Our laws, including the intricate rules that govern the financial sector, are mostly made and operated by lawyers. These professionals have deep expertise in what the rules are, how they should be interpreted, and how to apply these rules to different sorts of fact patterns. However, legal training, both in academia and in practice, does little to prepare lawyers to ensure that the rules they design and operate are effective in guiding human behavior and in preventing and reducing misconduct.

Law-centric view of human behavior

There is an implicit assumption in traditional legal thinking, training, and practice about law’s impact on human behavior. Lawyers are taught a law-centric view of human behavior. They are trained to believe that law matters, and that the language of legal rules comes to guide human conduct. The content of the law determines the costs of different behavioral options. And this is supposed to sway people’s actions. The core implicit belief is that legal incentives drive human behavior.

Legal training does little to prepare lawyers to ensure that the rules they design and operate are effective in guiding human behavior and in preventing and reducing misconduct.

Empirical studies across the social and behavioral sciences, however, provide new insights in how legal rules come to shape human conduct. These studies allow us to understand why some legal rules have been so successful in reducing damaging behavior (such as seatbelt mandates, bans on smoking at work, or water pollution control laws), while others have failed to prevent harm (such as speed limits, alcohol and drug prohibitions, and sexual and gender harassment rules).

This body of empirical work fundamentally questions mainstream legal assumptions about the primacy of law in shaping human behavior. Studies from across legal domains have shown that people have a very poor understanding of the law. Average employees do not know their basic employment contract rights, for instance, citizens do not understand basic tenets of criminal law, and spouses do not understand family law. Even highly trained professionals suffer from major legal knowledge deficits, as school administrators do not know education law, and doctors do not know key aspects of health law and medical liability rules.

Given how large the body of law has become and how complex it is, these findings should be unsurprising. But they force us to question the traditional model of law and human conduct: How can people make an informed choice in response to legal incentives when they do not know or understand the applicable legal rules?

The behavior revolution

Empirical studies question whether legal incentives play a role in shaping human behavior. They find no conclusive evidence that stricter punishment acts as a deterrent against general criminal behavior. There are similar findings for corporate crime, where the evidence is also frustratingly inconclusive. Studies also find little evidence that the ‘soft stick’ of personal liability works to deter damaging or illegal behavior.

These are good examples of the behavioral revolution that the field of law is going through right now. They show how human responses to law are not solely based on a well-informed choice in response to legal rules. Other studies show how an admixture of people’s own morality and the social context in which they operate shapes their compliance or violation of legal rules. Intrinsic motivation is a key aspect of enhancing compliance, and legal incentives can fail when they do not align properly with people’s own motivations.

Behavioral studies also question the notion that people are free in deciding how to respond to the law. Compliance is not just a matter of motivation, but also of context. Some people are better able to follow the law, for instance because they do know it, or because they have better self-control, or because they have better socio-economic circumstances or opportunities. And some people have better opportunities to break the law, for instance because they have access to valuable targets, or because they have the means and expertise necessary to break the rules.

Behavioral jurisprudence

The field of behavioral jurisprudence is synthesizing these insights about law and behavior. It maps the behavioral code, consisting of the motivational and situational processes that shape human conduct and analyses how this is related to the legal code. And, like behavioral economics did for traditional economics, behavioral jurisprudence assesses and corrects traditional legal thinking about human behavior.

Behavioral jurisprudence enables the training of a next generation of lawyers who can act as bilingual coders, with fluency in both legal and behavioral analysis. They will be able to use empirical knowledge and methods to design and operate rules that keep our society and markets safe from harm, at the lowest possible social and financial cost.

This article first appeared in Starling’s Compendium. Please visit Starling Insights to read the fully annotated report.

Adam Fine, Assistant Professor, School of Criminology and Criminal Justice, Arizona State University. Benjamin Van Rooij, Professor of Law and Society, University of Amsterdam School of Law; Director, Center for Law and Behavior.

Starling Insights publishes original research and covers events related to the governance and supervision of cultural, behavioral, and other non-financial risks and performance outcomes.