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The Choice in the Lawmaking Process: Legal Transplants vs. Indigenous Law

Listed author(s):
  • Grajzl Peter

    (Washington and Lee University Central European University)

  • Dimitrova-Grajzl Valentina

    (Washington and Lee University Central European University)

We develop a model of lawmaking to study the efficiency implications of, and variation in, jurisdictions choices between promulgation of indigenously developed laws and legal transplants. Our framework emphasizes the sequential nature of lawmaking, the ubiquity of uncertainty, considerations about ex-ante promulgation versus ex-post adjustment costs, and the importance of the political context of legal reform. In discerning the patterns of inefficiencies in both transplantation and indigenous lawmaking, we elucidate the role of heterogeneity of interests and adaptability of a legal system. We also find that domestic corruption per se need not justify transplantation of foreign legal models. Our results support the view that local conditions are a crucial determinant of the appropriate path of institutional reform.

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Article provided by De Gruyter in its journal Review of Law & Economics.

Volume (Year): 5 (2009)
Issue (Month): 1 (November)
Pages: 615-660

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Handle: RePEc:bpj:rlecon:v:5:y:2009:i:1:n:26
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  1. Peter J. Boettke & Christopher J. Coyne & Peter T. Leeson, 2015. "Institutional stickiness and the New Development Economics," Chapters,in: Culture and Economic Action, chapter 6, pages 123-146 Edward Elgar Publishing.
  2. Katharina Pistor & Martin Raiser & Stanislaw Gelfer, 2000. "Law and Finance in Transition Economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(2), pages 325-368, July.
  3. Hay, Jonathan R & Shleifer, Andrei, 1998. "Private Enforcement of Public Laws: A Theory of Legal Reform," American Economic Review, American Economic Association, vol. 88(2), pages 398-403, May.
  4. Grajzl, Peter & Murrell, Peter, 2007. "Allocating lawmaking powers: Self-regulation vs government regulation," Journal of Comparative Economics, Elsevier, vol. 35(3), pages 520-545, September.
  5. Frederick Schauer, 2000. "The Politics and Incentives of Legal Transplantation," CID Working Papers 44, Center for International Development at Harvard University.
  6. Casey B. Mulligan & Andrei Shleifer, 2005. "The Extent of the Market and the Supply of Regulation," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1445-1473.
  7. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, February.
  8. Frederick Schauer, 2000. "The Politics and Incentives of Legal Transplantation," CID Working Papers 44A, Center for International Development at Harvard University.
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