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The division of labor is limited by the extent of the law

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  • Dieter Schmidtchen
  • Hans-Jörg Schmidt-Trenz

Abstract

The present paper starts from the observation that there is still no analysis of private law as a basis for international trade, i. e. private transactions between noncompatriots (cf. Schmidt-Trenz 1990). Although authors like Buchanan, Hayek, Williamson, Böhm and Eucken have talked about the significance of a system of private law for the coordination of private transactions, they left out of their analysis the domain of protective state activity in international private business transactions vis-à-vis the multitude of legal orders and national enforcement organs. p ]It is the intention of this paper to focus upon the problems of the coordination of private foreign trade activities in the shadow of the territoriality of law. Specifically, it is asked: What are the causes for the fragmentation of private law in the world, and what are the consequences of the territoriality of law for the coordination of decisions concerning transactions between non-compatriots? The paper also deals with the question of how international coordination-efficiency can be fostered by international constitutional policy. Copyright George Mason University 1990

Suggested Citation

  • Dieter Schmidtchen & Hans-Jörg Schmidt-Trenz, 1990. "The division of labor is limited by the extent of the law," Constitutional Political Economy, Springer, vol. 1(3), pages 49-71, September.
    • Handle: RePEc:kap:copoec:v:1:y:1990:i:3:p:49-71
    DOI: 10.1007/BF02393240
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    References listed on IDEAS

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    1. repec:mhr:btrord:urn:isbn:9783163444805 is not listed on IDEAS
    2. Hans-Jörg Schmidt-Trenz, 1989. "The state of nature in the shadow of contract formation: Adding a missing link to J.M. Buchanan's social contract theory," Public Choice, Springer, vol. 62(3), pages 237-251, September.
    3. Kronman, Anthony T, 1985. "Contract Law and the State of Nature," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 1(1), pages 5-32, Spring.
    4. Friedman, David, 1977. "A Theory of the Size and Shape of Nations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 59-77, February.
    5. Furubotn, Eirik G & Pejovich, Svetozar, 1972. "Property Rights and Economic Theory: A Survey of Recent Literature," Journal of Economic Literature, American Economic Association, vol. 10(4), pages 1137-1162, December.
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    Cited by:

    1. Justus Haucap & Christian Wey, 1999. "Standortwahl als Franchisingproblem," CIG Working Papers FS IV 99-08, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    2. Kirstein, Roland & Schmidtchen, Dieter & Neunzig, Alexander R., 2004. "Conflict of law rules and international trade : a transaction costs approach," CSLE Discussion Paper Series 2004-01, Saarland University, CSLE - Center for the Study of Law and Economics.
    3. Schmidtchen, Dieter & Neunzig, Alexander R. & Schmidt-Trenz, Hans-Jörg, 2001. "One Market, One Law: EU Enlargement in light of the economic theory of optimal legal areas," CSLE Discussion Paper Series 2001-03, Saarland University, CSLE - Center for the Study of Law and Economics.
    4. Vanberg, Viktor, 1990. "A Constitutional Political Economy Perspective on International Trade," 1990: The Environment, Government Policies, and International Trade Meeting, December 1990, San Diego, CA 50875, International Agricultural Trade Research Consortium.

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