Comparative administrative law studies the role of administrative law in different legal systems across the world and possibly at the global level. Law and economics brings the economic perspective to such an analysis. The purpose of comparative administrative law and economics is, in the first place, to provide a rational choice theory to explain why features of administrative law vary across jurisdictions. A second goal is to relate these varying features of administrative law to economic performance (as measured by macroeconomic variables or more specific variables such as rule of law, judicial effectiveness, governance indicators or quality of legal institutions). Finally, there is a normative dimension related to the inevitable question of which arrangements or institutions produce better results.

Economic theory has an enormous literature on regulation. At its core, one finds the principal–agent model explaining procurement and regulatory action. In its simplest formulation, the model clarifies the relationship between a principal (the actor with less information) and an agent (the actor with more information). The conflict of interest between the principal and the agent is embodied by agency costs (a standard form of transaction costs, that is, a net loss due to individual opportunism). These costs exist because the agent might use her information advantage to expropriate the principal from his gains, prompting the principal to design mechanisms to limit such opportunism by the agent. Ideally, the principal can find mechanisms (contractual or otherwise) to align the interests of the agent with his own goals.

There are multiple versions of the principal–agent model. Depending on the nature of the principal and/or the agent, principal–agent models are known in literature under different labels, from political economy to public choice theories. Not surprisingly, the application of the numerous insights from this vast literature to administrative law is immediate.

a) Models of administrative adjudication

In a modern economy, there are many disputes between private parties and state agencies. Every country must have a complex system to address such disputes. A quick look around the world shows a variety of ways to address administrative adjudication. In his important article, Asimow (2015) considers five models of administrative adjudication. For example, France and Germany are presented as broadly similar models.