Gralf-Peter Calliess

Law, Economics and Evolutionary Theory

Contents: Foreword Law, Economics and Evolutionary Theory: State of the Art and Interdisciplinary Perspectives Peer Zumbansen and Gralf-Peter Calliess PART I: EVOLUTIONARY THEORY AND HISTORICAL TRAJECTORIES 1. The European Enlightenment, the Industrial Revolution, and Modern Economic Growth Joel Mokyr 2. The Unbearable Lightness of A - Useful Knowledge and Economic Growth Thrainn Eggertsson 3. The Law Merchants Story: How Romantic is it? Bruce L. Benson 4. Path Dependence: A Foundational Concept for Historical Social Science Paul A. David PART II: EVOLUTIONARY THEORY IN LAW AND ECONOMICS 5. System and Evolution in Corporate Governance Simon Deakin and Fabio Carvalho 6. Constitutional Possibility and Constitutional Evolution Eric A. Posner 7. The Expressive Power of Adjudication in an Evolutionary Context Richard H. McAdams 8. Forces Shaping the Evolution of Private Legal Systems Amitai Aviram 9. Legal Evolution between Stability and Change Martina Eckardt 10. The Genesis of Law: On the Paradox of Laws Origin and its Supplement Marc Amstutz 11. Gene-Culture Co-Evolutionary Theory and the Evolution of Legal Behavior and Institutions Bart Du Laing 12. Making Evolutionary Theory Useful for Legal Actors Mauro Zamboni PART III: TRANSNATIONAL LAW AND EVOLUTIONARY GOVERNANCE 13. Transnational Commercial Law, Multi-level Legal Systems, and Evolutionary Economics Wolfgang Kerber 14. Darwin at Work: How to Explain Legal Change in Transnational and European Private Law Jan M. Smits 15. Linking Extra-legal Codes to Law: The Role of International Standards and Other Off-the-track Regimes Erich Schanze 16. Transnational Governance and Evolutionary Theory Gralf-Peter Calliess, Jorg Freiling and Moritz Renner Index

Billigkeit und effektiver Rechtsschutz

Zusammenfassung Der Beitrag gibt einen Überblick über den Forschungsstand der Systemtheorie zur Frage nach der Entstehung eines Weltrechts. Besonderes Augenmerk richtet sich dabei auf die Voraussetzungen von Rechtsevolution als Anpassung des Rechtssystems an die Globalisierung seiner innergesellschaftlichen Umwelt. Am Beispiel der römischen Aequitas und der englischen Equity wird herausgearbeitet, dass (1) auf der prozessualen Ebene effektiver Rechtsschutz und auf der materiellen Ebene Entscheidungen nach Billigkeit entscheidende rechtssystemendogene Faktoren der erfolgreichen Ko-Evolution von Recht und Gesellschaft sind, und dass (2) sich im Falle diesbezüglicher Evolutionsblockaden Innovationen häufig außerhalb des etablierten Rechtssystems in alternativen Streitschlichtungssystemen ergeben. Aus demselben Grunde vollziehen sich Innovationen, die zur Anpassung des Rechts an die Globalisierung führen, vorwiegend außerhalb des etablierten nationalen und internationalen Rechts in funktionalen (issue-specific) und autonomen (self-contained) Regimes, die aufgrund ihres im Hinblick auf die Unterscheidung öffentlich/privat hybriden Charakters als globale Zivilregimes bezeichnet werden. Summary The author gives an overview of the systems theoretical research on the emergence of a world law. Specifically addressed are the internal preconditions of an adaptation of the legal system to the globalisation of other functional systems of society. Roman Aequitas and English Equity are taken as examples that (1) on the procedural level „effective redress“ and on the substantive level „decisions in equity“ are decisive factors for a successful co-evolution of law and society, and (2) where these factors are absent in the established legal system innovation frequently comes about through alternative dispute resolution systems. For this reason, the author argues, legal innovation which leads to the world legal systems adaptation to globalisation predominantly comes through issue-specific and self-contained legal Regimes. For their hybrid status with regard to the public/private-distinction they are called Global Civil Regimes.

Intra-Firm Trade Law - Contract-Enforcement & Dispute Resolution in Transnational Corporations

While intra-firm trade accounts for at least one third of world exports, we know very little about the institutions which are employed to resolve intra-firm trade conflicts. According to Oliver Williamson, courts are not accessible and conflicts resulting from intra-firm trade are resolved by directives based on the authority of ownership instead (law of forbearance). Williamsons description of the law of forbearance, however, depicts an ideal typical form of a firm, which is characterised by low incentive intensity and high administrative costs. Yet, in order to improve on these attributes, large transnational enterprises changed their organisational structure in the past decades. Nowadays, large-scale enterprises usually have a decentralised structure and use intra-firm pricing and incentive systems. Against this backdrop, Williamsons description of the contract law regime of intra-firm trade appears all too general. This paper addresses the question of how contract enforcement in transnational corporations is institutionally organized on the basis of preliminary results of expert interviews conducted with officials from transnational corporations. In a first step we illustrate that conflicts originating in intra-firm transactions are basically of the same type and nature than conflicts arising out of market transactions. We argue that the settlement of these disputes is of relevance both for legal (e.g. corporate and tax law) and economic reasons (e.g. coordination, control and motivation functions of profit centers). In a second step we analyze the governance mechanisms which are employed by transnational corporations to resolve intra-firm trade conflicts.

The Transnationalisation of Commercial Law

Commerce always requires an institutional embedment. Basically, private Institutions as well as state institutions can provide the normative good of legal certainty understood as the enforceability of contractual commitments. While for domestic commerce, the balance between the importance of private and state institutions is almost equal, economic globalization leads to a decrease in the relative weight of public institutions and to a corresponding increase in the overall importance of private institutions for international commerce. This trend of internationalization and privatization of responsibility for the provision of legal certainty combine to what we call the transnationalisation of commercial law. Drawing on five case studies, in this paper we try to explain why today private institutions are of greater importance for cross-border transactions than state or multinational institutions. One the one hand, the first two studies show that there is no real practical need for multinational institutions for cross-border commerce. First, the modern information and communication technology strengthen the effectiveness of reputation-based mechanisms - relational contracts and reputational networks - for the safeguarding of cross-border transactions. Second, vertical integration in general and intra-firm trade in particular offer effective alternatives to market exchange. One the other hand, some private institutions can offer more than safeguarding commercial transactions as they can guarantee to a certain extent a respect of fairness and public policy issues. In maritime law, the third case study, it can be shown that private actors can achieve a fair arrangement for all stakeholders by allowing them to participate in the process of norm-formation in a transparent process. The fourth study in international commercial arbitration shows that international arbitration courts respect national mandatory rules and produce new transnational mandatory rules. However, the transnationalisation of commercial law leads to the trend of the vanishing trial: National Courts register less commercial disputes which does not come without cost. The fifth case study explains possible reasons for the decreasing number of commercial cases in German courts.

Explaining the Transnationalization of Commercial Law

Commerce always needs to be institutionally embedded. In institutional economics, it is accepted that the exchange of goods and commodities can only take place when property rights are clearly defined and when enforceable, effective behavioural rules justify the expectation that contractual provisions will be mutually honoured (Richter and Furubotn 2003; Williamson 2005a; Hadfield 2008). For ordoliberals, these institutions are an essential part of every economic constitution and encapsulated in the term ‘transactional law’ (Bohm 1933; Behrens 2000).

Firmeninternes Handelsrecht: Vertragsdurchsetzung und Streitbeilegung in transnationalen Unternehmen / Intra-Firm Trade Law: Contract-Enforcement & Dispute Resolution in Transnational Corporations

Zusammenfassung Obgleich nach aktuellen Schätzungen etwa ein Drittel des weltweiten Warenverkehrs innerhalb von Unternehmen stattfindet, wissen wir nur sehr wenig über die Institutionen, welche zur Beilegung firmeninterner Handelskonflikte eingesetzt werden. Nach Williamson werden diese Konflikte durch Weisungen gelöst. Seine Beschreibung des unternehmensinternen Vertragsrechtsregimes beruht allerdings auf einem idealtypischen Bild des Unternehmens, welches insbesondere hinsichtlich moderner transnationaler Unternehmen nicht mit der Praxis übereinstimmt. In diesem Aufsatz befassen wir uns daher mit der Frage, wie Vertragsdurchsetzung und Streitschlichtung in transnationalen Unternehmen institutionell organisiert sind. Auf der Grundlage von Experteninterviews zeigen wir auf, welche Konflikte beim firmeninternen Handel entstehen und mit Hilfe welcher Governance-Mechanismen sie gelöst werden. Abstract While intra-firm trade accounts for approximately one third of world exports, we know little about the institutions which are employed to resolve intra-firm trade conflicts. According to Williamson, these conflicts are resolved by fiat. His description of infra-firm contract law, however, depicts firms in an ideal-typical fashion, which is not consistent with the reality of modern transnational corporations. Hence, this paper addresses the question of how contract enforcement and dispute resolution are institutionally organised in transnational corporations. On the basis of expert interviews, we illustrate the nature of conflicts originating in intra-firm transactions and analyse the governance mechanisms which are employed to resolve these conflicts.

Privatizing the Economic Constitution- Can the World Market Reproduce its Own Institutional Prerequisites?

It especially builds on work published in the following articles: Calliess/Mertens, Transnational Corporations, Global Competition Policy, and the Shortcomings of Private International Law, Indiana Journal of Global Legal Studies 18 (2011) 2, p. 843; Calliess/Renner, The Public and the Private Dimensions of Transnational Commercial Law, German Law Journal 10 (2009) 10, p. 1341; Renner, Towards a Hierarchy of Norms in Transnational Law?, Journal of International Arbitration 26 (2009) 4, p. 533.

Transnational Governance and Evolutionary Theory

Law and economics has arguably become one of the most influential theories in contemporary legal theory and adjudication. The essays in this volume, authored by both legal scholars and economists, constitute lively and critical engagements between law and economics and new institutional economics from the perspectives of legal and evolutionary theory. The result is a fresh look at core concepts in law and economics – such as ‘institutions’, ‘institutional change’ and ‘market failure‘ – that offer new perspectives on the relationship between economic and legal governance.

Ordering in Public Private Partnerships: Zur Evolution von Governance-Designs für internationale Transaktionen

Der Gedanke der Public Private Partnerships (PPP) ist bislang vor allem im Kontext der Neuordnung der Aufgaben staatlicher Institutionen in Richtung auf die Privatisierung vormals offentlich erstellter Leistungen diskutiert worden. In diesem Zusammenhang stellt sich nicht nur die Frage, welche Aufgabenfelder staatlicher Tatigkeit seitens privatwirtschaftlicher Trager im Rahmen wirtschaftlicher Uberlegungen sinnvoll ubernommen werden konnen, sondern auch und vor allem nach den Moglichkeiten und Grenzen eines Zusammenwirkens staatlicher und privater Akteure. Derartige Gedanken sind selten unabhangig vom Staatsverstandnis und den damit verbundenen Vorstellungen von den Aufgaben, die der Staat zu erbringen hat. So stellen etwa Grimsey und Lewis (2004) fest, dass grose Teile des staatlichen Sektors als politisches Artefakt zu sehen sind, weniger hingegen als okonomische Notwendigkeit oder offentlicher Wille.

Transnational Civil Regimes: Economic Globalisation and the Evolution of Commercial Law

This paper explores the theory of transnational law. It is proposed that transnational civil regimes transcend the public-private distinction both in the substantive (private vs public law) and the procedural (public vs private regulators) dimensions. A toolbox of twelve generic governance mechanisms is introduced, which in the institutional organization of cross-border commerce are recombined into effective regimes. It is suggested that the resulting institutional innovations cannot appropriately be described by traditional concepts of the relation of state law and private ordering (delegation, deference, and incorporation), but should rightly be perceived as a ‘legal mutation.’