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To Arbitrate or To Litigate: That Is the Question

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Abstract

The benefits of interjurisdictional competition, particularly with a customary law option, are discussed. Arbitration can be a mechanism for choosing among systems of substantive law if effective sanctions back arbitration. Powerful groups capture wealth by manipulating monopolized law, however, and arbitrators' decisions must correspond with expectations about how they will be viewed under review if a coercive monopoly provides sanctions, so conditions necessary for establishing alternative sanctions are explored. Finally, historical efforts to eliminate or absorb customary commercial law are discussed in light of the analysis of interjurisdictional competition, and the potential for encouraging such competition in emerging markets is considered.

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  1. Department of Economics, Florida State University, Tallahassee, Florida, 32306, USA

    Bruce L. Benson (DeVoe Moore Distinguished Research Professor)

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Benson, B.L. To Arbitrate or To Litigate: That Is the Question. European Journal of Law and Economics 8, 91–151 (1999). https://doi.org/10.1023/A:1008762907114

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