In the last few years, efforts have been made to convince Brazilian judges that they must take into account the economic consequences of their decisions. But many arguments which are used to thus convince judges presuppose that legal matters have to be understood by reference to a conception of markets taken as abstract entities. In such arguments used to convince judges, markets are considered to be inherently “efficient” or are said to be accompanied by nonmarket institutions (including legal institutions) that allow them to function efficiently. These arguments are presented to judges with the expectation that they will begin deciding in the manner prescribed by the advocates of the “Law and Economics” literature, which partially overlaps and converges with the “Law and Finance” literature.
However, alternative modes of legal analysis that look at economic matters under a different perspective have begun drawing attention of judges and jurists in Brazil. Thus a first judicial decision (legal action no. 0001556-52.2011.805.0223) was given in the state of Bahia that relies partly on the Legal Analysis of Economic Policy (LAEP).
The matter under the consideration of the court was whether the state (provincial) government is under the obligation to see to it that the services of public defenders are made available to the poor in the county of Santa Maria da Vitória, in the state of Bahia. The court decided that the government was under such an obligation as a matter of law and
determined that two public defenders be allocated by the government to work in the county, well equipped with office premises, computers, office supplies, security provided by one police officer, means of transportation etc.
In considering the economic aspects of the case, the court explicitly rejected the so-called “Economic Analysis of Law”, since this approach “adopts cost-benefit analysis” in ways that unduly dismiss non-economic values and interests, which are “extremely important for [the attainment of] economic justice”. Moreover, the court argued that “the system of economic policy must remain subordinated to the empirical fruition of rights, above all the fruition of fundamental and human rights of individuals or social groups.”
The court also stated that an appraisal of the economic aspects of the case must not proceed from the idea of “an abstract market, as is recommended by the neoclassical theory of economics”, but must look at the “empirical market, whose structure is legally projected in contractual aggregates”.
It is safe to say – as does the court in its decision – that the staunchly formalistic style of legal analysis (called “legal dogmatics”), as well as the idealizing form of legal argument built around abstract principles, that may reflect the whims of the judge’s mind, do not help much in confronting economic problems embedded in legal issues. Nor Economic Analysis of Law, nor yet the strategy of decision based on interest balancing, do provide special and enlightened help to the crafting of judgment oriented to promote genuine economic justice, which presupposes the effective enjoyment of fundamental and human rights.
Thus, in adopting grounds derived from the Legal Analysis of Economic Policy (LAEP), the court of Santa Maria da Vitória in Bahia opens a path for Brazilian judges and other legal professionals to engage in the exploration of modes of legal analysis of economic concerns that are alternative to what these other – and rather trite – approaches have to offer. Such a path to new modes of legal analysis of economic matters undoubtedly has better chances to help in the promotion of economic development, in combination with the advancement of economic justice and with a more conscientious stance towards the prevention of environmental degradation.