New Economics Papers
on Law and Economics
Issue of 2005‒10‒22
fifteen papers chosen by
Jeong-Joon Lee, Towson University

  1. The Process of Ratification of the Constitutional Treaty and the Crisis Options: A Legal Perspective By Bruno de Witte
  2. Anti-Unfair Competition Law and Anti-Trust Law: A Continental Conundrum? By Hanns Ullrich
  3. Selected Issues in International Criminal Law. Working Group on International Criminal Law. Collected Reports 2003-2004 By Christine Bakker; Elsa Gopala Krishnan; Luisa Vierucci; Pierre-Marie Dupuy
  4. Thalomide, BSE and the Single Market: A Historical-Institutionalist Approach to Regulatory Regimes in the European Union By Sebastian Krapohl
  5. Organizational Loyalties and Models of Firms: Governance Design and Standard of Duties By Fabrizio Cafaggi
  6. Traditional Knowledge, Biodiversity, Benefit-Sharing and the Patent System: Romantics v. Economics? By Hanns Ullrich
  7. What's New in European Administrative Law? Quoi de Neuf en Droit Administratif européen ? By Jacques Ziller
  8. The Challenge of Governance in Regional Integration. Key Experiences from Europe By Jacques Ziller
  9. Rethinking European Law's Supremacy with Comments by Damian CHALMERS, Rainer NICKEL, Florian RÖDL, Robert WAI By Christian Joerges
  10. A Coordinated Approach to Regulation and Civil Liability in European Law: Rethinking Institutional Complementarities By Fabrizio Cafaggi
  11. Legal Pluralism and the Politics of Constitutional Definition By Gavin Anderson
  12. Implications of EU Enlargement for Border Management and Citizenship in Europe By Enrica Rigo
  13. No Exit from the Joint Decision Trap? Can German Federalism Reform Itself? By Fritz Scharpf
  14. When and Why the Council of Ministers of the EU Votes Explicitly By Fiona Hayes-Renshaw; Wim van Aken and Helen Wallace
  15. The Political Economy of Violence and Distribution in Ancient Times: A Note on the Relationship between Specific Investments and the Evolution of Early Human Societies By Alberto Battistini

  1. By: Bruno de Witte
    Abstract: Now that the Constitution for Europe is signed, it must be ratified by each of the 25 member states according to their own constitutional requirements. If one of those states is unable to ratify (because of the negative outcome of a popular referendum of for some other reason), the future of the Constitution becomes very uncertain. The paper explores the various scenarios for dealing with such a ratification crisis from a legal perspective
    Keywords: treaty reform; constitutional change; law; differentiated integration
    Date: 2004–11–01
  2. By: Hanns Ullrich
    Abstract: In the European Union the relationship between anti-trust law and the law against unfair practices in competition raises not only issues of how to properly delimit the scope of application of the rules of both bodies of law, but also of how to divide the exercise of legislative authority over these matters between the Community and its Member States , and of how to deal with divergences existing between the various national laws in both areas. As far as national anti-trust law is concerned , primacy of Community law, as established by Reg.1/2003, will solve the conflicts, but it cannot extend, and the Regulation expressly does not extend such primacy to national laws against unfair competition, thus leaving room for overlap and conflicts. However, it is much less the risk of direct or – more likely – indirect conflicts which needs to be examined, than the impact which the law against unfair business practices may have on the overall operation of competition in the Community . It is with a view to this intrinsic interdependency between the law against restrictive practices and the law against unfair practices that this paper examines both the development of Community anti-trust law and of harmonization of national unfair competition laws. The point is made that , on the one hand, the Community seeks to reinforce the competitive process in the market place even through consumer-related unfair competition law in that, by way of harmonization of the law, it essentially imposes upon Member States the concept of a strictly information-reliant protection of consumers ,and, on the other ,that ,as regards conduct in pure business-relationships, the Community, by a subsidiarity approach, leaves Member States much room to regulate “ competition on the merits “as they see the merits of particular business practices. In concluding, it is argued that such reliance on regulatory competition might well be used to counterbalance a one-dimensional welfare understanding of Community anti-trust law by more freedom oriented concepts of fairness in competition.
    Keywords: economic law; free movement; harmonisation; Single Market; competition policy
    Date: 2005–02–01
  3. By: Christine Bakker; Elsa Gopala Krishnan; Luisa Vierucci; Pierre-Marie Dupuy
    Abstract: Building on session reports collected over a span of two years, this Working Paper consolidates the extensive discussions that took place within the EUI Working Group on International Criminal Law. Under the banner of international criminal law, a broad variety of issues, including both substantive criminal law and procedural rules, as well as international case law and national jurisprudence, were addressed by the participants. Specific themes such as the principle of complementarity under the Rome Statute, the issue of immunities, and that of universal jurisdiction, recurred in the debates and are explored in this Paper.
    Date: 2005–02–01
  4. By: Sebastian Krapohl
    Abstract: ""
    Date: 2005–03–01
  5. By: Fabrizio Cafaggi
    Abstract: This paper makes the two following claims: 1) The legal dimension of loyalty within organizations goes beyond duties. The governance design aimed at ensuring loyalty may strongly affect standards that characterize each layer of the organization. The interaction between standards of duty and the governance dimension of loyalty should, therefore, be more tailored to specific legal forms and their functional correlation with ownership and financing. 2) There is a greater divergence than has so far been acknowledged between the function of loyalty in vertically integrated firms and in networks of small firms. This difference, created by the relationship between the duty and the governance dimensions, should have repercussions on the definitions of legal standards. In particular, it should reflect the different relationships between hierarchy, monitoring, and loyalty and the choice between prohibitory, authorization-based, and compensatory rules. The analysis concentrates on the key variables that may affect the choice between vertical and horizontal monitoring to ensure compliance with loyal behavior in two polar models: hierarchical firms and networks of small firms. It reveals the importance of considering the governance design when defining duties of loyalty and related standards to evaluate party-related transactions in both cases but, at the same time, the necessity of using different interpretive categories
    Date: 2005–05–01
  6. By: Hanns Ullrich
    Abstract: Since the nineties of the last century two opposite trends have marked the development of international intellectual property protection. On the one hand, world trade negotiations have resulted in the establishment of a globally uniform system of adequate protection of intellectual property by the GATT/WTO Agreement on Trade Related Aspects of Intellectual Property Rights. It basically enshrines the market-oriented principles of protection of industrially developed countries. On the other, efforts to protect traditional and local knowledge have found specific support in the Convention on Biological Diversity which, in addition to providing, in the interest of environment protection, for mechanisms for the control of access to genetic resources, seeks to promote the condition of developing countries by subjecting such access to principles of prior informed consent and of participation in the benefit enterprises may obtain on the basis of patent protected inventions and innovations embodying or using genetic resources and associated traditional knowledge. The paper first examines the various ways in which biodiversity-related traditional knowledge may be passively or actively defended or protected, but concludes that, with the exception of a defence against misuses of the intellectual property system, little is to be expected from either reliance on existing forms of protecting intellectual property or from the development of more or less analogous forms of sui generis protection, the main reason being that intellectual property protection is a market-oriented mechanism, not a measure of knowledge conservation. In a second part the conflicts are analysed which arise when, as under the Biodiversity Convention, the market-oriented system of protection is put at the service of regulatory schemes aiming at non-market goals, in particular when the acquisition of patents is subject to additional and not directly related disclosure requirements, and when the exploitation of patents is conditioned on “equitable benefit sharing”. The main conclusion is that such burdening of patent protected innovation with specific environmental and developmental charges will result in negative synergies. These may have a counterproductive impact first, on the attainment of the regulatory objectives of protecting biodiversity and of promoting development and, second, on the technological neutrality of patent protection as an incentive mechanism for innovation in general. Additional problems of the legitimacy of using intellectual property as a support of objective-specific regulation suggest to implement the Convention on Biodiversity on the basis of a clearer separation between protection of biodiversity, promotion of development and stimulation of innovation, since this would bring it more in accordance with principles of proportionality regarding the selection and the use of regulatory instruments.“
    Keywords: economic law; international trade; pharmaceutical industry; Uruguay round; environmental policy; trade policy; international relations; WTO; knowledge
    Date: 2005–05–01
  7. By: Jacques Ziller
    Abstract: What’s New in European Administrative Law? Transcription of the Statements and Discussions of the Round Table held at the EUI on10 December 2004 : Jacques Ziller, Foreword; Edoardo Chiti, The Relationship between National Administrative Law and European Administrative Law in Administrative Procedures ; Diana-Urania Galetta, The Obligation for National Administrative Bodies to Review their Final Administrative Decisions ; Jean Bernard Auby, A Physionomy of European Judicial Review of Administration (in French); Karl-Peter Sommermann, Europeanisation and Transformation of Administrative Justice in Europe.Européanisation et transformation de la justice administrative en Europe (in French); Paul Craig, Process Rights in Adjudication and Rulemaking: Legal and Political ; Susana de la Sierra, The Constitutional Bases of European Administrative Law; Loïc Azoulay, Broadening and Elevation the Scope of European Administrative Law (in French); Kathrin Maria Scherr, The Concept of Administrative Self-Remedy under EC Law; Joana Mendes Participation Rights
    Keywords: Europeanization; implementation; multilevel governance; networks; participation; public administration; fundamental/human rights; judicial review; mutual adjustment; subsidiarity; comitology; decentralisation; institutions; European Agencies
    Date: 2005–06–01
  8. By: Jacques Ziller
    Abstract: This paper, to be also published as Working paper By the Inter-American Development Bank addresses the issue of the relevance for Latin America and the Caribbean of European experience with the governance of regional integration. It focuses on the global governance of the European Communities (EC) and European Union (EU) in the light of the constitutional process which the EC/EU is undergoing in the present years and of the management deficit in regional integration which has been experienced by the EC/EU, especially since about two decades. While those contemporary elements are being considered as decisive in order to understand the present stage of integration of Europe, the governance aspects of the developments which have lead from the first experience of the European Coal and Steel Community (ESCS) in 1950-51 between six countries to the present EC/EU of twenty five countries will be given special attention, as they are indispensable in order to understand how the present stage of integration has been achieved.
    Keywords: federalism; governance; neo-functionalism; European law; international trade; law; political science
    Date: 2005–06–01
  9. By: Christian Joerges
    Abstract: XX
    Date: 2005–07–01
  10. By: Fabrizio Cafaggi
    Abstract: The essay concentrates on the relationship between civil liability and administrative regulation in EPL. After examining their historical evolution, he concludes that they have frequently complemented each other. Such complementarity has often been based on the need to integrate reciprocal insufficiencies. This happened, for example, at the end of the nineteenth Century, when welfare regulation complemented civil liability for industrial accidents; and at the end of the twentieth century, when civil liability complemented economic de-regulation. The normative thesis is that civil liability and regulation, public and private, are functional complements to be used simultaneously in order to pursue homogeneous goals: higher consumer and environmental protection. While the approach is meant to have general application, the relationship is analysed in two fields: product safety and environmental protection. The descriptive claim is that, both at the European and national levels, there is insufficient coordination between civil liability and regulation. He advocates a more integrated approach in relation to a) substantive rules, i.e. product defectiveness, remedies in product and environmental liability, and to b) institutions, judges, public and private regulators, called upon to administer the two systems. To pursue a coordinated strategy institutional changes are required. A different functional partitioning between regulation and civil liability, in order to assess and manage risks associated to dangerous products and processes, is a necessary but insufficient step; a new institutional framework, designed to ensure that effective deterrence and just compensation occur, is also required. These are not only necessary components of European citizenship but also important requirements of an efficient integrated European market. The paper emphasizes the importance of recognizing the liability of regulators in ensuring the effectiveness of regulatory strategies. Greater coordination among national judiciaries in relation to product and environmental liability, based on the duty of loyal and sincere cooperation, is advocated. In relation to general concepts, such as product safety and environmental pollution, harmonized judicial interpretation is particularly necessary, given the width of legislative definitions and the strategic function of national regulators and judges in specifying standards and monitoring compliance
    Keywords: regulation
    Date: 2005–09–01
  11. By: Gavin Anderson
    Abstract: This paper addresses the counterhegemonic potential of rights constitutionalism in the age of globalization, and in particular its capacity to respond to the rise of significant forms of private power. It locates this issue in the context of the paradigmatic debate of modern law between liberal legalism and legal pluralism. The latter challenges the core epistemological assumptions of orthodox constitutional thought that law is exclusively state law (by positing the existence of non-state legal orders) and that this tends towards coherence and effectiveness. For legal pluralism, constitutionalism's importance does not lie primarily in the outcome of normative argument, but in symbolic terms as a legitimating discourse. Accordingly, to claim that law only emanates from state institutions, and is an effective tool of social engineering, is not simply an analytical statement, but reflects a substantive political agenda. The politics of definition of classical liberalism and the 'new constitutionalism' are contrasted to consider how they set the parameters for political debate. The former, which views constitutionalism as negative limits on the state, reinforces hegemonic interests by its narrow conception of political power as inhering in public institutions, whereas the latter, by locating constitutional norms, for example in the actions of multinational corporations, potentially opens up private power to constitutional scrutiny. It is concluded that the prospects for counterhegemonic constitutionalism lie in opening up the politics of definition of constitutional law to critical debate.
    Keywords: globalization
    Date: 2005–05–15
  12. By: Enrica Rigo
    Abstract: The process of repositioning European borders in the context of EU enlargement confronts the theory and practice of defining 'European citizenship'. This paper examines the deterritorialisation of the EU's external and internal borders through an analysis of the immigration laws of Poland, Romania and Bulgaria which have all been recently modified in order to meet the requirements of the Schengen aquis. Clear lines of continuity can be traced between the externalization of border control through visa policies or readmission agreements and the internalization of borders resulting from institutions which define the legal position of aliens such as expulsion or administrative detention. I will argue that the transformation of European borders creates a system of 'differentiated' memberships which questions the normative assumption that post-national communities are potentially inclusive.
    Keywords: European citizenship; EU-East-Central Europe; enlargement; immigration policy; asylum policy; Europeanization
    Date: 2005–05–15
  13. By: Fritz Scharpf
    Abstract: Germany's unique institutions of a 'unitary federal state', long considered part of the country's post-war success story, are now generally perceived as a 'joint decision trap' impeding effective policy responses to new economic and demographic challenges at both levels of government. Nevertheless, a high powered bi-cameral Commission set up in Autumn 2003 failed to reach agreement on constitutional reforms. The paper analyses the misguided procedural and substantive choices that explain the failure of reform, and it discusses the possibility of asymmetric constitutional solutions that might enhance the capacity for autonomous action at both levels.
    Keywords: Germany; federalism; constitutional change; multilevel governance
    Date: 2005–09–15
  14. By: Fiona Hayes-Renshaw; Wim van Aken and Helen Wallace
    Abstract: This paper reports newly collected empirical data sets on explicitly contested voting at ministerial level in the Council of Ministers of the European Union. These data sets cover the period 1994-2004, with more detail for the years 1998-2004. They provide us with rather steady patterns of explicitly contested voting across the period in terms of: proportions of decisions taken where contested voting was recorded; the different levels of contestation by country; and the issue areas in which explicit voting occurred more often. The data sets draw on the material available on the Council's own website, but they have been supplemented by hand-collected data, in particular as regards issue areas and types of decision. Once arranged appropriately the data sets will be posted on the web, so that other researchers can have access to the material. The initial analysis of the data is reported in the second edition of Hayes-Renshaw and Wallace, The Council of Ministers, Palgrave, forthcoming, Chapter 10. The data show that explicit voting on agreed decisions at ministerial level is rather rare, that in nearly half the roll calls dissent is expressed only by singleton member states, that nearly half the cases concern 'technical' decisions on agriculture and fisheries, and that Germany more often votes 'no' or abstains than any other member state. The data confirm that ministers generally endorse collective decisions by consensus, even on the 70% or so cases where they could activate qualified majority voting (QMV). To the extent that voting takes place in these latter cases, it occurs implicitly rather than explicitly, operates mostly at the level of officials rather than ministers, and is not recorded systematically in publicly accessible form. These patterns are consistent with earlier accounts based on qualitative interview evidence.
    Keywords: Council of Ministers; majority voting
    Date: 2005–09–15
  15. By: Alberto Battistini
    Abstract: this paper combines the economic concept of specific investment with anthropological evidence on three early human societies –the disbanding groups of pre-anatomically modern humans, the huntergatherers’ egalitarian communities, and the primitive states or chiefdoms. This combination is aimed to provide a single framework for thinking of the institutional evolution of their political organizations and, therefore, of the associated mode of regulation of violence and distribution. Specifically, I examine a circular causation mechanism by which exogenous ‘technological’ conditions determine the basic type of economic activity together with the associated degree of investments’ specificity. The resulting safeguards are expressed in political terms and, in turn, the way these political organizations regulate the level of violence in the society implements a distribution of goods and power which has the effect of reinforcing the initial kick in terms of the economic structure. Thus, at the cost of some loss in formal sophistication, the paper stresses the two-way link between the economical, the political and the distributional sphere, and discusses grouplevel mechanisms to restrain behaviour that –exogenous to every individual in the group but endogenous to groups’ behaviour- are not caught by conventional modelling about the origins of order.
    Keywords: micro-foundations of groups; macro-foundations of individuals; self-reinforcing mechanisms.
    JEL: D30 H11 K10 L22 N40
    Date: 2005–09

This issue is ©2005 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.