LAW AND ECONOMICS

The "Law and Economics" course is offered in the first year of the Major in "Policies and Institutions for Social Impact" and contributes directly to the interdisciplinary objectives of the programme, which focuses on the study of how rules and governance influence the behaviour of markets, organisations, and public or supranational institutions, while preparing students to act as agents of change and social impact.

Within this framework, the course provides a conceptual and methodological foundation for understanding the relationships between economic systems, institutions, and law. Its aim is to show that legal rules do not merely operate as external constraints on economic activity, but also help shape incentives, behaviour, forms of coordination, and institutional arrangements. Through economic analysis of law, institutional economics, and behavioural approaches to regulation, students acquire tools to analyse how institutions function, the effects of rules and public policies, and the possible intended and unintended consequences of regulatory choices.

The course combines this positive and analytical perspective with a critical and normative dimension. The analysis of efficiency, incentives, and institutional performance is complemented by reflection on the criteria through which the justice and social impact of institutions and markets may be assessed: liberty, rights, equality, capabilities, dignity, contractual fairness, exploitation, and the moral and legal limits of markets. The course therefore enables students to ask not only how a given institution or regulation works from an economic point of view, but also which values it promotes, which social costs it may generate, and whether it can be justified from the standpoint of social justice and sustainability.

Because of this approach, Law and Economics performs a connecting function among the different components of the Major: it prepares students to address issues of policy, governance, organisational responsibility, and international negotiation with a stronger awareness of the interactions between law, economics, institutions, and society. At the same time, through case studies, discussions, research activities, and individual reading paths, the course contributes to the development of the critical analysis, argumentative skills, and independent judgement required by the programme and useful in future professional roles as policy makers, regulators, analysts, managers, and, more generally, in contexts where the social impact of public and private decisions must be assessed.

Knowledge and Understanding
The course aims to develop an interdisciplinary understanding of economic approaches to law, with a particular focus on: a) “non-traditional” ways of thinking about law: not only as command, but as a system of incentives, rules, and institutions; b) critical, philosophical and ethical reasoning, as well as students’ ability to understand and critically analyse regulatory problems and real-world cases in public policy and administration; c) basic tools for critically evaluating the social impact of economic, legal and political institutions and the values at stake in their design and operation. Students will also be able to contextualise the issues addressed within the broader framework of the relationship between law, society, the economy, and public and private institutions.
Materials available on the course’s digital platform, homework assignments, in-class discussions, and short quizzes and an interim assessment will allow students to monitor and verify their competencies in real time.

Applying Knowledge and Understanding
Students will be able to interpret and apply the concepts acquired during the course in order to critically assess concrete cases and/or regulatory proposals and their social impact, e.g. in terms of human dignity, liberty, equality, economic and social justice, and sustainability.

Autonomy of Judgement
Students will learn how to collect materials and read, interpret, and critically analyse key texts, articles, sources, judicial opinions, critiques, and scholarly proposals. They will acquire the ability to autonomously evaluate such materials by formulating their own critical judgement regarding their application or applicability to concrete cases, and by identifying appropriate solutions to practical problems through class discussions, research activities, and individual and/or group presentations.

Communication Skills
Students will develop communication and argumentative skills, as well as the ability to use appropriate technical language through continuous classroom discussions and individual and/or group presentations.

Learning Skills
The knowledge acquired will enable students to independently understand and interpret the issues developed during the course. Having gained a solid understanding of the fundamental aspects of the subject, students will be able to continue deepening and expanding their knowledge autonomously on the topics covered in the course, both for further individual research in view of the final thesis and/or for their future career.

There are no prerequisites

The relentless progress of science and technology, the globalisation of markets, and the acceleration of innovation processes are accompanied by a growing demand for legal and/or ethical regulation of policies and public administrations, businesses, and labour, by a corresponding specialisation of knowledge related to so-called “economic approaches to law”, and by an international debate on the moral and/or legal limits of markets. Within this framework, the course provides students with conceptual tools to understand and critically assess institutions, regulatory frameworks, and legal decisions in public administrations, businesses, and labour relations, showing how economic, legal, ethical and philosophical categories such as efficiency, justice, dignity, responsibility, and limits of the market are also operative in the most concrete policies, institutions and legal practices.

Course Structure
The course is divided into two modules. The first module introduces the foundations of economic approaches to law and concludes with an interim assessment. The second module offers guidance and suggestions for students to develop their own reading, personal interests and research or career paths.

Module 1 (roughly 18 hours)
Law&Economics approaches and Their Applications
Contents:
1.1. Introduction to the Economic Approaches to Law:
Markets and Regulation;
1.2. Economic analysis of law:
basic assumptions: rationality, incentives, efficiency, utilitarianism and social welfare; Coase theorem and transaction costs;
1.3. Institutional Economics:
Institutions, economic growth and governance; governing the commons;
1.4. Nudging and libertarian paternalism:
behavioural economics, freedom, choice, choice architecture;
Applications to markets, contracts, private and public institutions, and labour.

Module 2 (roughly 12 hours)
Social Justice, Markets, Morals and Regulation
Contents:
2.1. Economic and Social Justice:
Utilitarianism; Rights, liberty and libertarianism; primary goods, equality and egalitarianism; the capability approach.
Applications: Distributive justice and Tax justice.
2.2. Moral and Legal Limits of Markets:
fair and unfair exchanges, contractual fairness; commodification; exploitation, power asymmetries and consent; corruption.
Applications: labour, public services, health.

Note: Slides and other short readings to be completed before class, as well as chapters/articles, along with additional handouts and materials, will be made available on the course platform or shared folder in advance.

1) Economic Approaches to Law and Their Applications
Note: the following materials are mandatory
- Selected short videos: Introduction to Law and Economics - Markets and Regulation
- R. Cooter and T. Ulen, Law and Economics, 6th ed.: Ch. 1, “An Introduction to Law and Economics”
- Ronald H. Coase, “The Institutional Structure of Production”, American Economic Review, 82(4), 1992, pp. 713–719 (1991 Nobel Lecture)
- D.C. North, “Institutions”, The Journal of Economic Perspectives, Vol. 5, No. 1 (Winter, 1991), pp. 97-112
- Thaler, R. H., & Sunstein, C. R. (2003). Libertarian paternalism. American economic review, 93(2), 175-179.
- Cass R. Sunstein, “Nudging: A Very Short Guide”, Journal of Consumer Policy, 37, 2014, pp. 583–588
- P. Silvestri, “Economic Approaches to Law” (English transl.: “Economia. Il codice giuridico del mondo”, in A. Andronico, F. Greco, F. Macioce (a cura di), Dimensioni del diritto, Giappichelli, 2019: pp. 399-426)
- handouts and slides

2) Social Justice, Markets, Morals and Regulations
Note: Based on their interests, the student must choose two or more of the chapters listed below. Guidelines for selecting chapters, together with suggestions for additional optional readings, will be provided during the course and made available on the course platform

2.1) Economic and Social Justice
- Slides and free choice chapters from: M. Sandel, "Justice: What’s the Right Thing to Do?" (any edition): Chs. 1, 2, 3, 6

2.2) Moral and Legal Limits of Markets
Slides and free choice chapters from:
- M. Sandel, "Justice: What’s the Right Thing to Do?" (any edition): Ch. 4
- M. Sandel, "What Money Can’t Buy: The Moral Limits of Markets" (any edition): Introduction, and Ch. 3.

Assessment Method
An interim written assessment at the end of Module 1 and a final oral examination
The exam will be assessed according to the following criteria:
• Relevance of answers to the questions asked;
• Accuracy and depth of understanding of course content;
• Ability to connect different topics from the syllabus;
• Ability to provide examples;
• Appropriate use of technical language;
• Overall clarity and effectiveness of presentation.

written and oral

The instructor is responsible for ensuring the authenticity and originality of all examinations and coursework. In cases of suspected academic misconduct, an additional on-site assessment may be required during the exams, which may differ from the standard format.

The grading scale is expressed in thirtieths:
0 to 17: Fail (insufficient knowledge; the exam must be retaken)
18 to 20: Sufficient (basic knowledge and acceptable vocabulary)
21 to 23: Fair (fair understanding and clear connections between topics)
24 to 26: Good (good analysis and appropriate use of terms)
27 to 28: Very good (strong command of the subject)
29 to 30: Outstanding (excellent mastery of all topics).
30 cum laude (30L): Exceptional (awarded for flawless knowledge and brilliant critical analysis)

Lectures and interactive seminars
Lectures, supported by slides, incorporate individual and collaborative active learning through the analysis of case studies, short videos, simulations, problem-solving activities, group work and group decision-making processes, classroom discussions, and final presentations of individual or group projects and research.
For the purposes of active learning, students are required to read or view in advance the materials discussed in class and uploaded beforehand to the course’s online platform. Advance materials may include slides, short videos, short articles or chapters, excerpts from court decisions, text extracts, etc.
Should the course be delivered in blended or remote learning mode, any necessary adjustments may be introduced compared to what is stated above, in order to ensure compliance with the programme outlined in this syllabus.

Attendance
Attendance is mandatory, given the seminar-based and dialogical nature of the course, the group work, and in-class debates.

This subject deals with topics related to the macro-area "Poverty and inequalities" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development