Working Paper: NBER ID: w9700
Authors: Steven Shavell
Abstract: This paper contains the chapters on welfare economics, morality, and the law from a general, forthcoming book, Foundations of Economic Analysis of Law (Harvard University Press, 2003). I begin in chapter 26 with a discussion of the normative foundations of economic analysis, namely, the subject of welfare economics. I also describe notions of morality and fairness, which play an important, if dominant, role in much normative discourse about law, and I discuss the connections between welfare economics and morality. A theme of this discussion is that notions of morality have functional aspects, and that, for a complex of reasons, they also take on importance in their own right to individuals. Then in chapter 27, I consider the observed relationship between law and morality, and comment on what might be thought to be the optimal relationship between law and morality. In chapter 28, I discuss issues concerning income distributional equity and the law, including the question of whether the distributional effects of legal rules should influence their selection. The answer to this question will be a qualified no, given that society has an income tax system that can serve to redistribute income or to correct problems with distribution that arise due to the effects of legal rules.
Keywords: No keywords provided
JEL Codes: D00; D6; K00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| adherence to moral principles (A13) | individual utility (D11) |
| adherence to moral principles (A13) | social welfare (I38) |
| punishment proportional to severity of bad acts (K40) | deterrence of undesirable behavior (K42) |
| adherence to moral principles (A13) | cooperative ventures (P13) |
| cooperative ventures (P13) | overall welfare (I31) |