"Law and Economics" is an interdisciplinary study that deals with interrelatedness and interaction between the invisible order, "law" and the visible order "economy." An interdisciplinary study comes into being when the existing studies cannot provide explanations and solutions to the political, economic, or social crisis that takes place in modern world. Adam Smith initiated "Law and Economics", when the old order "mercantilism" was being dismantled and replaced by the new order, "industrial capitalism."
From the 19th century and on, law and economics separately have developed as an indepentent self-containg εt self-fulfilling study. During the epochal transformation period from the industrial capitalism to the monopolistic capitalism in the 20th century, scholars start to address the necessity of state intervention in the market and the desirable ways of intervention, which was termed as "the first law and economics movement."
"The Second movement of law and economics" that started in the late 1960s stemmed from the criticism that not only market but government also could fail and the ideology of welfare state generated inefficiency and injustice in the second movement, and scholars started work on market friendly law system as the main subject.
In the 21st century, the paradigm of civilization changed greatly and "the third law and economics movement" is very likely to appear. These are the new research agenda that should be addressed.
The first agenda is related to the progress of globalisation. The division of state and the market is no longer plausible, and for the society to pursue market efficiency as well as justice and equality, we need work on humanization of market and civil education for democracy.
The Second concerns information management. In the era of information, the development of the state and individual welfare depends not on the volume of knowledge and information, but on the ability to create new knowledge and information.
Third is about democratization. In order to make liberal democracy sustainable and stable, both "popularity" and "expertise in state management" of politics should be encouraged through a harmonious balance between popular democracy and elite democracy.
For this, following instruments are required : (1) principle of the "rule of law", (2) parliamentary reform, (3) political neutrality as well as the mastery of national administration, (4) independence of the central bank, (5) Judiciary system reform and (6) anti-corruption reform.
In order for law and economics to gain relevancy in solving the current policy issues, work on the following four topics are needed : ① interaction among different disciplines in social sciences, ② conversation between scholars and practitioners, ③ building reform leadership and ④ study on reform process or reform implementing process.