The Paradox of Legal Harmonization
University of Bologna - Department of Economics
University of Minnesota - Law School; University of Bologna
Public Choice, 2007
George Mason Law & Economics Research Paper No. 05-40
Minnesota Legal Studies Research Paper No. 07-14
The legal landscape is changing, adapting to the global market. Differences between legal systems hinder transnational commerce. Countries reduce legal differences through non-cooperative and cooperative adaptation processes that alternatively lead to legal transplantation or harmonization. Switching costs render unification difficult. Cooperation reduces differences to a greater extent but rarely leads to legal unification. In this paper we unveil a paradox of legal harmonization. When switching costs are endogenous, countries engaging in cooperative harmonization may end up with less harmonization than those pursuing non-cooperative strategies.
Number of Pages in PDF File: 43
Keywords: legal harmonization, legal transplantation, transnational contracts, legal change
JEL Classification: K10, K33, D70
Date posted: December 16, 2005
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