Featured Articles in Volume 58, Issue 6 (2009)

Laboratories of Democracy? Policy Innovation in Decentralized Governments

Brian Galle*
Joseph Leahy**

     Innovations in government produce positive externalities for other jurisdictions. Theory therefore predicts that local government will tend to produce a lower than optimal amount of innovation, as officials will prefer to free ride on innovation by others. As Susan Rose-Ackerman observed in 1980, these predictions, if true, tend to undermine arguments by proponents of federated government that decentralization will lead to many competing "laboratories of democracy." In this Article, we review and critically assess nearly three decades of responses to Rose-Ackerman’s arguments, none of which have been discussed in depth in the legal literature. In addition, we sketch and evaluate other possible grounds for believing that local officials may have incentives to innovate in the face of the temptation of free-riding.

     We conclude that there are no demonstrably overwhelming replies to Rose-Ackerman’s skepticism, and analyze the policy implications that follow. For instance, we suggest that one implication may be that certain regulatory regimes, such as corporate governance regulation, might best be centered at the national level, where collective action problems affecting public officials are lessened. However, we also caution that this result would depend on the likely effectiveness of industry itself propagating "good" regulation, or the effectiveness of contracting regulatory functions out to intermediaries, such as private consulting firms or nonprofit organizations, who might use property rights to more fully capture the gains of policy innovation.

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* Assistant Professor, Florida State University College of Law.
** Assistant Professor, South Texas College of Law.

The Cost of Consent: Optimal Standardization in the Law of Contract

Joshua Fairfield*

     This Article argues that informed consent to contract terms is not a good to be maximized, but an information cost that courts should minimize. As a result, courts ought to minimize the cost sum of information costs and contractual surprise. The Article applies information-cost theory to show that information-forcing rules are often inefficient at both the micro- and macroeconomic levels. Such rules also impose greater costs on third parties than the benefits they create for the contracting parties. When one consumer creates an idiosyncratic deal, the information-savings benefits of standardization are reduced for all other potential consumers. The Article demonstrates that in some cases courts are already abandoning a rigid view of contractual consent when consent is too costly; but that under other doctrines, courts insist on an inefficient level of informed contractual consent.

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* Associate Professor of Law, Washington & Lee University School of Law.

We are pleased to announce the 2009-2010 Emory Law Journal Executive Board.

Editor-in-Chief
Deepthy Kishore

Executive Notes & Comments Editor
Laura Pisarello

Executive Managing Editors
Amanda Burns
Erin East
Danny Levitas

Executive Articles Editor
Nicole Phillis

Executive Symposium Editor
Alex Whitman

Executive Marketing Editor
Devon Winkles