From Economic to Legal Competition

From Economic to Legal Competition

New Perspectives on Law and Institutions in Europe

New Horizons in Law and Economics series

Edited by Alain Marciano and Jean-Michel Josselin

The idea of legal competition as a decentralized market process of law provision in which legal clubs compete, has earned an indisputable legitimacy among economists. This book presents a debate concerning the merits of and conditions for a competitive provision of law, with a special focus on institutions in Europe.

Chapter 9: From fiscal competition to juridical competition. Lessons from the French experience

Didier Danet

Subjects: economics and finance, public finance, law - academic, european law


Didier Danet INTRODUCTION The growing opening of markets and economies has given rise to a fiscal competition which is usually considered as potentially damaging (Marini, 1998, OCDE, 1998; Owens, 1999). The drawback is well-known: many reports, books or papers describe harmful practices and suggest solutions in order to avoid the consequences of ‘fiscal wars’.218 Competition between legal systems has its origins in the same tendencies. Fiscal competition and legal competition are moreover related to each other: countries which try to divert investments, registered offices etc. usually reduce taxes concerning corporates, salaried staff, accounting etc. Its impact is also of great importance even if it is more complicated and less visible. There is less literature analysing legal competition in France, and the literature that exists tends to underestimate the fact that legal competition exists in France or assumes that there is no competition. The first purpose of this chapter relates to the definition and typology of juridical competition (section 1) With regard to this typology, the chapter aims to describe the extent and the intensity of the competition which does exist in the French legal system (section 2). Then, as far as private rules can widely compete with public rules in this system, the chapter tries to explain why private rules, usually considered more suitable and less expensive, do not fully supplant public rules (section 3). 1. A TYPOLOGY OF COMPETITION According to such a distinguished scholar as Pascal Salin, competition between legal rules is a specific application of the self-regulation...

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