As one of the most important developments in the field of legalscience in thesecond half of the 20th century, legal economics originated from institutional economics. The key reason for the great importance attached by economists to the legalsystem is that the history of economic development has clearly demonst rated that it is the institutional factors, rather than technological factors, that determine economic growth. The Kurce theory of transaction and cost has bridged thesystem with transaction, and neo-classical economic theory with economics of law. It has also provided us with a key to understanding legalsystem according to the principle of efficiency as well as theoretical basis for the reform of the legalsystem towards the direction of maximization of efficiency. |