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Baffi, Enrico; Santella, Paolo --- "Legal Harmonization" [2011] ELECD 1077; in Parisi, Francesco (ed), "Production of Legal Rules" (Edward Elgar Publishing, 2011)

Book Title: Production of Legal Rules

Editor(s): Parisi, Francesco

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848440326

Section: Chapter 19

Section Title: Legal Harmonization

Author(s): Baffi, Enrico; Santella, Paolo

Number of pages: 10

Extract:

19 Legal harmonization
Enrico Baffi and Paolo Santella



Legal harmonization is a process that aligns legal rules either within a federal
framework (that is, in the presence of a superior, rule-making entity with respect
to the federated entities), through the adoption of regulatory models agreed at
a multilateral level (such as conventions adopted within the OECD or UN) or
through the unilateral adoption of a foreign sovereign state's legal system by
a different sovereign state.
The economics of legal harmonization can be considered as a complement
to the economics of federalism. Legal harmonization should be applied when
a regulatory solution reached through the competition of political units is not
optimal or when the economies of scale and scope, externalities and the provision
of public goods prevent a decentralized approach to regulation. However, this
interpretation denies the autonomy of legal harmonization from the economics
of federalism. Two reasons justify why there should be a second definition for
legal harmonization.
First, federalism consists of the distribution of legislative and judicial powers
between local and central authorities. Legal harmonization consists not only
of federal level harmonization, but also of sovereign state harmonization.
Unilateral adoption by a sovereign state of the legal system of another sovereign
state is defined as "legal transplantation". Legal transplantation reduces or
potentially eliminates differences between legal systems through the unilateral
non-cooperative effort of one system. The wholesale transplantation of the 1900
German Civil Code to Japan is an example of the unilateral adoption of legal
rules ...