Deciding Who Decides in Conflict of Laws: An Institutional Perspective

Abstract

This paper aims to review the current law and economics debate of the issues that surround private international law disputes. There have been various attempts to explain various aspects of cross-border disputes between individuals. The existing theories tend to focus on efficiency (cost-and-benefit) analysis from the angle of states or private individuals. The efficiency perspective significantly contributed to the conflicts scholarship by unraveling some of the core problems with traditional legal theories. Nonetheless, in this paper we try to suggest that the current debate does not capture the institutional aspect of the Coasean proposition about transaction costs. Namely, cost-and-benefit perspective mainly focuses on the functioning of the market mechanisms in different settings. This paper aims to offer an institutional account by comparing how market, adjudicative and political processes interact with each other in conflict of laws settings. Comparing alternative institutional settings offers a dynamic view of the regulatory cycling in conflict of laws. After reviewing main insights proposed by advocates of comparative institutional approach, we move on analyzing three case studies trying to illustrate the cycling aspect among various regulatory alternatives. Institutional perspective is one of the possible ways to explain the dynamic element of conflict of laws; it has a great potential in furthering academic and practical studies on the improvement of conflicts methodology.