Institutional law and economics has had minimal impact on rival traditions in the economic analysis of law. One reason is that institutionalism lacks a coherent normative foundation that can compete with wealth maximization (Chicago School) and Wicksellian unanimity (public choice). This paper argues that the discourse ethics of Jurgen Habermas as presented in his Between Facts and Norms constitutes a normative foundation for legal theory that is compatible with institutional law and economics. The paper begins by noting that institutional law and economics alone contains a theory of economic agency that comports with discourse ethics. Habermas' conception of the reconstructive sciences as instrumental to critical social theory is then taken up. Economics arguably qualifies as a reconstructive science in that the emergence and continual reshaping of exchange institutions requires exercises of communicative action. The informal, discursive sources of democracy are the center-pin of Habermasian ethics, which calls into service speech-act theory. A discussion of specific affinities and antagonisms between discourse ethics and institutional law and economics follows. It is argued that discourse ethics fails to integrate the economy with morality, law and politics, whereas institutionalism fails to integrate morality with the economy, law and politics. These complementary blindspots suggest rephrasing institutionalist problem-solving as a discursive activity exhibiting normative characteristics. Copyright 1999 by WWZ and Helbing & Lichtenhahn Verlag AG
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Article provided by Blackwell Publishing in its journal Kyklos.
Volume (Year): 52 (1999) Issue (Month): 4 () Pages: 511-35 Download reference. The following formats are available: HTML,
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