given the dearth of material from outside the United States, students of law and economics in Britain would accordingly be advised to consider this work as a suitable, innovatively argued introduction to the field.
