The Futility of Unification and Harmonization in International ...

I do not mean to suggest anything so sinister as naked self-aggrandizement by an interest group.Rather, we understandably should expect skilled professionals to value their talents and to believe ingood faith that the world would be a better place if society relied on them even more. The ModelLaw seems to reflect this conviction, unchecked by the concerns of those who might have to pick upthe tab for their work.Of course, enhancing the position of bankruptcy professionals might push this group into theposition of an international intermediary. As they invest in their reputations through repeated dealingswith one another, the bankruptcy lawyers might develop unstated but clearly understood norms fordividing an international bankrupt’s estate that could function as effectively as a transparent andprecise set of legislatively mandated rules. The professionals might have persuaded the drafters togive them greater discretion not to increase their incomes, but rather because a middleman groupmight provide a better solution to the coordination problems inherent in international bankruptcy thanwould an explicitly global system of administering bankrupt estates.The problem is that nothing in the model law rewards bankruptcy professionals specifically forfacilitating successful global settlements. The broad discretionary powers enjoyed by nationaltribunals might work either to promote international cooperation or to tear away at local assets forthe benefit of local creditors. Most successful middleman systems, by contrast, reward theintermediary for promoting welfare-enhancing outcomes. The Model Law does not do this.33III. ALTERNATIVES TO THE UNIFICATION PROJECT: CONTRACT AND COMPETITIONThe project of unifying substantive international commercial law necessarily depends on atechnocratic legal process. I have raised at least a reasonable suspicion that this process has its ownpolitical economy with predictable and unattractive implications for what it produces. Internationalunification instruments display a strong tendency either to compromise legal certainty or to advancethe agendas of interest groups. In either case they offer no obvious welfare gains as compared torules produced through the national legislative process. In particular, we have no reason to expectthese instruments to achieve substantial improvements in the law, if we may disregard what theinterest groups get out of their adoption. Nor can we detect evidence that these instruments bolstercadres of middlemen whose investments in reputation, group coherence and discipline will substitutefor clear and desirable legal rules. And what reduction of legal risk the instruments achieve comesmostly, if not entirely, through conceding the field to specific interest groups, whether carriers,bankers, or other cohesive minorities.In addition, my critique of technocratic lawmaking necessarily implies that we cannot correctthese tendencies by redirecting the focus of the unification project. If the drafting of substantive lawsresults in either compromised and largely empty content or clear-cut victories for special interests,we should not expect international efforts aimed at reforming adjectival law—e.g., a harmonizedsystem of choice of law—to do any better. The problems we have observed reflect the nature of theprocess itself, not its agenda. No matter what the task of technocratic reformers, we must expectinterest groups to have the capacity either to thwart rules that they find threatening or to capture theprocess for their own purposes.