Saturday, February 2, 2013

Privatized Lawmaking

My new manuscript Costs of Codification is ready for submission to the journals now [please download it and take a look - your feedback is wanted].  It includes a discussion of a particular type of privatization - privatized lawmaking, especially in the form of legislative borrowing. There was a shift toward codification in the early twentieth century - all states and the federal government moved from traditional statutes-at-large, arranged chronologically, toward topically-arranged codes or statute sets.  The movement had a symbiotic relationship with the NCCUSL's Model Acts (the most successful being the Uniform Commercial Code) and the ALI's Restatements.  The codification movement created a demand for off-the-shelf, high-quality statutes with attached commentary, which came already in codified format (hierarchical sectioning and numbering, cross-references, indexing, topical sorting, and so forth); and the ready availability of these codes gave significant momentum to the codification movement that had hitherto been floundering. Network effects also apply to uniform codes and model acts - the more states adopt them, the more value they have for additional states considering whether to do so, because of the advantages of harmonization.  The network effects of uniform laws or legal harmonization, however, directly undermine the notion of "laboratories of democracy" - for better or worse.

Professor Nils Jansen published an excellent book (discussed in the article above) in 2010 entitled The Making of Legal Authority, in which he demonstrates that most codes throughout history - European, Near Eastern, and American - have been produced by private individuals or entities, not generated by the legislature itself, although many of these private law drafters worked at the behest of a monarch or legislature.  This has significant implications for our understanding of legislative enactment costs (a species of transaction costs for governance) and the commonly-held assumption that laws originate as a product of public representatives.  In more recent times, the privatization of lawmaking has accelerated with groups like ALEC and other special interests drafting highly partisan, billionaire-sponsored legislation (this occurs on both sides of the political spectrum, but the conservative generators of model acts seem to be more successful at the moment).  Codification fosters and abets this trend, making it easier for special interest groups to influence legislation - in fact, to draft the legislation that legislators will want to introduce.  

Here is the abstract from my article:
Between the Civil War and World War II, every state and the federal government shifted toward codified versions of their statutes.  Academia has so far ignored the systemic effects of this dramatic change.  For example, the consensus view in the academic literature about rules and standards has been that precise rules present higher enactment costs for legislatures than would general standards, while vague standards present higher information costs for courts and citizens than do rules.  Systematic codification – featuring hierarchical format and numbering, topical arrangement, and cross-references – inverts this relationship, lowering transaction costs for legislatures and increasing information costs for courts and citizens, as statutes proliferate.  This Article takes a first look at this problem.  On the legislative side, codification makes it easier for special interest groups to obtain their desired legislation.  It facilitates Coasean bargaining between legislators, and encourages legislative borrowing, which diminishes the “laboratories of democracy” phenomenon.  For the courts, codification changes how judges interpret statutes, prompting them to focus more on the meaning of individual words than on the overall policy goals of enactment, and to rely more on external sources, such as legislative history.  For both legislators and courts, codification functions as a Hartian rule of recognition, signaling legality for enacted rules.  For the citizenry, the reduced legislative costs mean increased legislative output, yielding rapid proliferation of statutes and unmanageable legal information costs.  More disturbingly, codification also fosters overcriminalization.  While it may not be appropriate to revert to the pre-codified regime now, reexamining the unintended effects of codification can inform present and future choices for our legal system. 

- Dru Stevenson 

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