IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Law and economics of the European multilingualism

  • Aurélien Portuese

    ()

Registered author(s):

    The economics of language applied to multilingualism in the European Union (EU) has only recently come to the fore. Languages economics and Law and Economics disciplines both emerged in the 1960s. However, no study has, hitherto, linked these disciplines. This paper intends to fill that void. Language barriers are the last major remaining barriers for the EU’s ‘single’ market. The lack of coordination of multilingualism in the EU stems from a taboo crystallized by a dilemma between economic efficiency and linguistic diversity—i.e., the maximization of wealth versus the maximization of utility. The EU Member States (MSs) do not hasten to coordinate their language policies at the EU level inasmuch as they overestimate the benefits of the current EU multilingualism while drastically underestimating its costs. Coordination shall occur when MSs evaluate the costs and benefits of the current EU multilingualism. This will uncover the aforementioned dilemma, that will only be resolved when both Law and Economics are applied. In pursuing this objective a “Linguistic Coase Theorem” adapted from the work of Parisi and the Nobel Prize winner, Ronald Coase is elaborated. Having outlined the basic notions deriving from the EU Law of Languages and the Economics of Languages (Introduction), the paper scrutinizes the costs and benefits incurred by the current non-coordinated EU multilingualism (Part I). Subsequently, a ‘Linguistic Coase Theorem’ is elaborated in order to reach a Pareto-optimal outcome, thereby solving the dilemma—both economic efficiency and the linguistic diversity being enhanced (Part II). Copyright Springer Science+Business Media, LLC 2012

    If 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.

    File URL: http://hdl.handle.net/10.1007/s10657-010-9171-1
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Springer in its journal European Journal of Law and Economics.

    Volume (Year): 34 (2012)
    Issue (Month): 2 (October)
    Pages: 279-325

    as
    in new window

    Handle: RePEc:kap:ejlwec:v:34:y:2012:i:2:p:279-325
    Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100264

    References listed on IDEAS
    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.:

    as in new window
    1. Barry Chiswick & Paul Miller, 2007. "Computer usage, destination language proficiency and the earnings of natives and immigrants," Review of Economics of the Household, Springer, vol. 5(2), pages 129-157, June.
    2. Elizabeth Hoffman & Matthew Spitzer, 1981. "The Coase Theorem: Some Experimental Tests," Discussion Papers 470, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    3. Harold Demsetz, 1981. "Barriers to Entry," UCLA Economics Working Papers 192, UCLA Department of Economics.
    4. Melitz, Jacques, 2008. "Language and foreign trade," European Economic Review, Elsevier, vol. 52(4), pages 667-699, May.
    5. Harhoff, Dietmar & Hoisl, Karin & van Pottelsberghe de la Potterie, Bruno, 2009. "Languages, Fees and the International Scope of Patenting," CEPR Discussion Papers 7241, C.E.P.R. Discussion Papers.
    6. Victor Ginsburgh & Shlomo Weber, 2005. "Language disenfranchisement in the European Union," ULB Institutional Repository 2013/5263, ULB -- Universite Libre de Bruxelles.
    7. Stephen Machin & Kjell G. Salvanes & Panu Pelkonen, 2012. "Education And Mobility," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 417-450, 04.
    8. Bruno van Pottelsberghe, 2008. "The London Agreement and the cost of patenting in Europe," Working Papers 264, Bruegel.
    9. French, Kenneth R & Poterba, James M, 1991. "Investor Diversification and International Equity Markets," American Economic Review, American Economic Association, vol. 81(2), pages 222-26, May.
    10. GINSBURGH, Victor & PRIETO-RODRIGUEZ, Juan, 2007. "Returns to foreign languages of native workers in the EU," CORE Discussion Papers 2007021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. Pierpaolo Battigalli & Giovanni Maggi, 2003. "Costly Contracting in a Long-Term Relationship," Working Papers 249, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    12. Richard Baldwin, 1989. "The Growth Effects of 1992," NBER Working Papers 3119, National Bureau of Economic Research, Inc.
    13. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
    14. Bruno van Pottelsberghe de la Potterie & Didier François, 2009. "The Cost Factor in Patent Systems," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 329-355, December.
    15. Jody Evans & Felix T Mavondo, 2002. "Psychic Distance and Organizational Performance: An Empirical Examination of International Retailing Operations," Journal of International Business Studies, Palgrave Macmillan, vol. 33(3), pages 515-532, September.
    16. Yadong Luo & Mike W Peng, 1999. "Learning to Compete in a Transition Economy: Experience, Environment, and Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 30(2), pages 269-295, June.
    17. Srivastava, Rajendra K & Green, Robert T, 1986. "Determinants of Bilateral Trade Flows," The Journal of Business, University of Chicago Press, vol. 59(4), pages 623-40, October.
    18. Gabriel R G Benito & Geir Gripsrud, 1992. "The Expansion of Foreign Direct Investments: Discrete Rational Location Choices or a Cultural Learning Process?," Journal of International Business Studies, Palgrave Macmillan, vol. 23(3), pages 461-476, September.
    19. Hocevar, Toussaint, 1975. "Equilibria in Linguistic Minority Markets," Kyklos, Wiley Blackwell, vol. 28(2), pages 337-57.
    20. Keith D Brouthers & Lance Eliot Brouthers, 2001. "Explaining the National Cultural Distance Paradox," Journal of International Business Studies, Palgrave Macmillan, vol. 32(1), pages 177-189, March.
    21. Albert Breton, 1978. "Nationalism and Language Policies," Canadian Journal of Economics, Canadian Economics Association, vol. 11(4), pages 656-68, November.
    22. Yadong Luo & Oded Shenkar, 2006. "The multinational corporation as a multilingual community: Language and organization in a global context," Journal of International Business Studies, Palgrave Macmillan, vol. 37(3), pages 321-339, May.
    23. Jeffrey Frankel & Andrew Rose, 2002. "An Estimate Of The Effect Of Common Currencies On Trade And Income," The Quarterly Journal of Economics, MIT Press, vol. 117(2), pages 437-466, May.
    24. Marcella Corsi & Alessandro Roncaglia, 2002. "The employment issue in the European Union," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 25(1), pages 141-159, January.
    25. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(2), pages 284-314, June.
    26. Roberto A. Weber & Colin F. Camerer, 2003. "Cultural Conflict and Merger Failure: An Experimental Approach," Management Science, INFORMS, vol. 49(4), pages 400-415, April.
    27. Istvan Konya, 2002. "Modeling cultural barriers in international trade," Boston College Working Papers in Economics 547, Boston College Department of Economics.
    28. Harhoff, Dietmar & Hoisl, Karin & Reichl, Bettina & van Pottelsberghe de la Potterie, Bruno, 2007. "Patent Validation at the Country Level - The Role of Fees and Translation costs," Discussion Papers in Business Administration 2073, University of Munich, Munich School of Management.
    29. Parisi, Francesco, 2003. " Political Coase Theorem," Public Choice, Springer, vol. 115(1-2), pages 1-36, April.
    30. Hoyt Bleakley & Aimee Chin, 2004. "Language Skills and Earnings: Evidence from Childhood Immigrants," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 481-496, May.
    31. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    32. Mark Grinblatt, 2001. "How Distance, Language, and Culture Influence Stockholdings and Trades," Journal of Finance, American Finance Association, vol. 56(3), pages 1053-1073, 06.
    33. Davis, Michael L, 1988. "Time and Punishment: An Intertemporal Model of Crime," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 383-90, April.
    34. Schweiger, David M. & Atamer, Tugrul & Calori, Roland, 2003. "Transnational project teams and networks: making the multinational organization more effective," Journal of World Business, Elsevier, vol. 38(2), pages 127-140, May.
    35. de Rassenfosse, Gaétan & van Pottelsberghe de la Potterie, Bruno, 2008. "On the price elasticity of demand for patents," CEPR Discussion Papers 7029, C.E.P.R. Discussion Papers.
    36. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
    37. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-45, May.
    38. Piero Morosini & Scott Shane & Harbir Singh, 1998. "National Cultural Distance and Cross-Border Acquisition Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 29(1), pages 137-158, March.
    39. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan, vol. 19(3), pages 411-432, September.
    40. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    41. Denice Welch & Lawrence Welch & Rebecca Marschan-Piekkari, 2001. "The Persistent Impact of Language on Global Operations," Prometheus, Taylor & Francis Journals, vol. 19(3), pages 193-209.
    42. Shawna O'Grady & Henry W Lane, 1996. "The Psychic Distance Paradox," Journal of International Business Studies, Palgrave Macmillan, vol. 27(2), pages 309-333, June.
    43. Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 305-36, Fall.
    44. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
    45. repec:cup:cbooks:9780521816632 is not listed on IDEAS
    46. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April.
    47. Stigler, George J., 1983. "The Organization of Industry," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226774329.
    48. Leslie, Derek & Lindley, Joanne, 2001. "The Impact of Language Ability on Employment and Earnings of Britain's Ethnic Communities," Economica, London School of Economics and Political Science, vol. 68(272), pages 587-606, November.
    49. Jaideep Anand & Andrew Delios, 1997. "Location Specificity and the Transferability of Downstream Assets to Foreign Subsidiaries," Journal of International Business Studies, Palgrave Macmillan, vol. 28(3), pages 579-603, September.
    50. Williams, Donald R., 2006. "The Economic Returns to Multiple Language Usage in Western Europe," IRISS Working Paper Series 2006-07, IRISS at CEPS/INSTEAD.
    51. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
    52. Fidrmuc, Jan & Ginsburgh, Victor, 2004. "Languages in the EU: The Quest for Equality and Its Cost," CEPR Discussion Papers 4795, C.E.P.R. Discussion Papers.
    53. Joshua D. Coval & Tobias J. Moskowitz, 1999. "Home Bias at Home: Local Equity Preference in Domestic Portfolios," Journal of Finance, American Finance Association, vol. 54(6), pages 2045-2073, December.
    54. Daniele Archibugi, 2005. "The Language of Democracy: Vernacular or Esperanto? A Comparison between the Multiculturalist and Cosmopolitan Perspectives," Political Studies, Political Studies Association, vol. 53, pages 537-555, October.
    55. Anderson, David A, 1999. "The Aggregate Burden of Crime," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 611-42, October.
    56. Ribstein, Larry E & Kobayashi, Bruce H, 1996. "An Economic Analysis of Uniform State Laws," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 131-99, January.
    57. Chiswick, Barry R., 2008. "The Economics of Language: An Introduction and Overview," IZA Discussion Papers 3568, Institute for the Study of Labor (IZA).
    58. Yaakov Weber & Oded Shenkar & Adi Raveh, 1996. "National and Corporate Cultural Fit in Mergers/Acquisitions: An Exploratory Study," Management Science, INFORMS, vol. 42(8), pages 1215-1227, August.
    59. Marschan, Rebecca & Welch, Denice & Welch, Lawrence, 1997. "Language: The forgotten factor in multinational management," European Management Journal, Elsevier, vol. 15(5), pages 591-598, October.
    60. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:kap:ejlwec:v:34:y:2012:i:2:p:279-325. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)

    or (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.