Openness and change of legal institutions

Openness and change of legal institutions

The Rule of Law

Prof. Dr. Richard Frensch
Prof. Dr. Herbert Küpper
Prof. Dr. Dres. h.c. Friedrich-Christian Schroeder
RAin Tina de Vries
Stela Ivanova, LL.M.
Dr. Miriam Frey
Unversität Regensburg, Institut für Ost- und Südosteuropaforschung (IOS)
und Institut für Ostrecht (IOR), Regensburg

The Rule of Law means that the legal system is the guideline for all other standards of conduct and takes priority in all relevant fields of social interaction. The economic perspective of the Rule of Law concentrates primarily on the stability and enforceability of contracts.

Does the external liberalization of an economy have an impact on the country’s Rule of Law, thereby influencing domestic norms and rules? How does opening up an economy affect the design of legal institutions – and hence social resilience?

Right at the intersection between law and economics, we explore a society’s degrees of freedom for institutional adjustment in times of the globalization of production: we specifically do so against the background of the transformation processes in Central and Eastern Europe. We analyze two types of contracts: (i) commercial contracts of sale, i.e., contracts for transactions which particularly depend on the degree of external liberalization, and (ii) employment contracts that, at least at first sight, are mostly implemented on regulated domestic markets.

The complex processes of fragmented production are both highly dependent on the enforceability of contracts and provide incentives for the international relocation of production to different legal conditions. How do domestic legal institutions adapt to this new mobility? How do they react to changes in political and social institutions, which are also exposed to globalized processes of technological change? And how, in turn, do political institutions change under this pressure, including society’s degrees of freedom for the design of institutions? The post-socialist transformations in Eastern Europe were chosen as the context of our research because the encompassing reorganization of state, law, economy and society in this region exemplifies the questions and problems we address in a very distinct manner.