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Economic Analysis of Welfare Economics, Morality and the Law

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  • 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.

Suggested Citation

  • Steven Shavell, 2003. "Economic Analysis of Welfare Economics, Morality and the Law," NBER Working Papers 9700, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9700
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    References listed on IDEAS

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    1. Hirshleifer, Jack, 1977. "Economics from a Biological Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 1-52, April.
    2. Kaplow, Louis & Shavell, Steven, 1994. "Why the Legal System Is Less Efficient Than the Income Tax in Redistributing Income," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 667-681, June.
    3. Joel Slemrod & Jon Bakija, 2008. "Taxing Ourselves, 4th Edition: A Citizen's Guide to the Debate over Taxes," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693631, April.
    4. Shavell, Steven, 1981. "A Note on Efficiency vs. Distributional Equity in Legal Rulemaking: Should Distributional Equity Matter Given Optimal Income Taxation?," American Economic Review, American Economic Association, vol. 71(2), pages 414-418, May.
    5. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    6. Sanchirico, Chris William, 2000. "Taxes versus Legal Rules as Instruments for Equity: A More Equitable View," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 797-820, June.
    7. repec:bla:scandj:v:81:y:1979:i:2:p:264-84 is not listed on IDEAS
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    Cited by:

    1. Faisal Jamil & Eatzaz Ahmad, 2013. "An Economic Investigation of Corruption and Electricity Theft," Working Papers id:5372, eSocialSciences.

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    More about this item

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D6 - Microeconomics - - Welfare Economics

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