Map and Territory in Comparative Law and Economics

This paper argues that developing more reliable methodological foundations for Comparative Law requires us to acknowledge the virtues and limitations of well-designed simplification in successfully accounting for the complexity of legal reality. If the researcher is aware of its limitations, Law & Economics is well suited to providing analytical frameworks that increase our ability to compare real-life legal institutions by reducing the complexity of the law in action. Relying on some underexplored elements of New Institutional Economics and recent developments in Comparative Law and in Law & Economics, it presents a pathway to overcome the main methodological pitfall of a joint approach. For this purpose, it analyses the problems of the functional method, traces how Law & Economics was brought into Comparative Law, discusses the main methodological advantages and pitfalls of combining both disciplines and proposes concrete forms to make use of such advantages, while avoiding the pitfalls.