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Interjurisdictional Linkages and the Scope for Interventionist Legal Harmonization

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  • Andrzej Baniak
  • Peter Grajzl

Abstract

We study the desirability of interventionist harmonization of legal standards across multiple, mutually interdependent jurisdictions which strive to adapt law to their local conditions as well as to synchronize it with other jurisdictions. In a setting where jurisdictions are privately informed about their local conditions, we contrast the regime of decentralized standard-setting with two means of interventionist harmonization: through centralization and through allocation of lawmaking authority to a particular jurisdiction. Our analysis illuminates the importance of patterns of interjurisdictional linkages in delineating the scope for, and the appropriate means of, interventionist harmonization. We find that greater jurisdictional interdependence - the hallmark of globalization - per se does not justify interventionist harmonization unless increased interdependence results in notable asymmetries in the pattern of jurisdictional interdependence. We also show that, in the presence of cross-jurisdictional externalities, harmonization is, contrary to conventional predictions, not desirable when local preferences are homogeneous across jurisdictions.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3085.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3085

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Keywords: harmonization; centralization; delegation; cross-jurisdictional externalities; jurisdictional interdependence; globalization;

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Cited by:
  1. Crettez B. & Deffains B. & Musy O., 2010. "On Legal Cooperation and the Dynamics of Legal Convergence," Working Papers ERMES, ERMES, University Paris 2 1013, ERMES, University Paris 2.
  2. Bertrand Crettez & Bruno Deffains & Olivier Musy, 2013. "On the dynamics of legal convergence," Public Choice, Springer, Springer, vol. 156(1), pages 345-356, July.
  3. Yu-Fu Chen & Michael Funke, 2010. "Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy," Dundee Discussion Papers in Economics, Economic Studies, University of Dundee 236, Economic Studies, University of Dundee.
  4. Chen, Yu-Fu & Funke, Michael, 2010. "Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2010-48, Scottish Institute for Research in Economics (SIRE).

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