On the Spontaneous Emergence of Private Law

Abstract

This article provides an explanatory framework of the spontaneous lawmaking (“SL”) process in the area of private law. To illuminate the process of the spontaneous emergence of private law, this paper focuses on three issues: (1) the conditions under which SL is likely to generate efficient norms, (2) the mechanisms that explain the emergence of norms in the absence of centralized enforcing institutions, and (3) the comparative advantages and disadvantages in terms of the efficiency of SL compared to public centralized lawmaking processes. This discussion is organized as follows. Section I defines the scope of the analysis. Section II introduces the relevant analytical tools offered by game theory and transaction-cost economics. Section III identifies the conditions for the spontaneous emergence of efficient norms. Section IV identifies three alternative mechanisms that explain the spontaneous emergence of norms. Section V examines the limitations of SL processes. Finally, Section VI provides examples of SL in the area of private law to demonstrate concretely the analytical potential of the proposed framework.