Interjurisdictional Linkages and the Scope for Interventionist Legal Harmonization

Andrzej Baniak and Peter Grajzl

No 3085, CESifo Working Paper Series from CESifo

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.

Keywords: harmonization; centralization; delegation; cross-jurisdictional externalities; jurisdictional interdependence; globalization (search for similar items in EconPapers)
JEL-codes: D02 D82 K40 P50 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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Journal Article: Interjurisdictional Linkages and the Scope for Interventionist Legal Harmonization (2011)
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