The foundations of law and economics are best read as a set of institutional questions rather than as a single efficiency formula.
The field begins from a deceptively simple move: legal rules change the costs and benefits of action. That move becomes serious only when it is attached to institutions. Coasean analysis asks whether bargaining is possible and what legal rules do when bargaining is costly. Calabresian accident-cost analysis asks who can prevent, spread, or administer losses at lower cost. Public-enforcement theory asks how sanctions, detection probabilities, and enforcement costs interact. These are not interchangeable arguments; each makes a different institutional problem visible.
A careful reading therefore treats efficiency as an organizing question, not a conclusion. Entitlements, liability rules, property rules, standards, sanctions, disclosure duties, and organizational forms are alternative ways of responding to transaction costs, externalities, information problems, agency costs, and enforcement limits. The field is most useful when it makes those alternatives explicit and least useful when it converts legal judgment into a slogan about markets or incentives.
The later behavioral and institutional turns do not simply reject the older canon. They qualify it. Behavioral work asks whether legal actors perceive and process incentives in stable ways. New institutional economics asks why formal rules operate differently across settings. Together, these materials turn foundational law and economics into a comparative inquiry into courts, markets, firms, regulators, and private ordering.
