The Relationship between Law, Economics and Management

A number of interconnected factors bind law and economics together. Privatized law benefits people and organisations that are prepared to engage in agreements in a free market; public law, on the other hand, seeks to offset the negative consequences of a free market system by economic and social regulation and intervention. Applied in the field of Law & Economics, positive economic analysis is employed in an effort to explain the actions of lawmakers and other government officials such as prosecutors, judges, bureaucrats, and other government workers. The concept of rational choice, which underpins much of contemporary economics, has shown to be quite beneficial in understanding how individuals behave when confronted with a variety of legal limitations. Companies are basically recognised as “entities” in the eyes of the law, capable of acquiring and exercising certain rights in the jurisdiction in which they are registered. Companies are run by Managers and hence management is closely interconnected with law.Firms and laws have a symbiotic relationship in the impact of that law on how firms are created, as well as their rights and how they do business after they have been established. This article provides a brief analysis of the relationship between law, economics, and management.