ABSTRACT
If one admits that legal norms may be at variance with individual preferences, that is, that regulatory failure may exist, the search for institutional safeguards suggests itself.2 Here I consider legal competition as a potential remedy. At first glance, and in particular from a judicial point of view, the mere notion of legal competition sounds as a contradiction in itself. By definition legal norms are general as well as enforceable and cannot be subject to individual choice like coffee or cigars, let alone an option not to consume. Obviously the state itself would undergo substantial change, if not erosion, if its monopoly were replaced by competition amongst legal norms. However, legal competition is not a fictitious idea of some innocent armchair economist, but has, even though unintentionally, emerged as a practical result of the EU-Treaty, in particular of its far-reaching interpretations by the European Court (EC). Notably, the EU has not deliberately chosen the track of legal competition and has not to this day pursued this type of institutional change in its official declarations; instead, the vision of a single legal
order in the EU (the so-called positive integration) is the first preference on the agenda of European Integration; nevertheless, legal competition does occur and holds out an important example of the evolution of designed institutions. For this reason, it has attracted much attention which, however, has not led to an unambiguous assessment. While a few scholars such as Streit and Kiwit (1999) propagate an overoptimistic view and deem legal competition to work in a Hayekian-like manner as a “discovery procedure”, many others have formulated objections against the idea that governmental rule-setting should be subject to competition; critics refer to economic arguments against the workability of such competition as well as to political misgivings pertaining to the erosion of democratically legitimized rule-setting, if an anonymous mechanism is supposed to replace collective decisions (Bratton et al. 1996: 2).3 This turns out to be much more of a problem if such collective decisions are corroborated by cultural norms and find acceptance by the constituents. It is precisely this outcome which cannot be denied a priori when we concentrate on legal competition.
