The Diffusion of Legal Innovation – Insights from Mathematical Modeling

Abstract

Do countries adopt legal rules due to independent, top-down processes, or, do laws spread among nations in a manner that resembles the diffusion of new products and innovations in a social network? We empirically examine this question by employing an influential mathematical model based on sociological diffusion theory and frequently used for analyzing the diffusion of innovations (the Bass model). Our findings indicate that more often than not, the temporal diffusion of legal rules displays a good fit to the Bass model, and suggest that this model can provide new insights in studying the diffusion of laws. Particularly, applying the Bass model to legal diffusion allows quantifying the influence that countries and states exert on each other in the adoption of specific rules, provides a metric for comparing diffusion processes across different legal branches, allows to tentatively predict the ongoing spread of specific rules, and sheds light on several debates in the areas of comparative, corporate, and international law.

Keywords: Diffusion of Innovation, Diffusion of Laws, Bass Model, Mathematical Modeling, Legal Innovation, Social Contagion, Law and Networks, law and STEM, Comparative Law, Legal Unification, Corporate Law, International Law

JEL Classification: C61, M31, O21, O29, O33, O35, O38, Z13