A Strategic Interpretation of Legal Transplants

Posted: 28 Dec 2005  

Anthony Ogus

University of Manchester - School of Law; Erasmus University Rotterdam (EUR) - Erasmus School of Law

Nuno M. Garoupa

Texas A&M University School of Law; Catholic University of Portugal (UCP) - Católica Global School of Law

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Abstract

In this paper we provide a strategic explanation for the spontaneous convergence of legal rules but which nevertheless, in many instances, falls short of unification across jurisdictions. We identify a free-riding problem and discuss its implications for legal integration. We argue that countries hesitate to adapt their laws to those of another jurisdiction because they hope to free ride on efforts towards convergence. Unification (by transplant) and harmonization (by convention) of legal rules emerge as an obvious corrective intervention to a coordination failure, thus solving the free-riding problem. However, it could also be a serious policy mistake either because convergence is absent due to very high costs of importing and adjustment or due to agency costs.

Keywords: Legal transplant, game theory, convergence, harmonization, unification, agency costs

JEL Classification: C7, K0

Suggested Citation

Ogus, Anthony and Garoupa, Nuno M., A Strategic Interpretation of Legal Transplants. Journal of Legal Studies, Vol. 35, No. 2, 2006. Available at SSRN: https://ssrn.com/abstract=871932

Anthony I. Ogus (Contact Author)

University of Manchester - School of Law ( email )

Oxford Road
Manchester M13 9PL
United Kingdom

HOME PAGE: http://www.law.manchester.ac.uk/aboutus/staff/anthony_ogus/default.html

Erasmus University Rotterdam (EUR) - Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands
+31 -10-408-1585 (Phone)

Nuno M. Garoupa

Texas A&M University School of Law ( email )

1515 Commerce St.
Fort Worth, TX 76102
United States

Catholic University of Portugal (UCP) - Católica Global School of Law ( email )

Lisboa
Portugal

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