Evolutionary Models of Corporate Law

Abstract

This chapter first considers resistance to the use of theoretical models, examining tensions between the goals and methodologies of historians and economists who investigate differences in law over time (legal history) or between jurisdictions (comparative law). It then proceeds to define the characteristics of evolutionary models: a family of theoretical models that (in the author’s opinion) are particularly fruitful in exploring changes in law over time. The rest of the chapter examines regulatory competition, an area in which scholarly debate has focused on rival evolutionary models (though the models were not usually described and analyzed as such). Three models – horizontal (state vs. state), vertical (federal vs. state) and intrastate (interest group vs. interest group) – are explored and critiqued.

Keywords: corporate law, Delaware's dominance, evolution, evolutionary model, horizontal competition, interest groups, network effects, path dependence, regulatory competition, vertical competition

JEL Classification: B52, C73, D72, G34, K22, K40, N00, N01, N20, N40