Economic Approach to Law

The Economic Approach to Law analyzes legal rules by examining their effects on economic efficiency and individual incentives. It views laws as tools to promote overall prosperity by encouraging behaviors that maximize benefits and minimize costs. This perspective considers how legal decisions influence resource allocation, trade, and decision-making, aiming to create a legal system that improves economic well-being. Essentially, it assesses laws based on their economic impact, suggesting that laws should be designed to produce the greatest good for the greatest number.