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identify and assess potential impacts that might result from a purposed bill and the

government agency has to perform both assessments based on an empirical and evidence-
based approach. The drafted bill that has passed the strict assessments should be accepted
by the people since the bill has been thoroughly analysed from all perspectives and has

ben subjected to debate and consultation with the relevant stakeholders of each bill.
1.2 Fundamental knowledge on Law and Economics

Law and Economics is an interdisciplinary subject analysing a legal system through
the lenses of economic insights. The economic theories applied in this discipline deals
primary with the ways to explain humans’ behaviors and resource allocation within a market

economy, rather than with mathematical calculations. From an economic point of view, the

law is a tool driving the economic system. When there is a slight change in a legal regime,
the effect can be perceived in the economic realm as well. Fundamental economic theories
that are particularly helpful to the RIA performance are Opportunity costs, Market system.

Pareto Efficiency and Economic modelling.
The crux of economics lies in the selection of the most efficient allocation of limited

resources. To achieve the most efficient allocation, economists rely on a model used to
explain what happens both in economic and social spheres. The model will then be tested
20
against real world cases and will be adjusted to best explicate reality. However, when
using any economic models, users should be aware of the limits of each model and treats
21
them as a map leading to the destination rather than the destination itself. Using
economics models and economic theories as a tool to analyse reality will be like using a
good map leading the final goals.

1.3 Economic and Social Impact assessment techniques
From research on economic and social impact assessment in the law-making process,

the research team would summarise the economic impact assessment techniques and the
social impact assessment techniques as follows;
1.3.1 Economic impact assessment technique

There are five Economic tools that can aid the RIA process, namely the identification and
assessment of policy options and the comparison of the options.

1. Cost-Benefit Analysis (CBA) CBA is the most popular technique used in
RIA. By applying CBA, Costs and Benefits of each policy option would be first calculated to

20
Chayun Tantivasadakarn, Microeconomics :Theories and Applications, (Bangkok: Thammasat University
Press, 2009), p.11.
21 Ibid.