A foundation known for its gifts to conservative causes has made a $10 million gift to Harvard Law School (HLS), the largest grant from a foundation in the history of the school.

The New York-based John M. Olin Foundation, which supports research on social and economic policy, made the gift to the John M. Olin Center for Law, Economics and Business at HLS.

“You’re grateful and you’re happy,” said Rosenthal Professor of Law Steven Shavell, who is founder and director of the center. “I’m hoping we can make this money last a good many years.”

The Olin Foundation has taken a special interest in the relationship between law and economics, having funded similar centers at several other universities for study of the intersection of the two fields. These efforts mark an attempt to introduce free-market thinking into legal scholarship.

“The school has made an impressive commitment to the field of law and economics and has created a very strong program of teaching and research,” said James Piereson, executive director of the Olin Foundation, in a written statement. “We hope this gift will enable the school to build on this record of success.”

Shavell said he hopes to direct some of the funds toward expanding the Olin Center’s student fellowship program.

“It’s extremely successful,” he said of the program, which pays HLS students a stipend to do research in law and economics. “It results in many students going on to teaching positions in the legal-academic world.”

Shavell added that he believes the success of the fellowships in producing professors probably played a role in the size of the grant from the Olin Foundation.

But “the money comes with no strings attached,” he said.

Shavell explained that much of the center’s research examines whether legal provisions lead to economically optimal outcomes.

According to Shavell, a typical question addressed by the center’s researchers—which includes 15 faculty members—is the degree to which a corporation would reduce its pollution when forced to pay damages for it.

“Students become aware of this way of thinking about the legal system,” he said.

HLS spokesperson Michael A. Armini called the size of the gift “a pleasant surprise,” and added that it will be part of a HLS capital campaign starting up next month.

Armini called the grant part of the campaign’s “nucleus fund” because it came before the formal June 14 start date of the fund raiser.

The Olin Foundation, which has made multi-million dollar gifts to HLS in the past, is currently in the process of spending all of its funds before ending operation in 2005.

The foundation has supported its namesake center at HLS since 1985.

—Staff writer Alexander J. Blenkinsopp can be reached at blenkins@fas.harvard.edu.