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Garoupa, Nuno --- "An Economic Analysis of Legal Harmonization: The Case of Law Enforcement within the European Union" [2012] ELECD 677; in Eger, Thomas; Schäfer, Hans-Bernd (eds), "Research Handbook on the Economics of European Union Law" (Edward Elgar Publishing, 2012)

Book Title: Research Handbook on the Economics of European Union Law

Editor(s): Eger, Thomas; Schäfer, Hans-Bernd

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849801003

Section: Chapter 12

Section Title: An Economic Analysis of Legal Harmonization: The Case of Law Enforcement within the European Union

Author(s): Garoupa, Nuno

Number of pages: 10

Extract:

12 An economic analysis of legal harmonization:
the case of law enforcement within the
European Union
Nuno Garoupa* 1




1 INTRODUCTION

Legal harmonization in the European Union is presented by many of its supporters and
enthusiasts as economically justified. Paradoxically, legal economists are quite skeptical
about the overall economic advantages of harmonization and unification. There is now a
vast economics literature looking at the multiple determinants of legal convergence. The
more detailed and more realistic are the models, the more skeptical the literature is about
legal harmonization.
Law enforcement has not been immune to the legal harmonization discussion. The
economics literature has not attracted so much attention. Nevertheless, in the same vein,
legal economists are not convinced by the superiority of coordination over decentralized
enforcement. For example, the externalities in the market for criminal law are self-evident.
However, the centralized solution is not immune to agency costs. The extent to which the
benefits of internalizing externalities outweigh these agency costs is much less obvious.
Harmonization of law enforcement is pursued in the European Union within the
former Third Pillar, now absorbed into the consolidated European Union structure
under the Treaty of Lisbon. Established under the Maastricht Treaty (1993), the former
Third Pillar essentially covered asylum and immigration policies (transferred to the
First Pillar under the Treaty of Amsterdam, 1999), rules concerning external borders
and customs, coordination of legal policies in relation to illicit drugs, international
fraud, terrorism, organized crime and judicial cooperation. Certain European agencies
were created in this ...