LAW & POLITICS RESEARCH JOURNAL
Year:2008 | Volume:9 | Issue:23 (SPECIAL OF ECNOMIC LAW AND ECONOMIC ANALYSIS OF LOW)|Papers Count:7

Economic Analysis of law is a new field of interdisciplinary studies in law which is all new to the Iranian scholars. It needs a clear presentation of its nature, theoretical roots in legal jurisprudence, methodology of analysis and fundamental ideas. This article will attempt to present an overview to these fundamental points with particular emphasis on its jurisprudential roots; the rise and development of the field; rational choice theory as a principal tool for predicting the effects of rules of law; and, finally, efficiency as the criterion for evaluation of rules of law.Economic analysis of law seeks to answer two basic questions about legal rules: what are the effects of legal rules on the behavior of relevant actors? And are these effects of legal rules socially desirable? In answering these positive and normative questions, the approach employed in economic analysis of law is that used in economic analysis generally: the behavior of individuals and firms is described assuming that they are forward looking and rational, and the concept of economic efficiency used in welfare economics.

Law and economics (or economic analysis of law) is a new approach to law for evaluating the efficiency of rules of law and finding the efficient rules. This approach is based on an economic analysis of the costs and benefits of rules of law.According to this approach, people are rational actors and all aspects of their decision making can be predicted through rational choice theory. In other words, people react to legal rules by evaluating the costs and benefits associated with them, making it possible to predict the reaction of people in respect to such rules. We can consider this approach to law as a method of evaluation of rules of law, and not as a new methodology of law. This method has some restrictions for evaluation of rules, especially in the case of rules whose effects are not limited to the economics results and so could not be evaluated by cost and benefit analysis.

One of the most important economic subjects is efficiency issue. Although it stems originally from economics, its utilization has been enlarged in non - economic area as well. The responsibility of this paper is to investigate around such basic subject explaining the efficiency, describing its function in different areas its relationship to welfare criterion and its general applications are among other materials reviewed in this paper. Nowadays, efficiency is used as a general technique in analyzing the performance of so many activities and disciplines as well. Law and economics is one of these growing fields.

Compiling competition law is one of mandatory of the fourth Iranian Socio- Economic and Cultural Development plan. Regarding the article 41 of this plan, the government was bound to formulate competition law to control or eliminate monopolies.In this paper an attempt has been made to answer this question: considering legal and administrative traditions and the stage of economic development, does Iranian economy need a broad or narrow version of competition law.The results of this study indicate that Iranian economy is highly concentrated and is far away from competition condition. In recent researches as well as the current study, state intervention was found as the main cause of monopolization in Iran. It is interesting to note that controlling or eliminating the trade restrictions, abuse of market power and market dominance and unfair trade, which limit access to markets, are among the objectives of most competition laws that have been enacted iri many countries. Economic efficiency, enhancing competition and improving consumer welfare are also considered as objectives of competition law.The evidence from this study suggests that a narrow competition law is appropriate for Iranian economy.

The prime purpose of this Article is to shed light on some aspects of TRIPS and the impact which it may have on the inflow of foreign investment and technology to developing countries. To this end, the Article adopts a broad approach by embarking upon the theoretical exploration of the concept of intellectual property right, its legal implication, and then its economic effect in the developing countries. This is followed by the examination the principles of the Paris Convention and those of the TRIPS.In assessing the economic impact, the Article focuses on the patent rights. Having done so, it concludes that the patent system as a stimulus for R&D activities has been only useful for transnational corporations. This is explicable in the financial and technical risks involved in developing viable products on the one hand, and the problem of expenditure needed for enforcing the patentee's rights on the other. With respect to its role as an incentive for R&D activities it is suggested that such effect has been confined to certain technologies and industries (i.e. pharmaceutical and basic chemical industries). As regards, the causal relation between the existence of patent and the inflow of foreign investment there has been no hard evidence to verify this type of causal relationship. The only limited available evidence shows that the patent effect in this respect is neutral and that, the existence of cheap labour and other economic factors are more influential.The need to facilitate international trading in industrial property rights led to the adoption and coming into force of the Paris Convention. National Treatment, right of priority, independence of patents, and importation of patents constitute the main principles of the Paris Convention. They are designed to ensure that by protecting industrial property rights, international trade is not hindered. However, the speculation that, such exclusive rights might be misused for securing import monopolies and retaining export markets led to the incorporation of a principle under which the patent holder is required to exploit his/her patented technology within a specified period of time; the failure of which would invalidate his/her rights. Yet, in reality, because of the long period needed for achieving such object, this principle has had no. practical implication. The efforts of the developing countries to rectify this defect met with strong opposition from the developing world. The outcome is the introduction of TRIPS agreement.The TRIPS agreement provides for the strengthening of intellectual property rights on a world wide scope accommodating the interests of the developed states. In this respect not only the duration of the patent has been extended to 20 years, but also the ambit of protection has expanded to all types of technologies. This is evident in Section 5 of Part II of TRIPS on Patents. Article 28 of TRIPS is a typical example.Under this Article patent protection is granted not only to patent process but also to. product patent.This is not in harmony with the legislation of most developing countries whose principal purpose, as a step to enhance its technological level, is to confine patent protection to process technology.Furthermore, save the situations where national emergency or circumstances of extreme urgency or cases of public non-commercial use exist, resort to compulsory licensing has been made difficult by the qualification that requirements such as what may be followed must be satisfied: to grant such licenses only if an unsuccessful effort has been made to obtain a voluntary license on reasonable terms and conditions within a reasonable span of time; the requirement to pay adequate remuneration in the circumstances of each case; taking into consideration the economic value of the license; and the requirement that decisions be subject to judicial or independent review by a distinct higher authority. When, one adds the time requirement of Article 5 of the Paris Convention to the afore-said conditions it will not be difficult to see that the application of the compulsory licensing becomes extremely hard, if not impossible.It is worth recording that Article 71 of TRIPS have provided the opportunity for Member States, where they deem it necessary, to review and amend TRIPS. And to this effect in 2003 and 2005 Member States, in particular developing states, were able to do some modification empowering them to forgo some of the restrictions, which hamper their efforts to have recourse to compulsory licensing. While, one may express some optimism to the current waves of development, but one must also be cautious of the fact that for a country to develop, reliance on external sources is not enough and that genuine domestic technological efforts in this respect are extremely crucial.

In acquiring technology from abroad the developing countries face various limitations. Technology transfer contracts often involve restrictive terms and conditions imposed upon recipient countries by the dominant possessors of the technology. These restrictive practices, in the view of developing countries, are unfair and unduly restrictive and prejudicial to their economic development.Restrictive Business Practices (RBPs) are variously defined and there is an exhaustive list of them and each one may insert in transfer of technology agreements in different forms. In this article we shall attempt to analyze the main categories of them and for the purpose of analysis they have been grouped into three broad categories, however, in the end, we will mention some other practices which are out of above mentioned categories but may come into transfer of technology agreements.Attempts to control RBPs were made at different regional and international forums, especially in the UN, to eliminate the various RBPs that were believed to affect international trade.The main subject of this article is definition, categories, impacts of RBPs on economic development of developing countries and national, regional and international efforts to control of RBPs.

Last century has witnessed the emergence and the growth of national economic regulations which are promoted by the widespread and profound changes in social and economic relations in modern societies which require the intervention of state to rectify many failures of the free operation of market forces. As free operation of market forces could fail to achieve justice, efficiency or security within national borders, economic regulation to deal with monopolies, asymmetric information, externalities and where national interest could be compromised in international trade, have been introduced. However, the regulatory theories in the areas of competition law, securities regulation and exchange control make sense only within the national borders and against a national political theory. On the other hand, the process of globalization and internationalization of markets has brought about many forms of international market failures against which the national regulatory regimes could not be easily applied and there is no international regulatory regime acceptable to. all states. The unilateral and extraterritorial application of national regulatory laws, therefore, could lead to conflict of jurisdictions and tension between exercising state and the target state. The paper tries to identify the role which international law could play to accommodate the conflicting interests through the demarcation of the jurisdictional boundaries in a highly integrated and globalized economy.