Economic Analysis of Prescriptive Jurisdiction and Choice of Law

Abstract:     
This article establishes a framework for analysis of prescriptive jurisdiction and choice of law problems that draws on law and economics scholarship but is less committed to deregulation than other choice of law work based on law and economics. From property rights theory, this article draws an understanding of the role of externalities and the transaction costs and strategic parameters that influence the structure of property rights. It uses an understanding of regulatory competition theory to supplement this property rights analysis with a sensitivity to the structure and benefits of regulatory competition. It seeks to understand the circumstances under which, in a horizontal setting, "social norms" among states may arise, and it applies the theory of the firm to suggest the circumstances under which social norms may develop an equilibrium superior to more formal organization, or vice-versa. Finally, it examines how the law and economics literature of specific rules and general standards suggests the proper role of courts vis-a-vis legislatures in setting allocations of prescriptive jurisdiction.

Number of Pages in PDF File: 70

Keywords: Jurisdiction, prescriptive jurisdiction, choice of law, conflict of laws, extraterritoriality, regulatory jurisdiction, regulatory competition

JEL Classification: F1, H1, K0, K4, K5

working papers series