On The Unification of Legal Rules in The European Union

Unification of legal rules in Europe in not a new phenomenon. How-ever, nowadays, Europe is still an area with many different jurisdictions. This paper studies the process of unification of legal rules in the European Union within a non-cooperative game-theoretical framework. This paper contributes to the understanding of the process by concentrating on the role of the European Commission. In the law-and-economics literature, it is argued that national legal rules will converge more or less spontaneously through the works of legislators and judges. But legal convergence in the European Union is not necessary: preferences toward legal rules differ across nation-states; substituting a legal sytem for another is costly; a coordination problem may arise. We first study the interactions of two nation-states who chose non-coope-ratively their legal rules. We shall argue that the action of the Commission is, at first sight, likely to eliminate the coordination problem (under cer-tain conditions). Two factors are at work. First, the Commission has a certain expertise which enables it to propose new and perhaps more ef-ficient rules (so that the choice of unification does not reduce to select a particular nation-state legal system). Second, the Commission may use a system of fines that induce nation-states to abide by its rules (once these rules are adopted by nation-states Next, we refine our first model: the process of legal unification is viewed as a game where nation-states choose the game that they will play. They choose if they will try to reach an agreement without resorting to the ac-tions of the Commission, or if theywill play the game implicitely proposed by the Commission. This captures more precisely the action of the Com-mission, its ”right of initiative”, the publication of proposals in ”green ” or ”white papers”. In this second model, a coordination problem may arise