DP4123 A Strategic Interpretation of Legal Transplants
|Author(s):||Nuno Garoupa, Anthony Ogus|
|Publication Date:||November 2003|
|Keyword(s):||game theory, harmonization, K00, legal transplant|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=4123|
In this Paper we provide a strategic explanation for the spontaneous convergence of legal rules, which nevertheless falls short of harmonization across jurisdictions. We identify a free-riding problem and discuss its implications for legal culture, integration, and harmonization. It is argued that harmonization of legal rules by a central authority in order to generate a uniform legal culture could be the response to a coordination failure. It could also be a serious policy mistake, however, leaving everybody worse off. The result depends crucially on the relative benefits and costs of importing and integrating different legal orders.