Territoriality of Law and the International Trade Game: Towards a New Institutional Economics of International Transactions
AbstractThe conventional theory of international trade is dominated by a model presupposing a legal order that is perfect in its specifications and controllability, binding for all economic agents, no matter their nationality. World order appears to be cosmopolitan in the sense of Kant. An international private law community such as this, however, does not exist. In fact, there is a multitude of legal orders and a territoriality of law, leading to problems largely neglected in the traditional theory of international trade. They are at the heart of what we would like to call the New Institutional Economics of International Transactions (NIEIT) – a research program which started from a monograph published in 1990 (see Schmidt-Trenz 1990). This paper addresses two questions: Which specific problems emerge in contracts and the contracting process because of factors such as the multitude of legal orders and the territoriality of law? What solutions are there to these problems a) on the level of the law, and b) in the shadow of the law or completely independent of it (?private ordering?)? How do they work from an efficiency point of view? We restrict attention to the international exchange of goods. However, the insights gained can be transferred to other types of transactions, such as international finance transactions, direct investment, and investment agreements. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Saarland University, CSLE - Center for the Study of Law and Economics in its series CSLE Discussion Paper Series with number 2006-06.
Date of creation: 2006
Date of revision:
Contact details of provider:
Postal: Postfach 151150, 66041 Saarbrücken
Phone: *49(0)681-302 2132
Fax: *49(0)681-302 3591
Web page: http://www.uni-saarland.de/fak1/fr12/csle/
More information through EDIRC
conflict of law; international private law; transaction costs; enforcement of judgements; private ordering;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kirstein, Roland & Schmidtchen, Dieter, 1997.
"Judicial Detection Skill and Contractual Compliance,"
CSLE Discussion Paper Series
97-07, Saarland University, CSLE - Center for the Study of Law and Economics.
- Kirstein, Roland & Schmidtchen, Dieter, 1997. "Judicial detection skill and contractual compliance," International Review of Law and Economics, Elsevier, vol. 17(4), pages 509-520, December.
- Kronman, Anthony T, 1985. "Contract Law and the State of Nature," Journal of Law, Economics and Organization, Oxford University Press, vol. 1(1), pages 5-32, Spring.
- Pomery, John, 1984. "Uncertainty in trade models," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 9, pages 419-465 Elsevier.
- Schnitzer, Monika, 2002.
"Debt v. Foreign Direct Investment: The Impact of Sovereign Risk on the Structure of International Capital Flows,"
London School of Economics and Political Science, vol. 69(273), pages 41-67, February.
- Schnitzer, Monika, 1997. "Debt vs. Foreign Direct Investment: The Impact of Sovereign Risk on the Structure of International Capital Flows," CEPR Discussion Papers 1608, C.E.P.R. Discussion Papers.
- Cooter, Robert & Landa, Janet T., 1984. "Personal versus impersonal trade: The size of trading groups and contract law," International Review of Law and Economics, Elsevier, vol. 4(1), pages 15-22, June.
- Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
- S. Illeris & G. Akehurst, 2002. "Introduction," The Service Industries Journal, Taylor and Francis Journals, vol. 22(1), pages 1-3, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.