2. TWO METHODS OF EMPIRICAL LAW AND ECONOMICS: QUANTITATIVE METHOD AND CASE-STUDY

Since its inception, the field of law and economics has been strongly empirical, challenging the highly abstract approach to theoretical inquiries into law and economics.Footnote ¹³ Once could even claim no law and economics scholar in the US is anti-empirical, although fundamentally different methods exist. The first step consists in introducing these methods.

In China, Professor Bai Jianjun first comprehensively introduced and employed these empirical methods. He defined empirical legal study to be a method “of empirical and quantitative study conducted according to a designated procedure.” He identified three basic factors fundamental to empirical methods: designated procedures, empirical data/information, and quantitative analysis.Footnote ¹⁴ Such an understanding fits well with general regression studies of mass data, which have long existed in the law and economics scholarship.Footnote ¹⁵ In addition, another type of empirical method should be included: case-study, which was pioneered by scholars like Ronald Coase and has been developing ever since. According to this method, scholars conduct research on one or more individual cases, investigating the details of these cases without having to code the information. When using this method, scholars usually do not conduct quantitative analysis of the information included in cases, although this method shares the same goal as quantitative study in confirming or challenging an existing hypothesis. With regard to information collection and analysis, the two methods diverge. With quantitative study, a newly emerging and increasing popular tool consists of data collection through tailored experiments or analysis of existing data generated in past experiments. This tool has given rise to the entirely new field of behavioural law and economics. As it is data-based, and analysis consists of using statistical methods such as regression, it belongs to the category of quantitative methods.Footnote ¹⁶

In contradistinction to widespread misconceptions, the methods of quantitative study and case-study are not at odds, but develop in parallel, providing different perspectives in law and economics scholarship. With the above outline in place, it is now possible to more closely examine each of these methods and their development in China.

The first method in empirical law and economics is quantitative study.Footnote ¹⁷ It consists of four steps: the presentation of data, formulation of a hypothesis to test, quantitative analysis, and application.Footnote ¹⁸ This method tests an existing hypothesis by analyzing a substantial amount of data and stylized facts. Quantitative analytical tools and models—especially regression models—connect data to hypotheses. In collecting and processing data, rules and norms that have traditionally been employed in statistical analysis should be followed. When the data are representative and the results are statistically significant, results from the application of these methods can shed light on things we do not know about the real world, providing evidence to use in assessing existing legal institutions and formulating plans to improve intuitions.

In the US, the birthplace of law and economics, such data-driven methods of empirical law and economics have long been a critical part of the scholarship. George Stigler, who won the Nobel Prize in economics, is one of the early heroes in this field, whose scholarship has had a profound and lasting effect.Footnote ¹⁹ Gary Becker is another, having applied such methods to provide unique insights into crimes and punishment,Footnote ²⁰ who has become the cornerstone of modern legal scholarship on criminal and criminal procedural law. All elite law schools in the US have permanent faculty specialized in empirical law and economics, and almost all of them have PhD degrees in economics or political science,Footnote ²¹ which are themselves highly empirical disciplines. The newly elected Dean of the University of Chicago Law School, Tom Miles, is one of the leading law and economics empiricists in the US. The prominent position of this research is demonstrated by the fact that almost all the recent papers published in Journal of Legal Studies, created by Richard Posner, come from the field of empirical law and economics, exploring large data sets. Additionally, Richard Posner himself has been focusing on the empirical study of judicial behaviour for the past few years, and has been teaching a yearlong workshop on judicial behaviours in the University of Chicago Law School.

The scientific nature and stringent procedural requirements have added new weight to the persuasiveness and attractiveness of empirical methods in legal studies. However, to be valuable to legal scholarship and policy-making, the application of this method should apply not only standard criteria of social sciences research, but also unique measurements from legal scholarship. So far, this method has been applied to legal issues in China, such as judicial reform, criminal law,Footnote ²² and securities regulations.Footnote ²³ With respect to the formulation and application of theoretical frameworks and hypotheses, these scholars often started with well-established frameworks and hypotheses from the US, with modifications to reflect the reality in China and to make them more relevant to China.Footnote ²⁴ Such attempts respond effectively to the claims by Milton Friedman that empirical study in economics should constantly update existing hypotheses and theoretical frameworks.Footnote ²⁵

Quantitative study has a unique value, confining academic discussions and critiques to calm and reasonable environments. On the one hand, the data and stylized facts are highly abstracted from reality, with much of the emotion-provoking details completely stripped away, thereby helping to avoid highly charged emotional confrontations. Meanwhile, most tools and measurements are universally accepted and used by the relevant scholars, providing a consistent set of criteria in assessing quality and defects in research. In China, such a function is particularly valuable: many scholars working in law and economics, and the broader fields of law and social sciences, have established a culture of open and rigorous critique and discussion, somewhat rare in China.Footnote ²⁶ Such fundamental change would surely help the establishment and development of an academic community united around diversified research methods—instead of particular subject areas—which is not only healthy, but also necessary in today’s world.

The case-study, a second type of empirical method used in law and economics, does not focus on whether the target of analysis is representative of a broader population, and this method does not require the coding of information or statistical analyses of the information collected. Such study could be based exclusively on a case resulting in a controversial judicial decision, or a series of examples identified through methodologies similar to field study and investigations.Footnote ²⁷ Mr Coase has demonstrated the value of this method in numerous works.Footnote ²⁸ Many have followed him, such as Robert Ellickson in his seminal piece “Order without Law: How Neighbors Resolve Disputes”Footnote ²⁹ and Lisa Bernstein in her study of rules and dispute resolution in the New York diamond industry.Footnote ³⁰ In such scholarship, the choices of individual cases and their descriptions are diverse and demonstrate differences in the understanding, application, and innovation of law and economics theories. The research in such work is not subject to any stringent methodological requirements. The openness and particularity of the scope of study and methodologies applied best exemplify the revolutionary nature and attractiveness of case-study research in law and economics.

Chinese economists began employing this method before legal scholars. As early as 1993, the Unirule Research Institute of Economics started publishing volumes of case-studies edited by economist Zhang Shuguang and his collaborators in institutional innovation in the field of law and economics. When the first volume was published in 1996, all authors were economists. Legal scholars began making contributions to this series when the third volume was published in 2004, on the interaction between formal and informal legal institutions.Footnote ³¹ Another important milestone in the field is the annual Forum of Law and Economics in China, first started by two economists: Huang Shaoyan and Shi Jinchuan. In this forum, interesting and provocative case-studies as well as a quantitative study of law and economics were presented. A case-study of land reform in Chengdu, Sichuan, conducted by a team led by economist Zhou Qiren, nicely applied law and economics theories of property to China’s rural land system.Footnote ³²

The fact economists took the lead in law and economics can be explained in terms of the nature of China’s legal institutions. Formal legal rules have often been either absent or unenforced, leaving space open for informal arrangements and modified enforcement by local governments. Such modified arrangements have sometimes been illegalFootnote ³³ or departed from the law, persisting for relatively long periods of time.Footnote ³⁴ At other times, such informal arrangements have evolved and developed into formal legal systems.Footnote ³⁵ Since Chinese legal research and education were dominated by interpretations of legislation and formal rules, legal scholars did not necessarily see a need to include informal arrangements and illegal activities in their research agendas. Moreover, when law and economic introduction was performed by jurisprudence scholars as an abstract research method, it was a bit detached from the vivid examples and legal dilemmas in the real world.

Precisely because China is a jurisdiction in the process of developing formal legal systems, it has provided legal scholars with an array of materials on which to conduct research, where alternative transactions arrangements have arisen spontaneously, which either violated the law or filled a gap left by the law in China. A number of innovative and interesting legal studies have emerged as case-studies, applying the analytical framework and methodologies of law and economics. These include papers applying game theory to interpret China’s legal rules on witness,Footnote ³⁶ the research of Chinese lawyers under the framework of institutional economics and a quantitative study of legal fees,Footnote ³⁷ a series of case-studies on water right transactions,Footnote ³⁸ and urban land reform in Shenzhen.Footnote ³⁹

Compared with quantitative studies, for case-studies the legitimacy of interpretations and scope of applications are limited. However, the power of this method in outlining institutional details and framing the complexity of background conditions to individual institutions is unparalleled. In a rapidly changing society, where changes are unprecedented, such details and comprehension are indispensable for understanding these situations and resolving tensions in such development. The comparative advantage of this method has been beautifully demonstrated in the study conducted by Hou Meng regarding China’s Supreme Court.Footnote ⁴⁰ Another advantage of this methodology consists of its openness to the incorporation of information from richer varieties of sources. Unlike quantitative methodology, which requires the stringent and long-term training of research staff, most legal professionals are able to engage in case-study methodology. With a much lower threshold for research skills, judges, prosecutors, and lawyers could also contribute. Such wide participation would surely enrich the information and perspectives of legal research in a rapidly changing society full of surprises and puzzles. Excellent research on criminal procedural law has clearly been beneficial.Footnote ⁴¹ Although case-studies generally face more stringent scrutiny in law review publications in the US, it remains an extremely valuable and indispensable method for Chinese legal scholars. These studies might well remain limited in their application, although they undoubtedly provide rich information necessary for further research and the formulation of new rules and policies.

3. QUANTITATIVE LAW AND ECONOMICS RESEARCH AND CHALLENGES IN CHINA

The boundaries between different subjects and research methodologies are not defined by theory, but by their respective functions.Footnote ⁴² This should be kept in mind in classifying different methodologies in empirical law and economics. While the methodology associated with case-studies is helpful for understanding institutional details and background information, the methodology associated with quantitative studies is much more powerful in identifying causal relationships that may be unexpected, pointing out surprising directions for improvement. The rapid development and increasing dominance of the latter in law and economics study in the US are indicative of its attractiveness features. The same is true in China, although quantitative methodology is of unique value to Chinese academia. It is scientific in nature and highly technical, requiring well-disciplined training and application. Naturally occurring discipline for academic research—in terms of norms and ethical standards—will follow from this methodology, providing strong incentives for quality research and filtering out low-quality research. In the meantime, however, I believe Chinese scholars and policy-makers should be cautious regarding its value to policy-making and research. Caution should be exercised before making substantial investments of time and capital into highly technical methodologies and giving considerable weight to the conclusions following from this methodology for policy-making. There are two reasons. Certain challenges should be overcome first, some of which are inherited in the mythologies and some are unique to China.

Quantitative study is driven by data. The choices of research subjects and hypotheses are directly limited by the availability of data, as well as the quality and contents of the data sets. Such a limitation best exemplifies the scientific nature and objectivity of this research method. However, this could result in negative consequences to the originality of legal scholarship. Assuming that research scholars also conduct certain cost–benefit analyses in choosing research subjects and establishing research agendas, subjects with a greater availability of data might attract more research attention. However, such subjects are not necessarily more important, in terms of either theoretical inquiry or practical value. If these subjects are chosen, and empirical studies are conducted on such subjects, resources could well be wasted on unimportant issues. In addition, these circumstances could well give rise to the unjustified self-growth of the field, because scholars may want to create a network with positive externality: if more participants appear in a particular subject area, then the more important this subject area would appear, and the potential gains each participant would derive from being a part of this network would potentially increase. Such conditions could incentivize scholars to attempt to grow a network such as this once it arises. However, such self-expansionary tendencies might well be harmful to society, especially legal scholarship. It could result in waste and divert resources from highly innovative fields of study that might not appear attractive in the first place. Quantitative research is particularly well known for being expensive, and is not necessarily an affordable luxury for resource-limited law schools in China. There are numerous quantitative studies of judicial behaviour in the US, but their overall value is doubtful.Footnote ⁴³ Similarly, judicial behaviour and judicial systems also attract considerable attention among scholars employing this quantitative empirical method,Footnote ⁴⁴ apparently influenced by American legal scholars. In the hot area of behavioural law and economics, a few Chinese scholars, led by Li Xueyao, were pioneers in using experiments in research.Footnote ⁴⁵ Before others follow down this same path, an awareness that China is different from the US in many important respects is necessary, which would make this topic relatively less important. For example, the judiciary does not enjoy the same degree of independence and influence in China as in the US. Although the level of transparency of judicial decisions is rapidly increasing in China, caution is necessary, since decisions to make cases public are not necessarily random. Drawing conclusions from such samples can lead to biased and even dangerous results. Fortunately, a number of scholars in China are conducting interesting research outside of judicial decisions, such as studies of legislative costsFootnote ⁴⁶ and securities regulations.Footnote ⁴⁷

The data-driven approach could affect one’s creativity in yet another way: one might not be able to explore one’s true passions and interests, but would be limited by the availability of quality data. Quantitative studies could undoubtedly be extremely original: the questions one asks about a given data set and causal links one identifies could be extremely original.Footnote ⁴⁸ However, quantitative studies rely almost completely on the extent to which data are representative. The goal of quantitative study is to prove or disapprove a widely held hypothesis. The former is usually associated with lower error rates, but the marginal benefits are regarded as minimal. The latter is regarded as more original and tends to attract more attention. It is not always easy to challenge established beliefs, and the introduction of various limitations could weaken the importance and originality of the research. Therefore, scholars face a dilemma: the more original a study, the higher potential error rates, and the more investment one has to make.

Of course, one could reduce one’s dependence upon the availability of quality data. For example, a research team could collect information and code this information themselves. Survey is yet another way to collect information. The Rule of Law Index, produced by a group of scholars in Zhejiang University, has utilized a lot of data of this nature.Footnote ⁴⁹ However, self-compiled data could lack objectivity and representativeness. When one compiles data, on one hand, and then uses these data to support one’s claims, on the other hand, potential conflicts of interests arise. The risks of moral hazards are extremely high. At the same time, whether the data set is substantial enough to be representative largely depends upon one’s financial means: data collection and data analysis are expensive. The third way to compile data is through experiments. Compared with the previous two methods, this manner of compiling data leaves open the widest space for manipulation. The quality of research, therefore, depends to a high degree on whether scholars maintain the highest degrees of integrity and professional ethics. Since this is difficult to ensure, experiment-oriented data and associated research should be stringently scrutinized.Footnote ⁵⁰

With respect to both positive and normative claims, the error rates in quantitative study are high,Footnote ⁵¹ and hence require a high level of precaution and efforts. One example illustrating such risks and safeguarding efforts is legal scholarship on citations carried out by Chinese scholars, following in the footsteps of American scholars. The work by Professor Hou Meng, one of the central figures in promoting interdisciplinary legal studies in China, is one such pioneering scholarship.Footnote ⁵² Costs and expenses of the research hence have been escalating to control such high risks. One way to appreciate the increased costs in the US is to look at the background of faculty members hired by top law schools to conduct research of this type: they have evolved from amateurs with the abilities to understand and run regression analyses to a whole new generation of scholars who have both JD and PhD degrees in social sciences, mainly in economics and political science.

To be sure, the development of technology, such as those for big data and Internet technologies, has dramatically reduced the high costs associated with quantitative studies. The popularity of interdisciplinary co-authorship among American scholars with different backgrounds and training has proved an effective solution, striking a better balance between high costs and controlling for the risks of error. A similar trend may develop among Chinese scholars in the future. However, the specific calculations of such cost–benefit analyses do not have to be the same in China as in the US. Chinese scholars do not have to follow the same standards and norms, in terms of publishing empirical work. Having said that, the importance and unique value that quantitative studies can provide in assessing the actual results of the implementations of laws and public policies should not be denigrated, especially given that the empirical foundations of most legislation and rule-making decisions in China are still lacking.

Striking such a balance requires that authors be fully aware of the potential trade-offs between the costs of research and rates of errors. Scholars should inform the audience as to how the data set has been compiled, limitations the project faces—in terms of the verification processes and applications of the conclusions drawn from particular research projects—and the need to identify the potential defects and blind spots in the research, even proposing alternative interpretations and outlining their impact on policy choices. To some extent, scholars engaging in quantitative studies need to be more conscious of the limitations and potential problems in their conclusions—more so than with other scholars. Precisely because the empirical study of law and economics appears more objective and rational, audiences might be less alert to potentially misleading and mistaken statements made in such works. When the conclusions could have profound implications for law-making and policy choices, the above-described “disclosure obligations” should be particularly emphasized. Such an obligation highlights a major difference between law and economics scholars and other social scientists, especially political scientists and sociologists in China. Legal scholars are semi-professionals, and legal scholarship often has a direct impact on individual cases and rule-making, while the impact of other social sciences scholarship tends to be indirect. Law and economics scholars owe a special obligation to the public to ensure the quality of their scholarship.Footnote ⁵³ Being candid and transparent is not a step back or defence against problems, but a necessary requirement to maintain the quality and integrity of empirical law and economics scholarship.

At the same time, one should appreciate the fact that the gap between data sets and conclusions could point towards valuable directions for future research. In quality articles of quantitative law and economics, scholars usually devote a special section to potential concerns about the data set, and potential challenges to the research and conclusions.Footnote ⁵⁴ In response, they sometimes try to explain why the conclusions would still hold. On other occasions, they try to point out alternative interpretations and potential directions for future research, which could either mitigate or resolve these problems. In sum, scholars are forthright about potential limitations and problems, remaining transparent and honest, without curtailing their unique contributions to the scholarship. Such standard disclosure is a critical disciplinary mechanism to ensure professional integrity, and it is one of the key considerations for editors in top journals, such as the Journal of Legal Studies.Footnote ⁵⁵ With more and more Chinese scholars publishing in top journals of this type, we should expect more progress from Chinese scholars in this field.

Another disclosure obligation of scholars in empirical law and economics is that of making original data available to the public for verification. Such a practice not only helps to ensure the quality of scholarship, but also helps scholars to develop their analytical skills at the same time. Length limits imposed by Chinese legal journals are relatively low, which might potentially reduce the abilities of Chinese legal authors to provide details about and fully explain original data. However, given the availability of the Internet and other affordable technologies, the fulfilment of this disclosure obligations should not impose too high a burden on Chinese scholars. Hence, Chinese legal scholars should take full advantage of technologies to carefully maintain the legitimacy and reputation of research in empirical law and economics.

The second challenge facing quantitative law and economics comes from outside the legal scholarship community, specifically the quality of data and other forms of information. First-hand information and data are surely ideal. However, the relative scarcity of such information and the high costs of collecting it have forced most scholars to rely on second-hand information. Information disclosure by governments to their publics constitutes a critical source of data for social scientific research in the US. However, such sources are largely limited in China, and this constitutes a major challenge to social scientists interested in conducting quantitative work. As mentioned above, the judicial decisions and factors affecting judicial decisions have been sources of study for quantitative law and economics. However, since many judicial decisions are not made available to the public in China, it is extremely hard for legal scholars to conduct effective research and provide sensible conclusions regarding judicial decisions in China, especially those triggering public controversies.Footnote ⁵⁶ When basic information is lacking, scholars simply have no way to put their skills and talents to use. Fortunately, such tensions are being ameliorated following the mandate by the Chinese Supreme CourtFootnote ⁵⁷ to establish three information platforms for the trial process, judicial decisions, and enforcement information, and the online information on these three platforms.Footnote ⁵⁸

Another factor contributing to this issue is that China lacks non-governmental organizations (NGOs) that could compile and provide quality information to social sciences research. The Chinese government has imposed various policy and legal restrictions on the establishment of NGOs, even though it is legally possible to establish NGOs in China.Footnote ⁵⁹ For-profit organizations specializing in data collection have emerged only recently and are still in their infancy.Footnote ⁶⁰ Information transparency of the Chinese government was addressed and accelerated when China joined the World Trade Organization (WTO). This resulted in the promulgation of China’s first set of regulations regarding governmental information disclosures in 2007. Major governmental departments and local governments also issued implementation rules to enforce this set of rules.Footnote ⁶¹ In April 2008, the central government’s information platform went online. Meanwhile, the Supreme Court of China also issued a series of rules to mandate disclosures of judicial decisions.Footnote ⁶² There is still a long way to go in making governmental information more transparent,Footnote ⁶³ but these sources have definitely provided more information for research.

Attention should also be given to the quality of official data released by the government. One extreme example is the alleged manipulation of critical information.Footnote ⁶⁴ Another example supporting such a concern is the often substantial differences between official data and data provided by NGOs on the same issue. For example, information on the level of the air pollutant PM_2.5 in the air of Beijing seems dramatically different, depending on the source of the information, specifically that of the Beijing Environmental Protection Bureau or the American Embassy. On certain days, the air was reported as only lightly polluted by the former but “dangerous” by the latter.Footnote ⁶⁵ Such a difference is puzzling, even if we take into account the possibility that the two institutions applied different standards in measuring the air quality.

In response, Chinese scholars have taken various measures to improve the quality of information that their study uses, one example of which is obtaining first-hand data directly from the government. By collecting and compiling the data themselves, scholars might have a better understanding of the data and, hence, reduce errors arising from this stage of data collection. However, such a hands-on approach could create moral hazards, given that the scholars who are trying to interpret the data are also those who collect and compile the data. So far, we do not know of any incidents where such conflicts actually arise, but such a possibility cannot be easily ruled out. For example, once a scholar obtains data on judicial decisions from a lower court, he might feel reluctant to criticize decisions made in this court or propose reform that could weaken the authorities of such a court or lower courts in general.

Having said that, I do not believe Chinese law and economics scholars should cease conducting empirical studies because of the above challenges exogenous to scholars and their studies. Furthermore, legal scholars apply empirical tools differently from social scientists such as economists and political scientists: “legal study is still largely rule-based, positive and normative,”Footnote ⁶⁶ hence it does not have to rely heavily on empirical study. Meanwhile, when courts and governments make legal decisions, they face a higher degree of uncertainty, resulting from limitations in information, time, resources, and skills.Footnote ⁶⁷ Therefore, the inherent uncertainties in law and economics empirical studies are especially intensified in the case of China as a transitional society. Therefore, the unique value of empirical legal study lies not in the value of the highly technical tools it employs, but in the discipline it imposes on scholars to pay attention to the real world and be original without having to sacrifice transparency in the research process.

4. EMPIRICAL LAW AND ECONOMICS, AND GLOBALIZATION OF CHINA’S LAW AND ECONOMICS SCHOLARSHIP

Some followers of Professor Su Li in the field of empirically spirited legal study in China emphasize the importance of exploring local subjects for legal study and paying attention to what has happened in real life.Footnote ⁶⁸ Such claims are wise, since the subjects of legal research tend to be local in nature, even though arguments and theories developed in legal research can be universal and of general application. Having said that, the effectiveness and legitimacy of certain legal claims with respect to factual evidence, either about so-called “legal facts” or legal rules, is rooted in local institutional set-ups, their cultures and customs. Hence, exploring local information and subjects is exactly the type of work in which legal scholars should engage. The interpretative power of law and economics has led to its success in both the legal sphere and policy-making, especially in the US, even though the efficacy of economics in predicting the financial crisis and addressing massive economic inequalities have been objects of attack, calling into question the value of the discipline.Footnote ⁶⁹ Such scholarship focuses on real issues in the day-to-day operations of legal institutions and has guided change in legislation, judicial decisions, and executive regulations, which profoundly affect legal development. Scholars have also sought to discover and draw inspiration from universal rather than merely local issues. Through such discoveries and their resulting intellectual discourse, scholars could help enhance understandings by outsiders of local issues in China, as well as those of a universal nature, thereby contributing to intellectual discourse in the global arena.

This point is particularly relevant to China’s legal scholarship. Throughout the last century, jurisprudence and legal research methodologies have been introduced into China from the outside, especially those pertaining to law and economics. Such theoretical frameworks and methodologies have been derived from and developed in terms of research regarding legal issues from the West. Therefore, it is inevitable that early work in empirical law and economics studies in China have largely applied these existing frameworks and methodologies to interpret their observations in China. Producing original work is, therefore, challenging. Together with language constraints, only a small number of legal scholars are carrying out in-depth discussions with peers in the US. Empirical law and economics research provides a perfect opportunity for Chinese scholars to have breakthroughs and more actively engage in the global dialogue of legal research.

The scientific and universal nature of the research tools and methodologies applied in empirical law and economics research has made it feasible for Chinese scholars to begin this global engagement. When scholarship applies various theoretical frameworks in legal research, no substantial differences exist in the frameworks applied, such as microeconomics, ecometrics, new institutional economics, information economics, industrial organizations, game theories, etc. In this respect, the achievements made by Chinese economists in global academic research and policy-making have been extremely promising.

For approximately the past two decades, both the literature and research methods for economics in China have developed dramatically and are not substantially different from those applied in other countries. With the aid of these universal analytical frameworks and tools, Chinese economists are able to tell stories about China in universal languages, thereby attracting global audiences among both scholars and policy-makers. Legal scholars undoubtedly face greater challenges than economists, given that legal research is of a more local nature. But law and economics—especially empirical law and economics research methods—have provided the best opportunities for overcoming these challenges thus far. For example, following the appointment of Israeli scholar Lucian A. Bebchuk as assistant professor in Harvard Law School in 1985, almost all elite American law schools have law and economics faculty members who originally came from outside the US.Footnote ⁷⁰ Another example is Ariel Porat, the ex-dean of Tel Aviv University Law School, who became a board member of the American Law and Economics Association and published numerous law review articles in law and economics. He also founded the journal of Theoretical Inquiries in Law, which is widely regarded as the best law and economics journal outside the US.

At the same time, foreign legal institutions provide a fresh, rich reservoir for empirical legal studies in the US and have become the subjects of top-rate legal scholarship. Some examples are the study of Japanese legal institutions conducted by Mark J. Ramseyer of Harvard Law SchoolFootnote ⁷¹ and scholarship on property in New Guinea conducted by Robert Cooter.Footnote ⁷² The sudden collapse of the Soviet Union and fundamental transformations of previous soviet-bloc and Eastern European countries also presented opportunities for world-class scholars in law and economics, such as Andrei Shleifer and Robert W. Vishny. The economic and social transformations in China over the past four decades are unprecedented, completely different from those in previous soviet-bloc and Latin American countries. Such novelty provides rich sources of new issues and legal scholarship. To apply universal methodologies to study these novel issues should pave a path for Chinese legal scholars to participate and take leadership roles in the global stage. Again, a generation of Chinese economists trained in top American economic schools conducted a series of studies about China’s economic transitions, which proved a great success in the global stage and modernized education and research in economics in China, such as those by Professor Xu Chenggang, the Director of the Law and Economics Institute in KoGuan Law School of Shanghai Jiao Tong University.Footnote ⁷³ Other legal scholars, two legal sociologists (Professor Ji Weidong and Professor Liu Sida), and two law and economics scholars (Qiao Shitong and Liu Zhuang) received tenure positions in top universities outside of China,Footnote ⁷⁴ evidencing again the feasibility of this developmental path.

Another possible approach to more fully participating in the mainstream of law and economics studies is for Chinese legal scholars to apply universal analytical tools to target purely domestic issues in the US. Taiwanese property law scholar Yun-Chien Chang is an example: his quantitative study of compensation level in eminent domain in New York has initiated major discussions among property scholars in the US.Footnote ⁷⁵ Such an approach is, of course, more straightforward, but also much more difficult, given the relatively high threshold to participate, in terms of background knowledge of the legal and institutional arrangements and ability to engage local audiences. A middle path more feasible for Chinese scholars would be co-authorship with top law and economics scholars in the relevant fields.