How to build European private law: an economic analysis of the lawmaking and harmonization dimensions in European private law

In the process of building a European Private Law, the lawmaking and harmonization dimensions—the modes of harmonization and even more, the scope and reach of the harmonizing effect of the European rules- appear as crucial issues. We show how the harmonization strategy is as important a question as whether we should have European Private Law at all. We present an economic discussion of the different modes of harmonizing Private Law in the abstract, and how they are likely to differently affect outcomes. We also present in informal terms a simple economic model of how to build optimal harmonized rules and standards in a setting of pre-existing separate and diverse national ones, and we systematically explore how the different harmonization regimes (maximum harmonization, minimum harmonization, and pure co-existence of harmonized and national standards) affect the outcomes of the harmonization process.