Jurisdictional Competition and Legal Innovations
Posted: 10 Jun 2013
Date Written: May 21, 2013
Governments can be slow, incompetent, and vulnerable to corruption and other forms of illegitimate favoritism. Under such circumstances, one might expect little by way of productive innovation in public institutions, including law. However, competitive forces play an essential role in legal innovation, just as they play an important role in other forms of innovation. Where these competitive forces are present, mobile individuals and businesses can wield substantial political power. Although such forces can be muted in the context of governments, states compete for jobs, business opportunities, tax revenues, and other forms of wealth, and local interest groups, including local lawyers, can help mobilize the state toward innovative reforms designed to attract such wealth. To be effective, often only a few nation-states need actively compete. Jurisdictional competition can create harmful pressures on the content of laws, to be sure, but as a positive matter it often is a necessary precursor to legal reform. My talk will discuss several examples.
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