The Rise of Juridical Neoliberalism

This chapter seeks to elucidate the significance of law for both neoliberal theory and practice; or, what might be referred to tentatively as juridical neoliberalism. It argues that the significance of law is not just a matter of neoliberal theory; juridical norms are a key instrument used in the neoliberal restructuring of economic governance. The chapter focuses on a particular argument, i.e. a core demand of James Buchanan's constitutional economics, and quickly looks at two other neoliberal thinkers: namely Franz Bohm and Friedrich August von Hayek, and the role that law plays in their approaches. In response to the sovereign debt crisis that was triggered by the original financial crisis the European Union has passed a series of reforms to curtail potentially unsustainable economic/fiscal policies pursued by member states. Among them is the Treaty on Stability, Coordination and Governance dubbed the 'Fiscal Compact' in public discourse that can be considered the equivalent of Buchanan's balanced-budget amendment.