Between Valuation and Monetization of Efficiency in Economic Analysis of Law: Is It Possible?

Abstract

This paper aims to show the basic idea of efficiency in economic analysis of law (EAL) and at the same time promote its efficacy by using the optics of its studies that use 'economic eyes' while providing justice as a legal goal. Starting with the points of utility from Bentham's thought which was then conceptualized as an economic concept of justice because in EAL, law and justice view society as an economic entity. Three models were raised, then the analysis of efficiency became an economic tool to be used to achieve the goal of maximizing welfare. The goal is to get answers to whether it is possible to valuate and monetize all aspects of efficiency in order to get benefits. Each model is constructed with different assumptions and scenarios but still under one framework, namely how efficiency works according to EAL in order to maximize the widest social utility. As a result, it becomes inefficient when faced with circumstances that are contrary to the basic principles of EAL so that it cannot be monetized. There are circumstances where valuations are difficult or even impossible to monetize at decent values, especially against certain costs and benefits. These results show that the difficulty in quantifying some aspects tends to replace one's subjective values.