The Legal-Economic Performance Framework as a New Approach to Institutional Impact Analysis and Critical Thinking in Economics

Abstract

Institutional structure--or the rules and laws (both formal and informal) in use informing human interaction--is often held separate from mainstream economic research and analysis. The Legal Economic Performance (LEP) Framework, as developed and utilized by the author (with Eric Scorsone) in real-world extension work, centers on the analysis of human interdependence and its key legal components to consider the impacts of proposed or past changes to institutions. A language of legal relations-Hohfeldian analysis-is used to break down and describe the situation. Through this process, the key issue or issues of interdependence are identified, enabling the analyst to identify the structural options available to address it. Finally, the structural components of the institution, the distributional outcomes they give rise to, and assumptions about human conduct or behavior are considered. This paper introduces the LEP model and its uses by the wider heterodox community, with special attention to its application in the domain of housing rights and roadway congestion management.