From instrumental rationality to algorithmic governance: rethinking legal accountability and economic efficiency in AI-driven markets

Abstract

This article critically examines how the integration of artificial intelligence (AI) into labor markets and administrative decision-making challenges the epistemological foundations of the homo economicus and, by extension, the core assumptions of law and economics. Drawing on an interdisciplinary framework that combines legal theory, institutional economics, and the ethics of technology, the study analyzes Argentina as a paradigmatic case of regulatory gaps, labor precarity, and algorithmic governance in a middle-income country. The research demonstrates that the persistence of the rational-agent fiction impedes the emergence of a normative framework capable of addressing distributed agency, structural opacity of algorithms, and the reconfiguration of legal responsibility in socio-technical environments. The article proposes replacing the neoclassical paradigm with a model of hybrid algorithmic governance, grounded in transparency, explainability, meaningful human oversight, and distributive justice. It concludes that without binding regulation safeguarding fundamental labor rights and preventing algorithmic discrimination, AI will exacerbate pre-existing inequalities—particularly in contexts marked by high informality such as Argentine.