Applying Social Psychology Theories to the Challenges of Harmonising Insolvency Law in the European Union

Abstract

The harmonisation of insolvency law in the European Union has proven challenging. Obstacles such as the protection of national sovereignty, the preservation of legal cultures and a preference for regulatory competition have been studied extensively in the literature. This paper takes a novel approach by providing a perspective from the field of social psychology to further our understanding of the challenges of harmonising insolvency law in the EU. Selected psychological biases are identified, explained and applied to the harmonisation process. Solutions to overcome these biases are also discussed, as it is argued that progress in this area can be achieved by targeting strategies that can overcome these biases.

Keywords: Insolvency law; harmonisation; psychology; theories