Enabling Global Business Transactions: Relational and Legal Mechanisms
CAPITALISMS AND CAPITALISM IN THE 21ST CENTURY, Glenn Morgan and Richard Whitley, eds., Oxford University Press, 2012
26 Pages Posted: 19 Aug 2011 Last revised: 28 Oct 2011
Date Written: June 6, 2011
Cross border economic activities are embedded either in formal subordination to particular national legal systems, a commitment established and structured by nation-states and in practice voluntarily agreed by participants in a contract, or global business deals are enabled by global institutions. The protection of property rights – a basic condition for every economic activity – remains a domain of the nation state whereas contract enforcement is offered by highly diverse institutions created by international agreements or non-state actors like trade associations. The number of such legal and private structures governing international trade increases dramatically every year opening a new field of professional activity for international law firms, arbitrators and consultants. States try to catch-up with this professional expert knowledge by enhanced internationalization of courts, of administrative structures and legal education. Firms, as a reaction to increasing uncertainties in the global market, develop their own governance devices through relational contracts, mergers and long-term forms of cooperation. These developments require a reconsideration of “institutional support” in institutional economics and “contractual certainty” in classical Weberian sociology of law.
Keywords: International Commercial Transactions, Global Law, Enabling Law, Institutions, Varieties of Capitalism, Global Legal Culture, Relational Governance, Max Weber on Calculability, Contractual Certainty
JEL Classification: D81, F23, K12, K20, K4, P11
Suggested Citation: Suggested Citation