Research into the economic effects of constitutions received a big boost from Persson and Tabellini (2003). Together with various co-authors, we have used their frame to analyze the effects of various constitutional institutions such as (i) federalism, (ii) direct democracy, (iii) constitutional budget rules, (iv) supreme audit institutions and so on.

More detailed work on these – and other institutions – is desirable. Given that constitutional institutions have important economic consequences, the next step is to ask why different societies choose vastly different institutions. Here, constitutional institutions are, hence, endogenized. Research in this area is in its very infancy and many topics are possible.

Contact: Prof. Dr. rer. pol. Stefan Voigt, University of Hamburg

For flourishing economies, legal certainty is key. For its provision, judicial systems are crucial. Over the past years, a number of studies have appeared that show the significance of single aspects of the judicial system such as judicial independence, judicial accountability or prosecutorial independence. Many areas remain to be analyzed in more depth.

Contact: Prof. Dr. rer. pol. Stefan Voigt, University of Hamburg

Prof. Dr. iur. Heribert Hirte, LL.M. (Berkeley), University of Hamburg

Many international law issues (e.g. climate change, WTO) pose serious problems of international justice, in particular between western societies and developing countries. Traditional economic analysis tends to ignore these issues, as it focuses exclusively on efficiency. However, new concepts are emerging, which try to integrate questions of justice into a new form of economic analysis.

The “capability approach” of Nobel Laureate Amartya Sen might be the most important of these new changes. Questions of intergenerational justice are usually addressed in economic analysis as questions of discounting future costs and benefits. However, they may play a different role within the capability approach. We need a concept of how to integrate the capability approach in a (refined) cost-benefit-analysis. The research in this area is in its infancy and many topics are possible.

Contact: Prof. Dr. iur. Michael Fehling, LL.M. (Berkeley), Bucerius Law School, Hamburg

This is a very young research area. There are a high number of possible topics as first mover advantages into this area are up for grabs. I have been particularly interested in the interplay between national and international factors. In a recent study, it was asked whether countries can improve their credibility by joining more international organizations. The answer is yes. Many related question definitely deserve to be analyzed in depth.

Contact: Prof. Dr. rer. pol. Stefan Voigt, University of Hamburg

There is a long lasting debate between the US and the European Union about the rationality of the precautionary principle. Many scholars in the US (Cass Sunstein and others) oppose this principle (at least in part) and argue to replace it by a cost-benefit-analysis.

The European Union pushes the precautionary principle as a cornerstone of the more general policy of sustainability and of an effective protection of the environment. This controversy becomes relevant e.g. in the international context of climate change mitigation. However, there might be a chance to combine both strategies. There is a lot of literature on these issues but key methodological questions remain unsolved.

Contact: Prof. Dr. iur. Michael Fehling, LL.M. (Berkeley), Bucerius Law School, Hamburg

One core issue of European integration is the establishment of a single (internal) market, which is closely related to the implementation of the four fundamental freedoms (free movement of goods, services, persons and capital). Even though many books and articles have already been published in this field, many questions regarding the interaction of legal norms and economic activities are still open. This refers in particular to the question of the necessity to harmonize quality and safety standards, as well as of private law.

Contact: Prof. Dr. rer. pol. Thomas Eger, University of Hamburg

Prof. Dr. iur. Heribert Hirte, LL.M. (Berkeley), University of Hamburg

This can include the issues of Eurobonds, the decision procedures within the European Stability Mechanism, the procedure of sovereign bankruptcy within the ESM, the legality of open market operations of the European Central Bank to lower interest rates in problem countries and the cooperation of IMF, ECB and the European Commission within the ASM.

Contact: Prof. Dr. disc. oec. Hans-Bernd Schäfer, Bucerius Law School, Hamburg

Prof. Dr. iur. Heribert Hirte, LL.M. (Berkeley), University of Hamburg

Empirical research shows that to initiate growth, investors have to be protected and contracts must be enforced, which can be reached not only with the rule of law but also with so called intermediate institutions. However, to reach the level of a high income country, a sophisticated legal system with independent judges, swift law enforcement and a loyal judiciary seems to be necessary. The study should aim to find out the conditions and prerequisites which enable a developing country to introduce the rule of law.

Contact: Prof. Dr. disc. oec. Hans-Bernd Schäfer, Bucerius Law School, Hamburg

Two contrasting views should be put to the test: Good faith can be a clause which allows courts to re-interpret a contract according to the wealth maximization principle and then be efficiency enhancing. Good faith can also be a clause which redistributes wealth for reasons of social justice. The thesis should try to find out whether in different legal orders the good faith principle serves the first or the second goal or both goals. For this thesis it would be good to have a scholar with some command of Spanish, as it is often maintained that in Latin American countries the good faith principle serves income redistribution.

Contact: Prof. Dr. disc. oec. Hans-Bernd Schäfer, Bucerius Law School, Hamburg

Corporate Governance is the system by which companies are directed and controlled (Cadbury 1992). Based on Agency Theory, interdisciplinary research has helped to develop a better understanding of the control problems for shareholders. From a comparative perspective, we observe a growing convergence of internal governance arrangements. One common development concerns the introduction of a committee structure at the board level and task specific requirements for committee composition. Future research should explore the applicability and/or possible modifications of corporate governance theories with a view to multi-layer agency relationships within boards of modern corporations.

Contact: Jun.-Prof. Dr. iur. Patrick C. Leyens, LL.M. (London), University of Hamburg

Prof. Dr. iur. Heribert Hirte, LL.M. (Berkeley), University of Hamburg

In Europe,insolvency law has been the subject of many past national laws. Continuing integration and the freedom of movement has opened new entrepreneurial options, especially for purposes of restructuring. Defaulting companies are allowed to apply for foreign restructuring proceedings by moving their seat to countries with a more favourable or more flexible legal regime. These options have already been used, for example, by defaulting German companies and their “restructuring migration” to the UK. There is a large body of literature on system competition in general. With a view to corporate insolvencies and possible legal options for rescuing companies, it appears to be a future challenge to duly capture incentive changes for management, owners, and creditors.

Further topics in the subject area of insolvency law concern:

• Insolvency of Company Groups
• The re-distribution of wealth in takeover proceedings
• Lown to own – the interrelationship of Bankruptcy and Capital Market Law

Contact: Prof. Dr. iur. Reinhard Bork, Prof. Dr. iur. Heribert Hirte

The current financial crisis that began in 2008 revealed insufficient bank risk management. It led to insolvencies of banks and caused huge losses for economies. Increasing existing or creating new regulation for banks and markets, like Basel III, or introducing a central counter party for credit default swaps have been obvious reactions. A discussion directed to the more fundamental issues should ask to what extent financial markets and financial institutions can and should be regulated. New regulation must be evaluated against its goals but also against possibilities to circumvention. It seems that simpler regulation can sometimes outperform more refined or new and often more complex rules. With a view to the ongoing debate on the causes of the financial crisis 2008, regulatory attention should be drawn to the possibility of counterintuitive and counterproductive effects. Accounting is one example. Existing rules may lead to counterintuitive effects on profits, i.e. an improving financial condition of a bank can lead to losses due to current accounting rules for liabilities and vice versa.

Contact: Prof. Dr. Markus Nöth, University of Hamburg

Prof. Dr. iur. Heribert Hirte, LL.M. (Berkeley), University of Hamburg

Political and Economic meltdowns, severe natural disasters and protracted armed conflicts challenge the commitment to the rule of law and face the contemporary jurisprudence. Extreme conditions – or the perception of impending grave danger – may pressure organs of the state (as well as powerful non-state actors) to resort to extreme measures. Experience shows that liberal democracies have suspended some basic human rights in times of exigencies. These actions raise the concern whether facing extreme conditions (or the perception thereof), actors are capable of averting the conceptual critique of liberalism launched by Carl Schmitt – and the historical fate of contemporary democracies outlined by Agamben – and nonetheless develop mechanisms to ensure that the underlying principles of the rule of law are maintained? To further investigate, the University of Haifa, Faculty of Law, together with the Institute of Law & Economics, has recently launched the MINVERA CENTER FOR THE STUDY OF THE RULE OF LAW UNDER EXTREME CONDITIONS. Three working groups divided by cause in belligerencies, natural disasters & epidemics, and socio-economic acute crises are formed to generate conceptual and empirical research that will enrich the theoretical understanding of this crucial problem but also contribute to our ability to address it in practice by analysing the existing regulation and putting forward recommendations to improve the norms, procedures and institutions designed to govern emergencies. The integral research approach will encompass the analytical (by advancing the theory and concepts on point), the positive (by examining the actual institutional design and legal regulations in various systems), the normative (by developing tools to enable jurists and agencies to evaluate alternative models of regulation) and the cultural (by analysing societal attitudes) perspective. Therefore the groups will be comprised of jurists, social scientists (economists, sociologists, political scientists, geographers, media and communication scholars), ethicists and other relevant experts and will be in contact and collaboration with central and local policy stakeholders as well as relief-providing agencies. Special attention will be paid to the development of a cadre of young scientists in Israel, Germany, and in other jurisdictions.

Contact: Prof. Dr. rer. pol. Stefan Voigt, University of Hamburg

In the internet age, the need for effective consumer law enforcement has arguably never been greater. The major problems of consumer law in Europe lie with its enforcement; in particular when it comes to rogue traders. Although substantive law is rather similar throughout the EU because of many harmonisation efforts, many different enforcement mechanisms can be found because of the important principle of procedural autonomy. The EU’s legislative powers traditionally have been much wider in substantive law compared with procedural law. However, the EU is also beginning to have an impact on Member States’ enforcement provisions, which traditionally have differed and still do. Very broadly speaking, some countries focus on public law enforcement and others on private. Economic analysis of law enforcement has shown that public and private enforcement schemes clearly each have a number of strengths and weaknesses and scholars have stated that the optimal solution might be to create a mixture of public and private enforcement that draws upon their comparative advantages. This mix will need to vary for different consumer law problems. Current legislative initiatives at the European level concern collective redress and alternative dispute resolution, as well as online dispute resolution. At the European Consumer Summit 2013, Tonio Borg, Commissioner for Health and Consumer Policy, stated, ‘This year we will focus on stepping up the enforcement of EU consumer legislation, one of the key priorities of the European Consumer Agenda that the Commission adopted in May 2012.’ The issue therefore remains topical for the European Union and consequently each Member State, and analysing its contingencies from a law and economics perspective is crucial.