Economic law allows the regulation of foreign investment.
Economic law is the collection of precepts, guidelines and laws that allow state authorities to plan and guide the progress of the economy . Thanks to these regulations, those who administer the State are empowered to direct or direct the activities carried out with the purpose of producing, distributing, exchanging and consuming goods and services.
The rules of economic law – which are part of public law – are usually included in the Constitution and are part of the nation 's legal system. Financial law , tax or fiscal law and commercial or commercial law are related to this branch of law.
Importance of economic law
The importance of economic law is very great in the life of a society. It makes possible the establishment of rules for the regulation of markets and orders various issues linked to microeconomics and macroeconomics .
Thanks to economic law, a government has the necessary legal tools to design and implement economic policies that it considers beneficial to the nation. Fiscal policy , monetary policy , industrial policy , trade policy , agricultural policy and employment policy , among others, can be built on the bases implemented by legislation .
At a general level, it can be indicated that rulers must act within the framework of this area of law when implementing measures that aim to promote economic development. In any case, beyond what is legal, the characteristics of the measures will obey the ideology of the government in power.
Mergers and acquisitions must be carried out as established by economic law.
The subjects
The subjects of economic law are all the people who intervene, in different ways, in the processes of the economy. These may be legal or natural persons whose actions generate legal effects that concern this right.
The State , when establishing trade agreements with other countries; create free trade zones; impose tariffs and import quotas; provide subsidies; decide the nationalization or privatization of companies; or simply through public spending, is one of the main economic actors.
Companies in any sector and consumers are also economic actors and, therefore, subjects of economic law. Obligations and responsibilities, of course, are different depending on each case.
Impact of economic law
The impact of economic law is especially notable in some areas or variables. The State is authorized to set monetary policy through the Central Bank ; In this way, you can establish a fixed exchange rate as a measure to combat inflation , to mention one possibility.
Although liberalism promotes non-intervention of the State in the market and promotes deregulation, it is common for there to be antitrust laws or for the public administration to be in charge of regulating the energy sector or regulating the transportation sector, among others. other key areas. This reality has consequences in multiple daily facets.
The distribution of wealth, economic inequality and unemployment are some of the factors that can be modified by government action, in turn enabled by economic law.
These same regulations are what provide the government with a framework for action to try to achieve economic stabilization or overcome an economic crisis . Economic policy, in short, is carried out in accordance with the law.
When economic reforms are carried out, the rules of economic law must be observed.
Market economy vs. planned economy
The scope of economic law is different depending on the organization of the economy. In a market economy , there is a tendency to let the free play of supply and demand take care of the allocation of resources.
The usual thing is that, in any case, there is state intervention to protect the weakest or most vulnerable sectors and to correct certain situations that are considered negative for the population. Perfect competition , for example, does not usually occur in practice since there is generally some company that has the power to carry out price manipulation.
In a planned economy , on the other hand, the State is directly responsible for the allocation of resources. For this to be possible, there must be an economic right in accordance with this planning claim. In any case, a liberal vision points out that the planned economy always threatens individual freedoms.
Economic law and the economic analysis of law
It is important not to confuse economic law with the economic analysis of law , mentioned in English with the concept of law & economics . This is the name of a current of thought that seeks to use methodological tools and theoretical instruments of economics in the legal field.
The economic analysis of law, therefore, aims to anticipate the effects of laws in terms of economic efficiency. In this way, it seeks to ensure that the design of legal structures is appropriate by virtue of the goal that is intended to be achieved.
Training options
There are several training options in economic law. The Faculty of Law of the University of Navarra and the IESE Business School , for example, offer a Diploma in Economic Law that allows students to acquire knowledge to develop commercial strategies and analyze business situations taking into account the different legal problems that may arise. arise.
The Faculty of Law of the University of Chile , meanwhile, offers a diploma in International Economic Law . Its study plan includes topics such as international trade, intellectual property, foreign investments and customs litigation.