Ensuring Compliance in a Global World
- Private Regulation series
Edited by Fabrizio Cafaggi
Chapter 7: Privatizing the Adjudication of International Commercial Disputes: The Relevance of Organizational Form
Kevin E. Davis1 1. INTRODUCTION Should proﬁt-maximizing private ﬁrms be responsible for governing commercial transactions? In recent years several commentators have argued that proﬁt-oriented private actors (‘for-proﬁts’) ought to play a greater role in governing commercial transactions (Hadﬁeld 2001, 2009).2 This presents a profound challenge to the conventional idea that law is a quintessentially public good that ought to be provided by public actors, and adds an important dimension to debates over who should govern the commercial transactions that sustain our economic life. Advocates of privatization emphasize the superior – relative to public actors – incentives and resources of for-proﬁts operating in competitive markets. This chapter tests that claim by examining a setting in which the advantages of for-proﬁts should be most pronounced, namely, the market for adjudication of international commercial disputes. Remarkably, forproﬁts do not dominate. The actors who adjudicate international commercial disputes include for-proﬁts, not-for-proﬁts, international organizations, publicly-sponsored courts, and hybrid organizations. The organizational diversity is striking. 1 I am grateful to Gary Bell, Franco Ferrari, Clayton Gillette and participants in the Workshop on Enforcement of Private Transnational Regulation for helpful comments and conversations, as well as to Maxwell Kardon for research assistance. All errors are my own. Financial support from the Filomen D’Agostino and Max E. Greenberg Research Fund at NYU School of Law is gratefully acknowledged. 2 For earlier treatments of this topic see Landes and Posner (1979), and other contributions to the same volume, as well as...
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