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Abstract:
This paper challenges the conventional wisdom that unification and harmonization of international commercial law is desirable and should be pursued. Drawing from the literature on private legislatures, it argues that the expert groups that produce international conventions and model laws are likely to produce either vague norms that impose no significant constraint on domestic decisionmakers, or precise rules that benefit discrete interest groups. It illustrates this argument with examples from the Hague and Hamburg Rules, the Warsaw Convention, the Convention on the International Sale of Goods, the Uniform Customs and Practice for Documentary Credits, and the UNCITRAL Model Law on Cross-Border Insolvency. It advances arguments for an alternative regime of expanded contractual choice to select national law to govern these transactions.

Abstract:
This paper draws on strategic trade theory to explore the conditions under which different national competition law systems can compete. I assume that each state seeks to maximize a weighted sum of producer and consumer welfare within its territory, the weighting in turn reflecting public choice considerations. I further assume the tolerance or promotion of inefficient forms of inter-firm cooperation and monopolization discourages investment in the protected economic sector and makes it less likely that firms in that sector will innovate.

Working within these assumptions, the question becomes whether states have sufficient incentives to discourage inefficient inter-firm cooperation and monopolization in cases where foreign consumers bear the lion's share of the costs of monopoly rents. In a static model, individual states should prefer such arrangements, resulting in a collective action problem due to global losses of welfare. If, however, protected economic sectors bear a sanction in the form of higher costs of capital and lower rates of innovation, the collective action problem may dissipate. The critical question thus becomes the strength of the assumption that private or state-sponsored protection reduces incentives for investment and innovation.

Strategic trade theory also addresses the institutional conditions for governments to engage in successful protection. I argue that the tolerance of organizational combinations that reduce global welfare but produce local benefits is simply one aspect of such protection. The core common problem involves governmental capacity to distinguish industrial structures that advance efficiency from those that reflect rent-seeking. In trade law, one asks whether governments should protect local industries to promote positive externalities. In competition law, the symmetrical question is whether governments should sanction foreign industries to deter negative externalities.

I conclude by considering governmental capacity to pick industrial winners and losers. The empirical case for governmental success at distinguishing efficiency-enhancing from rent-seeking industrial structures is mixed at best. Moreover, the instances where the distinction seems easiest to make - cartelization of primary products - more often involve greater governmental involvement in the promotion of inefficient industrial structures than in their dismantling. The implication of this evidence is that it is plausible to assume that protection resulting from competition policy, like protection produced by governmental intervention, does deter investment and innovation and thus contains its own punishment.

Abstract:
This article contributes to the "arrival of history" in constitutional scholarship and the revival of foreign affairs jurisprudence in the legal academy. I contend that the so-called "modern" position on the status of international law as federal law - today's received wisdom - changed substantially between the time of its first authoritative articulation in 1972 and its enshrinement in the first tentative draft of the Third Restatement on the Foreign Relations Law of the United States in 1980. I relate these changes to broader jurisprudential, political, and international developments in the period between those events. I seek to demonstrate that a strong statement of the modern position reflected the assumptions and anxieties of a precise historical moment. As that moment has passed, we can question whether the position has much to say to the present moment. An era defined by the September 11 attack on the United States and the government's response seems unconnected to the anxieties and assumptions that underlay the modern position.

Abstract:
I contend that the so-called "modern" position on the status of international law as federal law - the claim that customary international law constitutes federal common law and informs the scope of constitutional protections of individual rights - changed substantially between the time of its first authoritative articulation and its enshrinement in the first tentative draft of the Third Restatement on the Foreign Relations Law of the United States. I relate these changes to broader jurisprudential, political and international developments in the period between those events. I seek to demonstrate that a strong statement of the modern position reflected the assumptions and anxieties of a precise historical moment. As that moment passed some time ago, I suggest, we can question whether the position has much to say to the present moment.

Abstract:
This article argues that proponents of international regulatory cooperation need to confront the welfare losses that might occur due to missed opportunities for cooperative regulatory competition. Cooperative regulatory competition takes places when jurisdictions agree to honor formal and manipulable choice-of-law rules, such as contractual choice, the place-of-incorporation rule, and the territoriality principle, that enable persons engaged in international business to pick regulatory systems that will govern their transactions. I review current opportunities for this kind of competition with respect to securities regulation, bankruptcy, intellectual property, and antitrust. I then discuss the substantive case for maintaining or expanding these opportunities in light of potential benefits from "races to the top." I base my argument partly on new research by cognitive psychologists on "fast and frugal heuristics." This research undermines arguments against respecting individual choices that have dominated much of the discussion about regulation in the legal academic literature over the last fifteen years.

Abstract:
This paper uses the new literature on norms and rationality to explore why societies develop widespread corruption as a means of organizing economic activity. Paying particular attention to the post-socialist world, it explores the evolution of these norms as part of a more general development of flexible responses to rigid assignments of property rights. The emergence of a strong norm against attending to formal legal rules makes the unwinding of such "corrupt" practices and expectations especially problematic.

Abstract:
International law provides an ideal context for studying the effects of freedom from coercion on cooperative behavior. Framers of international agreements, no less than the authors of private contracts, can choose between self enforcement and coercive third-party mechanisms to induce compliance with the commitments they make. Studies of individual contracting provide some evidence that coercive sanctions may crowd out self enforcement, implying that too great a propensity by external actors to intervene in the contractual relationship may produce welfare losses. We explore the possibility that too much coercive third-party enforcement similarly can reduce the value of international agreements.

We argue that, in spite of the obvious differences between state and individual decisionmaking, enough similarities exist to make the inquiry worthwhile. Using analytic moves worked out in the context of private contracts, we make two general claims about international agreements, one conventional and one controversial. First, we maintain that one usefully can evaluate efforts to frame and implement international agreements in terms of optimal enforcement structure. Choosing from a broad range of normative criteria, one still can distinguish between better and worse enforcement strategies. Second, we argue that the optimal enforcement structure for any particular international agreement will depend on both the goals of the agreement and the context in which it designed and implemented. Because these goals and contexts are diverse, the set of optimal enforcement structures is heterogenous. Some optimal enforcement structures will depend largely on self enforcement, while others will not.

Central to our claim is an appreciation of the interaction of self enforcement and third-party coercion including binding arbitration, use of international courts, and enforcement by domestic actors. We maintain that in a far from trivial number of instances subject to international agreement, self enforcement and coercive enforcement may be rivalrous and the optimal enforcement structure would preclude or limit coercive enforcement. In particular, we argue that good theoretical arguments buttress the general tendency of domestic courts not to extend their coercive powers to implement an international agreement without a clear signal from the framers of the agreement that this coercion is desired.

Contracts, law and economics, international law, international trade

Abstract:
I compare two competing accounts of the U.S. role in the global economy. In one version, the United States has built an international system that replicates its ideology, culture and values. This is a unipolar world where the actors have taken off the table fundamental choices about political and economic structure, and a broad range of policy choices reflect Washington's preferences. The United States may not make every meaningful decision in administering the world economy, any more than the headquarters of a multinational corporation dictates precisely what its local managers must do. But, in this scenario, the United States has final say on all questions that significantly affect its interests. I will call this the hegemon story.

The contrasting account depicts the United States as a passive instrument subject to forces outside its control. The identification of these forces varies, but often they are seen as some combination of large multinational corporations and international technocrats. The regime may advance some interests of the United States, at least in the sense that it produces better outcome than would genuine international anarchy. But where the goals of the regime conflict with national interest, the regime prevails. This I will call the regime story, because it asserts that some broader regime limits U.S. action.

I believe that regimes count for a lot, and that U.S. hegemony has been greatly overstated. There are many way to advance this position, but I concentrate on one. I look at three WTO dispute resolution opinions involving the United States, two of which attacked U.S. law and the third of which sought to vindicate the interests of U.S. producers against Japanese trade barriers. I explore in some detail how these decisions both frustrate important U.S. policies and make it more difficult for the United States to organize and maintain a geopolitical hegemony. I then consider whether the apparent thwarting of U.S. objectives in the three cases represents a real constraint on U.S. power and influence. I draw on political economy and institutional economics to frame an argument that the WTO dispute resolution system really limits U.S. discretion. The usual rejoinder to any characterization of an international institution as limiting national behavior is that international bodies lack the power and ability to deter states, and in particular a superpower, from determining their own course. A variation on this argument is that the justifications for the resolution of a dispute-in this case the opinions written by the WTO organs-bear little relation to the underlying basis of the resolution and thus provide little information about how future disputes will come out. Finally, it might be that the U.S. government has used the WTO dispute resolution process to deflect domestic political pressures that interfered with objectives preferred by policy elites. I explore the possibility that the WTO only insulates the Washington consensus from the U.S. heartland. I conclude by acknowledging the difficulty of proving that any law-like norm actually constrains a willful actor, but also by maintaining that the evidence that the WTO exercises a capacity to displace decisionmaking otherwise made in Washington remains suggestive if not fully persuasive.

Abstract:
This paper will be published in the Georgetown Law Journal as one of two responses to an essay by Andrew Guzman on the law and economics of choice of law. Guzman offers a welfare analysis that advances the analysis of allocation of regulatory jurisdiction. He criticism of traditional modes of expounding choice of law doctrine is, if anything, insufficiently damning. I argue, however, that by failing to take public choice factors into account, Guzman's normative analysis may place too great confidence in the ability of multilateral, multi-tasked organizations such as the WTO to coordinate the allocation of regulatory jurisdiction.

Abstract:
In this paper, forthcoming in the Virginia Law Review, I explore the role of litigation as a policy-making and rule-generating process in the context of a democratic republic. In democracies, legislatures redistribute wealth, rights, and privileges; debate rages over the direction of this redistribution and its desirability, but not about its existence. Given the openness of the legislature to redistribution, should a society also dedicate its judicial system to revising existing legal arrangements? Do particular kinds of redistributive litigation raise distinct concerns that justify doctrinal innovation and extension? The emergence of large, government-sponsored lawsuits as a means of imposing sanctions on controversial, but heretofore authorized practices, such as the manufacture and sale of cigarettes and firearms, indicates the significance of these issues, as do recent developments in international arbitration. I argue that the creation of some obstacles to such litigation is justified, but only to the extent that the institutional features of such litigation expose outsiders to exceptional risks.

Abstract:
This paper examines the interplay between intellectual property rules and forces driving globalization in the world economy. It argues against the view that multilateral enforcement of standardized intellectual property rules offers the greatest promise for further development. I argue that standardization obtained through international institutions such as the World Trade Organization or the United Nation's World Intellectual Property Organization offer rent-seeking opportunities to affected industries. The drive toward a collective outcome, and particularly the linkage between intellectual property harmonization and cooperation on other issues, undermines the ability of dissenting governments to withhold approval. Nor does judicially developed harmonization hold out much promise. Instead, I argue, local autonomy in developing intellectual property rules and private party autonomy in choosing intellectual property regimes can work in tandem as a regime most likely to enhance the welfare benefits of these rights.

Abstract:
Over the last two decades international law has gone from something that, in the eyes of many outside the discipline, seemed a contradiction in terms, to a source of genuine and direct conflict with domestic legal institutions. This change has three sources: the internationalization of everyday life in the United States; the emergence of international human rights law; and the growth of international institutional governance of economic matters. Two kinds of constraints on domestic lawmaking have emerged: Many advocates contend that international customary law constitutes the law of the United States and therefore binds all levels of government, absent a positive Act of Congress to the contrary, and the various international institutions increasingly reach decisions that overrule policy choices made by domestic political bodies. Each constraint represents a challenge to American democracy, but the nature of the challenge differs. The claim that customary international law constitutes U.S. law rests on authoritarian premises and invites a principled rejection based on assumptions about democracy. The limits imposed on the United States as a result of international entanglements deliberately entered into derives from considerations of political economy, and the response, if any, should involve changes in the processes that produce such entanglements. I conclude with a discussion of the International Criminal Court, an institution intended to enforce human rights law that the U.S. government helped to design but now has decided not to submit to.

Abstract:
I discuss the roles of adjudication bodies in promoting the unification of law. Then I clarify the redistributive dimensions of unification projects. Working within the familiar framework of game theory as applied to international relations, I distinguish between the coordination and defection problems that underlie most international interactions. I argue that adjudication bodies have the ability to generate solutions to some coordination problems, but face major obstacles when seeking to implement stable solutions to others, and to many defection problems. The difficulties vary depending on the types of adjudication bodies involved, but each type has its own drawbacks. I offer examples from a range of current unification projects - carriage of goods, antitrust, and environmental law - to illustrate how application problems can frustrate unification.

Abstract:
I address two parallel and paradoxical trends involving U.S. litigation and international law. I describe how U.S. courts have sought to widen their influence over the provision of succor to foreign victims of cruelty and injustice. I argue that a desire to increase the capacity of U.S. judges to instruct the world explains, at least in part, these developments. I then review how international arbitral bodies have had new opportunities to scrutinize the fairness and efficacy of civil litigation in the United States, and have tended to find our civil process wanting.

These cases also implicate two other issues. Many have questioned the wisdom of international commitments that submit U.S. civil practice to the scrutiny of independent arbiters. Doubts also exist about the willingness of U.S. courts to enforce arbitration awards that compensate for perceived failures in U.S. litigation. How one addresses these issues turns largely on how one regards the tension between the ambition of U.S. courts and the critique embedded in the arbitration proceedings.

I proceed from these descriptive tasks to the development of alternative idealizations of judicial function. I offer two stylized accounts of what a civil litigation process might set out to do. What I will call the expressive function involves a deliberative process that engages more than the parties to the suit. What I will call the distributive function involves a contest among the parties before the court over the assignment of discrete interests, duties, powers, immunities and rights. I then explore the different implications of these functions for the judiciary's posture toward the Executive and Congress. I argue that the expressive function does not require a distinction between the judiciary and other branches of government, as the engagement in deliberative discourse has only an accidental connection to the medium of the lawsuit. The distributive function, by contrast, suggests a distinct role for the judiciary and thus invites consideration of how the operation of the political branches might restrict the scope of judicial activity.

Abstract:
This paper traces the connections between the principal developments in Soviet law between 1945 and 1991 and the ongoing struggle with the West, in particular with the United States. It argues that domestic concerns played a larger role than did superpower competition in shaping the legal policies that emerged during this period. It questions the impulse to see symmetries in the evolution of legal institutions in the two countries.

Abstract:
This article has a simple hypothesis: Selectivity in international law increases as international relations become more symmetrical. Conversely, international law becomes more universal as asymmetry grows. This relation holds true during the modern period. Its existence in turn supports the theoretical claim that the content of international law reflects the rational interests of those actors that make it.

Consider first international relations. A simple narrative, seriously incomplete but good enough for present purposes, would go something like this: From the end of World War II to the collapse of the Soviet empire a bipolar superpower competition dominated international relations. There followed a period of U.S. hegemony, but more recently significant Chinese, European, Indian and Russian challenges to the United States have complicated that structure. The details do not matter, neither the dates, nor the extent of U.S. hegemony when it existed, nor the number of the new great powers, nor the precise relative influence of each. What matters is that the basic structure of international relations underwent a transformation in the latter part of the twentieth century and now appears to have changed again.

Next consider competing trends in international law, that toward universality and that toward selectivity. Universal international law applies equally to all states. Selective international law means that states vary in what rights and obligations they recognize as well as how to allow them to be enforced. In the extreme case of selectivity the content of international law and its enforcement depends entirely on the identity of the state in question. If the recognition of international law reflects the rational interests of states, then international law should trend toward universality during times of hegemony and toward selectivity during periods of multipolar great power competition. Conversely, if international law does not conform to this pattern, then something other than the rational interest of states must explain its content. Much more is going on, of course, but this simple hypothesis suffices to ground an inquiry into the nature of international law as a creature of, and dependent on, international relations.

Developments in international law since World War II are consistent with the claim that selectivity increases as international relations become less asymmetrical.

international law, international relations

Abstract:
This essay, a chapter in a book on international investment law and comparative public law forthcoming from Oxford University Press, reviews the applicability of international investment law to tax administration and enforcement. It begins with a review of the principles of international investment law that are relevant to the assessment and enforcement of municipal tax imposts. It then explores tax administration practice in a variety of states. This overview seeks to achieve two results. First, as an inductive matter it use state practice to sketch a baseline of common, and presumably acceptable, administrative practices. An investor normally should be deemed to expect a state to employ administrative practice that reflects the exigencies of tax assessment and collection and the reasonable need of the administrator for flexibility and dispatch. Second, the review highlights ways in which common practices can be perverted to impair investments, rather than to advance the appropriate revenue goals of the state.

At the end of the day, the line between acceptable discretion and perversion of tax administration to get around obligations to foreign investors remains blurred and debatable. This chapter represents a first step at illuminating the problem and the countervailing arguments. It concludes with a modest prospectus for future research.

Abstract:
The Supreme Court's decision in Medellin v. Texas has attracted great attention and much criticism from international law specialists. It is unclear, however, how much the opinion constrains future judicial decisions. This article addresses two issues that the Court did not resolve. It argues that, as a general manner, the claim that U.S. courts should accord comity to the decisions of international tribunals rests on a false premise, namely that international tribunals have the capacity to engage in reciprocal relations with domestic judiciaries. Second, the Court has not fully considered in what manner a treaty might delegate authority to the Executive to engage in lawmaking, and what factors a court might depend on to determine that such a delegation has occurred.

Abstract:
In Swift v. Tyson, Justice Story argued that federalization of the law of negotiable instruments was necessary to thwart local courts from adopting rules that favored local interests at the expense of national welfare. Variations of this argument have been embraced by modern proponents of federalizing many aspects of international law, including customary international law. The argument proves too much, and fails to take account conditions where local decisionmakers have an incentive to reach globally optimal outcomes. The law of negotiable instruments illustrates this point: State law now occupies this field but, contrary to Story's concern, the law in the United States is uniform and stable. Two international conventions currently under negotiation, the Hague Child Support Convention and the UNCITRAL Electronic Commerce Convention, provide further examples of cooperation without mandatory federal oversight.

international law

Abstract:
The case for international cooperation in competition policy is weaker than commonly thought. First, the lion's share of international transactions (the only kind for which international cooperation is relevant) involves industries for which there is no clear consensus about optimal industry structure. Second, there are strong theoretical reasons why states would exploit all forms of regulation, including competition regulation, to benefit incumbent producers to the cost of consumers. Third, the historical record demonstrates that states have invoked competition policy exactly in this manner. Fourth, arguments that competition regulators can gain solidarity and increased leverage against their domestic adversaries through strengthened international cooperation do not withstand scrutiny.

Abstract:
Based on governance-related criteria, this article provides an empirical jurimetric verification of how, where, when and why alternative dispute resolution (ADR) mechanisms provide efficiency-enhancing channels to redress grievances in less developed countries. Based on data collected in 16 developing jurisdictions through a representative sample of poor rural households, the analyses identifies criteria within which ADR enjoys a comparative advantage over court-based formal dispute resolution procedures. The piece further addresses comparative and competitive aspects of formal versus informal dispute resolution and provides policy recommendations in order for the state to assimilate lessons drawn from the functioning of informal mechanisms.

alternative dispute resolution, judicial reform, legal reform, economic development, corruption, organized crime, judicial effectiveness, selectivity, processing capacity, case management, cost-benefit

Abstract:
Based on governance-related criteria, this article provides the empirical jurimetric verification of the how, where, when and why alternative dispute resolution (ADR) mechanisms provide efficiency enhancing channels to redress grievances in less developed countries. Based on data collected in 16 developing jurisdictions through a representative sample of poor rural households, the analyses contained in this paper identifies criteria within which ADR enjoys a comparative advantage over court-based formal dispute resolution procedures. The piece further addresses comparative and competitive aspects of formal versus informal dispute resolution and provides policy recommendations in order for the state to "assimilate" lessons drawn from the functioning of informal mechanisms.

Justice, judicial reform, corruption, alternative dispute resolution, courts, corruption

Abstract:
When a government contracts with a private firm to supply a service previously supplied by the government, questions arise as to whether the private firm benefits from immunities that previously applied to government actors. In Richardson v. McKnight, the Supreme Court held that the employees of a private prison operator did not enjoy the immunity from section 1983 liability that normally is available to government actors. The Court recognized that resolution of this issue invokes assumptions about the incentives government and private firms face when supplying a particular service, but did not pursue the implications of the incentives that it assumed did apply, and failed to distinguish assumptions it had embraced in an earlier privatization case. We recognize that the privatization of governmental functions rests on contractual arrangements between governments and firms. We thus explore the consequences of different assumptions about what motivates the government actors who draft the terms of contracts for firms to supply public goods. Across a wide range of situations, and under different assumptions about motivation, these contracts are likely to provide for immunity. Nevertheless, we conclude that, under certain assumptions about the motivations of government actors, it would be appropriate to enforce a liability default rule. Such a rule may force government actors and the firms with which they contract to supply to the general public information that the contracting parties would otherwise keep private and that would generate inefficient contract terms.