Hadfield's Rules for a Flat World

Gillian Hadfield recently published an important new book, Rules for a Flat World: Why Humans Invented Law and How to Reinvent It for a Complex Global Economy, which is of interest to the SIOE community due to the combination of economics and legal research upon which it draws.  Rules for a Flat World builds upon Gillian's impressive body of scholarship, which explores, among other things, the foundations of legal infrastructure (see, e.g., Hadfield & Weingast, Microfoundations of the Rule of Law and Hadfield & Weingast, What is Law? A Coordination Account of the Characteristics of Legal Order) and the role of competition in the provision of regulation (see, e.g., Hadfield, Legal Barriers to Innovation:The Growing Economic Cost of Professional Control Over Corporate Legal Markets and Hadfield & Talley, On Public Versus Private Provision of Corporate Law).  Rules for a Flat World presents a nuanced yet accessible positive theory of (public and privately-ordered) law's role in markets, illustrated with examples ranging from ancient Athens, medieval Iceland, and the California Gold Rush to modern Silicon Valley.  It then draws normative implications for both developed and developing economies.  A central idea is to move toward "Markets for Rules" -- i.e., the competitive provision of legal infrastructure -- with government involvement shifted to the "superregulation" of the private rule providers.

Harvard Business School's Digital Seminar provides a useful summary discussion of the book here, and OUP's description is as follows:

The ground is shifting beneath our feet. Technology and globalization continue to uproot and reshape daily life and economics. Global supply chains are growing more deeply embedded in every region of the world. Digital platforms connect billions around the planet in ever more complex networks of data and exchange. In 2005, Thomas Friedman reduced these phenomena to one phrase, the title of his massively successful book: The World is Flat.

The flat world is one of tremendous possibility, but it also poses new challenges to stability and shared prosperity. How will we come up with the new rules we need to make sure we continue to innovate and grow but also become a fairer, safer, and more inclusive global community? Law and economics professor Gillian K. Hadfield picks up where Friedman's book left off, peeling back the technological layer to look at the rule systems that guide global integration-our legal infrastructure-and argues that our existing approaches to making rules are no longer working. They are not only too slow, costly, and localized for increasingly complex advanced economies. Our rules also fail to address looming challenges such as poverty, instability, and oppression for the four billion living in poor and developing countries, largely outside of any formal legal framework.

Following a rich and sweeping overview of the long-term evolution of social rules that made complex human societies and economic interdependence possible, Hadfield makes the case for building a more agile market-based and globally-oriented legal infrastructure. Combining an impressive grasp of contemporary economic globalization with an ambitious re-envisioning of our global legal system, Rules for a Flat World will transform our understanding of how to best achieve a more sustainable and vibrant global economy.

Gillian continues to build upon this research, recently presenting a working paper on superregulation at the SIOE annual meeting in June, so keep an eye out for further work in this important line of research.

 

Matt Jennejohn

 

 

 

 

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