Hastings International and Comparative Law Review


Economic analysis plays a major role in the American legal discourse, while its position in the German-speaking legal debate remains comparatively limited. In Germany and Austria, a widespread aversion against law and economics can be observed among legal scholars. This article advances an explanation for this divergence on the basis of two main factors. First, American legal realism enjoyed great success, whereas the German freelaw movement failed to leave a lasting impression. While legal realism transformed American legal thought and opened up the discourse to policy arguments, the predominant German legal theory emphasizes the internal coherence of the legal system, and assigns only a limited role to external elements. Second, the different attitude towards utilitarianism and consequentionalist thinking in general can explain why law and economics takes a prominent position in the U.S. legal academy.