Law and Economics in the South: The Role of Brazilian Courts

Abstract

Conventional wisdom holds that law and economics is either embryonic or nonexistent outside of the United States generally and in civil-law jurisdictions in particular. Existing explanations for the assumed lack of interest in the application of economic reasoning to legal problems range from the different structure of legal education and academia outside of the United States to the peculiar characteristics of civilian legal systems. This paper challenges this view by documenting and explaining the growing use of economic reasoning by Brazilian courts. We argue that, given the ever-greater role of courts in the formulation of public policy, the application of legal principles and rules increasingly calls for a theory of human behavior (such as that provided by economics) to help foresee the likely consequences of different legal regimes. Consistent with the traditional role of civilian legal scholarship in providing guidance for the practice of law, the further development of law and economics in Brazil is therefore likely to be mostly driven by judicial demand.