COMPARATIVE LEGAL DIAGNOSTICS∗

Giuseppe Bellantuono
University of Trento
giuseppe.bellantuono@unitn.it

February 7, 2012
Submitted for publication
Comments welcome

ABSTRACT

Is comparative law relevant for policymaking ? Many studies have shown the influence
of comparative legal research on legislators and judges. However, such influence seems
confined to those phases of the policymaking process where the main task is to draft
legal rules. In all the other phases, from agenda setting to the choice of policy options,
implementation and assessment, comparative legal knowledge is almost absent. I
suggest that comparative legal scholars interested in increasing their influence on
policymakers should provide the kind of knowledge which can be employed to frame
policy problems. To this end, comparative legal scholars should develop a diagnostic
approach to identify the main elements of the institutional context and their interactions.
Drawing on the works of Elinor Ostrom, Oran Young and Dani Rodrik, I explain how
comparative legal diagnostics could accomplish many different goals: ease
communication between the academic world and policymakers, foster cooperation
between legal scholars and social scientists, and drive comparative legal scholars toward
useful syntheses on major methodological battles. The debate on European contract law
is used to describe the main analytical steps of the diagnostic approach.

∗
Professor of Comparative Law, University of Trento, Italy. A previous version of this paper was
presented at the XXI Biennial Conference of the Italian Association of Comparative Law, Venice, Italy,
9-11 June 2011. © Giuseppe Bellantuono 2011.

Electronic copy available at: http://ssrn.com/abstract=2000608

Table of contents:

I Introduction: comparative law and policymaking

II Comparative legal knowledge: when, what and for whom ?
III Examples of institutional diagnostics
A Elinor Ostrom
B Oran Young
C Dani Rodrik
IV Comparative legal diagnostics for European contract law
A The proposal for an optional instrument on European contract law
B Reframing European contract law
V Conclusions: is comparative legal diagnostics possible ?

Electronic copy available at: http://ssrn.com/abstract=2000608

 I Introduction: comparative law and policymaking

Is comparative law relevant for policymaking ? This is not a new question.1 Over
the years, it has been given an affirmative answer by the many comparative studies
explicitly addressed to legislators, governments and judges. Although criticisms about
misguided application of comparative lessons by policymakers are frequently heard,
those studies show that some kind of reference to foreign experiences is often visible in
the background of legal decisions.2
But things get more complicated when one looks closer. It is well known that the
policy process includes several stages, from agenda setting to policy termination.
According to textbook descriptions, at least eight phases can be identified. Table 1
shows that the influence of comparative legal scholars can be described as strong in
only two phases, policy formulation and policy adaptation. In both cases the main task
is to transform policy choices in black letter rules. Not surprisingly, this is where
comparative legal scholars enjoy a quasi-monopolistic position in their role as advisers
of policymakers, the only exception being competition from other non-comparative
legal scholars.

1
See, e.g., M.S. McDougal, ‘The Comparative Study of Law for Policy Purposes: Value Clarification as
an Instrument of Democratic World Order’, (1952) 1 American Journal of Comparative Law 24, 38-57
(proposing to organize comparative studies of decision-making processes and of their effects on values
under the four headings of power processes (global, national and local), value processes, private
associations, and policy procedures). As is well know, in his long-term collaboration with political
scientist Harold D. Lasswell, Myres McDougal developed a policy-oriented approach to international law,
later to be identified as the New Haven School. On its enduring influence see generally the articles
collected in ‘The “New” New Haven School: International Law – Past, Present and Future’, (2007) 32
Yale Journal of International Law 301-582.
2
On legislators see, e.g., J.M. Smits, ‘Comparative Law and Its Influence on National Legal Systems’, in
M. Reimann and R. Zimmermann (eds), The Oxford Handbook of Comparative Law (Oxford University
Press, 2006), 477; D. Barak-Erez, ‘An International Community of Legislatures?’, in R.W. Bauman and
T. Kahana (eds), The Least Examined Branch: The Role of Legislatures in the Constitutional State
(Cambridge University Press, 2006), 532. References to the use of comparative law by the German
legislator and the UK Law Commission can be found in B. Markesinis and J. Fedtke, Engaging with
Foreign Law (Hart Publishing, 2009), 177-182, 387-396. On judges see, e.g., U. Drobnig and S. Van Erp
(eds), The Use of Comparative Law by Courts (Kluwer Law International, 1999); G. Canivet et al. (eds),
Comparative Law Before the Courts (British Institute of International Comparative Law, 2004); B. Markesinis
and J. Fedtke, Judicial Recourse to Foreign Law: A New Source of Inspiration ? (Routledge-Cavendish, 2006);
G.F. Ferrari and A. Gambaro (eds), Corti nazionali e comparazione giuridica (Edizioni Scientifiche Italiane,
2006); G. Alpa (ed), Il giudice e l’uso delle sentenze straniere (Giuffrè, 2006); G. De Vergottini, Oltre il
dialogo tra le corti: giudici, diritto straniero, comparazione (il Mulino, 2010).

3
 Table 1. The policy process and comparative law
Phases of the policy Characteristics Influence of comparative
process legal scholars
Agenda setting Policymakers decide Absent
which problems to place on
the public agenda and which
to address
Policy formulation Policymakers formulate Weak
alternative policies to deal
with a problem
Policy adoption A policy is adopted with a Strong
legislative or agency decision
Policy implementation An adopted policy is Absent
carried out by administrative
units
Policy assessment Compliance with the Absent
requirements and objectives of
the policy is assessed
Policy adaptation Responsible agencies Strong
signal the changes to poorly
written regulations and the
need for additional resources
Policy succession The policy is redirected Absent/weak
toward a new problem or a
new goal
Policy termination It is decided that a policy Absent
or an entire agency is no
longer needed
Source: adapted from W.N. Dunn, Public Policy Analysis: An Introduction
(Pearson, 4th ed., 2008), 46.

4
 In all the other phases of the policy process, several different categories of social
scientists play a leading role: economists, socio-legal scholars, political science
scholars, policy analysts, public administration and public management scholars.
Moreover, in the last decades a large number of non academic suppliers of (some kind
of) ‘comparative’ information has gained a strong foothold in the policymaking process.
They are international organizations like the World Bank and the OECD, consulting
firms, think tanks, industry and consumer associations. Conversely, the influence of
comparative legal scholars is weak or absent.
To back up with empirical evidence observations about the relevance of a specific
group of scholars or a methodology is not easy. Direct measurement is sometimes
impossible. For example, it is often the case that the use of foreign models is not
acknowledged or even hidden. Furthermore, many factors usually affect any
institutional change and disentangling causal threads is never easy. Another problem is
the variety of policymakers and the channels of diffusion of foreign ideas. In many
cases, little is known about these processes. This means that the influence of
comparative legal knowledge can be stronger or weaker, depending on the type of
policymaker, the institutional context of each country, or the specific features of the
legal issue or sector.
Of course, the influence of academics in general is highly controversial. In the
social sciences there are countless descriptions of the frustrating experience of being
unheard, misunderstood or even manipulated by policymakers.3 From this point of
view, complaints by comparative legal scholars that their studies and methodology are
overlooked would add nothing to well known communication problems between theory
and practice. Still, there are some questions worth asking. Firstly, what should be the
role of comparative legal scholars in today’s competitive environment, with plenty of
sources of comparative information ? Should they invest all their resources in legal
drafting, or aspire to influence other stages of the policy process ? Secondly, are there
aspects of comparative legal studies which hamper communication with policymakers ?
And is there anything which can be done to improve such communication ?

3
For an extreme view see S.D. Krasner, ‘Government and Academia: Never the Twain Shall Meet, Well
Almost Never’, (2009) 22 Cambridge Review of International Affairs 111, 116 (‘the “gap” between
academia and the policy world is unbridgeable’).

5
 Behind these questions lie a lot of thorny methodological issues. Many scholars
would take issue with the idea of developing comparative knowledge for policymaking
purposes. Some authors argue that legal doctrine has been too prone to the goals of EU
institutions, has uncritically accepted an instrumental view of law and has not deployed
a legal methodology able to expose the weaknesses of the EU policymaking process.4
Other authors argue that comparative law will survive in the twenty-first century only if
it puts aside much theoretical baggage and “packages” comparative knowledge in ways
that make it readily available to legislators, judges and legal practitioners.5
My goal in this paper is not to settle the current controversies about legal and
comparative methodology. It is a much more modest one: to try to understand what kind
of comparative legal knowledge is needed by policymakers and how it can be
communicated to them. This perspective relies on the following methodological
premises. First of all, I assume that, at least for some problems and some sectors, an
instrumental view of law is justified. I take no stance about the goals to be pursued, but
reject the view that a comparative analysis should not try to assess the impact of the
different legal options available to decision-makers.6 Secondly, I assume that an
interdisciplinary approach is needed. More specifically, I argue that, to increase its
relevance for policymaking purposes, comparative law should draw inspiration from
and adopt the analytic tools of comparative methodology in other social sciences.
However, I leave open the issue of the degree of integration among law and social
sciences.7 Different research designs can be equally valuable and the many trade-offs
involved in interdisciplinary research cannot be solved once and for all.

4
See R. van Gestel and H.-W. Micklitz, ‘Revitalizing Doctrinal Legal Research in Europe: What About
Methodology?’, EUI Working Papers Law 2011/05.
5
Markesinis and Fedtke, Engaging with Foreign Law, n 2 supra, 75 (‘Necessity, practical commercial
necessity, is what will make the study of foreign law grow further and deeper’).
6
According to R. Michaels, ‘The Functional Method of Comparative Law’, in Reimann and
Zimmermann, n 2 supra, 375, ‘evaluation remains a policy decision under conditions of partial
uncertainty. The functional method can show alternatives and provide some information, but it cannot
substitute this policy decision.’ I agree that no discipline will ever be able to become the exclusive
determinant of policy decisions. This is true for social sciences, too. However, the issue discussed in this
paper is how to go beyond simple description of alternative foreign models and to communicate to
policymakers comparative information which can help them to assess the consequences of institutional
choices.
7
For recent discussions see D. Vick, ‘Interdisciplinarity and the Discipline of Law’, (2004) 31 Journal of
Law and Society 163; M.M. Siems, ‘The Taxonomy of Interdisciplinary Legal Research: Finding the Way
Out of the Desert’, (2009) 7 Journal of Commonwealth Law & Legal Education 5; G. Samuel,
‘Interdisciplinarity and the Authority Paradigm: Should Law Be Taken Seriously by Scientists and Social
Scientists ?’, (2009) 36 Journal of Law and Society 431; B. Van Klink and S. Taekema, ‘On the Border.

6
 My own choices about interdisciplinarity reflect a personal judgement on current
needs and problems of comparative legal research. In the nineties comparative law and
economics promised to provide comparative lawyers with the tools for more accurate
assessments of similarities and differences and of their economic consequences. To a
large extent, that promise was not kept. The economic methodology took the lead and
adopted many simplifying assumptions. Aside from a few important exceptions, it did
not come to grips with the demand for a thorough exploration of the institutional
context raised by comparative legal research.8
These observations do not lead to the conclusion that interdisciplinary efforts in
comparative law should be abandoned. What is needed is a more focused attempt to
face squarely the hurdles any policymaker shall overcome whenever she tries to draw
on comparative knowledge. To date, answers like synthetic indicators of institutional
quality and ‘best practices’ appear much less than satisfactory.9 I suggest instead to rely
on those streams of social science literature which propose a diagnostic approach to
deal with the main issues of institutional design.

Limits and Possibilities of Interdisciplinary Research’, in B. Van Klink and S. Taekema (eds), Law and
Method: Interdisciplinary Research into Law (Mohr Siebeck, 2011), 7.
8
One of the causes for this unfortunate outcome seems to be that only a handful of full-time comparatists
have devoted their attention to Law and Economics. In the two collections of essays edited by Gerrit De
Geest and Roger Van den Bergh (not comparatists themselves), only 8 authors (out of 66 contributions)
can be easily identified as comparative legal scholars (Bussani, Ginsburg, Kötz, Mattei, Ogus, Palmer,
Parisi, Ramseyer). See G. De Geest (ed), Economics of Comparative Law (Elgar, 2009); G. De Geest and
R. Van den Bergh (eds), Comparative Law and Economics (Elgar, 2004), three volumes. The debate on
the European Common Frame of Reference for Private Law could give a new turn to comparative law and
economics. See, e.g., J. Smits (ed), The Need for a European Contract Law: Empirical and Legal
Perspectives (Europa Law Publishing, 2005) (contributions by G. Wagner and Smits); G. Wagner (ed),
The Common Frame of Reference: A View from Law and Economics (Sellier, 2009) (contributions by
Faust, Schmidt-Kessel, Unberath and G. Wagner); P. Larouche and F. Chirico (eds), Economic Analysis
of the DCFR (Sellier, 2010) (contributions by Ogus and Kovač). However, it is doubtful whether social
sciences had any impact on the DCFR: see S. Grundmann, ‘The Role of Competition in the European
Codification Process’, in H.-W. Micklitz and F. Cafaggi (eds), European Private Law After the Common
Frame of Reference (Elgar, 2010), 40 (‘social sciences have been excluded from the process’); F. Gomez,
‘The Empirical Missing Links in the Draft Common Frame of Reference’, ibid, 101-122 (insufficient use
of empirical evidence); F. Chirico et al., ‘Conclusion’, in Larouche and Chirico, 322 (‘(e)conomic
analysis was not used, and neither were the policy choices underpinning private law investigated in
depth’) .
9
For criticisms of legal indicators see K.E. Davis et al., ‘Indicators as a Technology of Global
Governance’, forthcoming (2012) 46 Law and Society Review; G. Bellantuono, ‘Comparing Regulatory
Decision-Making in the Energy Sector’, (2010) 1(2) Comparative Law Review 1, available at
www.comparativelawreview.com (last visited February 6, 2012). For criticisms of best practices see C.M.
Radaelli, ‘The Diffusion of Regulatory Impact Analysis - Best Practice or Lesson-Drawing ?’, (2004) 43
European Journal of Political Research 723; R. Rose, Learning From Comparative Public Policy: A
Practical Guide (Routledge, 2005), 38-40; M. Lodge, ‘The Importance of Being Modern: International
Benchmarking and National Regulatory Innovation’, (2005) 12(4) Journal of European Public Policy 649; D.
Zaring, ‘Best Practices’, (2006) 81 New York University Law Review 294.

7
 A diagnostic approach explicitly relies on analogies to the medical sciences, but
also to biology, architecture and engineering. The basic idea is to identify the set of
variables which affect a specific policy problem and list the main patterns of interaction.
The diagnostic approach does not provide ready-made solutions and rejects attempts to
supply universal answers. Its main strength lies in the guide it can provide to
policymakers dealing with complex governance issues. Most importantly for the
purposes of this paper, the variables to take into account are identified inductively on
the basis of the comparison of a large number of situations in different parts of the
world. This built-in comparative dimension already explains why comparative lawyers
10
should try to make them familiar with the diagnostic approach. But other two
advantages can be pointed out: the first relates to the internal debate among comparative
lawyers, the second to the external debate with social scientists.
Regarding the internal debate, it is clear that comparative lawyers never agreed on a
common methodology. Goals, analytic tools, objects of study, underlying ontological
and epistemological premises are constantly debated and the views of different schools
subject to heated debates. A comment often heard is that methodological pluralism is
not to be condemned. However, this state of affairs has one major drawback:
comparative legal research rarely produces cumulative knowledge.11 Other social
sciences dealt with the same problem in the past and strived to find compromise
solutions which balanced the freedom of individual researchers and the need to develop
comparable definitions and data. The diagnostic approach is a move in this direction. It
does not force each researcher to accept other researchers’ judgments about which
variables and which patterns of interaction are more important. It only provides a
general framework to start a dialogue among different schools. More specifically, it
addresses one of the most contentious issues in comparative law literature, namely the
relevance of the social and institutional context. The list of potentially relevant
variables which could affect the final outcome is almost endless. Each researcher is free
10
As will become clear in the following sections, a diagnostic approach is not that different from the type
of analysis lawyers sometimes undertake. For an explicit reference to a diagnostic model which should
aid the interpreter to tease out the cause of the interpretative doubts and to identify the starting points for
arguments about competing interpretations see W. Twining and D. Miers, How to Do Things with Rules
(Cambridge UP, 5th ed., 2010), 176-190.
11
This problem was already highlighted by D.J. Gerber, ‘System Dynamics: Toward a Language of
Comparative Law?’, (1998) 46 American Journal of Comparative Law 719, 722f. (lack of a broader
conceptual framework for organizing knowledge and relating discrete pieces of information to each
other).

8
to invest her resources in exploring those variables she sees as more promising.
Disagreements among schools will not disappear, but their meaning will become
clearer.
Regarding the external dimension of the debate, it seems that policy-relevant
comparative law cannot isolate itself from debates going on in other social sciences.
Comparative knowledge produced from the latter is often employed and financed by
international organizations like the World Bank, the IMF or the OECD, by regional
institutions like the EU and by transnational regulatory or governmental networks.
Comparative law has its own contribution to make, but it seems difficult to believe that
its language and concepts will be acceptable to policymakers if the links with other
social sciences are not explained.
Interdisciplinarity promises other benefits as well. Comparative law and other social
sciences compete for the attention of policymakers. Trying to use a widely known
conceptual framework means increasing the probability that the relevance of
comparative legal research is acknowledged. This in turn can foster the formation of
interdisciplinary research teams, without doubt the quickest way to assemble the
expertise needed to apply different methodologies to the analysis of the same policy
problem. Also, the diagnostic approach goes a long way toward ensuring that there will
be a two-way exchange between legal and social sciences.12 Finally, researchers are not
forced to choose a specific type of interdisciplinary inquiry. Contributions from
different disciplines can be easily integrated within the same general framework.13
The paper is organized as follows. Section II collects evidence on the influence of
comparative law in the policymaking process and explains what kind of comparative

12
On the aspects of legal research which could be of interest for other social sciences see C. McCrudden,
‘Legal Research and the Social Sciences’, (2006) 122 Law Quarterly Review 632, 645-649 (suggesting
that legal research could provide conceptual clarity, a better understanding of legal dynamics and of the
role of the institutional context, as well as normative prescriptions); G. Samuel, ‘Does One Need an
Understanding of Methodology in Law Before One Can Understand Methodology in Comparative Law
?’, in M. Van Hoecke (ed), Methodologies of Legal Research: What Kind of Method for What Kind of
Discipline (Hart Publishing, 2011), 177, 205-208 (arguing that the appraisal of social reality through legal
concepts, however partial it is, can teach interesting lessons to social scientists).
13
There is no shortage of proposals for interdisciplinary approaches to comparative law. Besides
economics, the most recent ones include cognitive psychology [J. De Coninck, ‘Overcoming the Mere
Heuristic Aspirations of (Functional) Comparative Legal Research ? An Exploration into the Possibilities
and Limits of Behavioral Economics’, (2009) 9(4) Global Jurist – Topics, Issue 3] and the theory of
complex systems [D.J. Gerber, ‘Method, Community & Comparative Law: An Encounter with
Complexity Science’, (2011) 16 Roger Williams University Law Review 110]. Both disciplines are
integrated into the conceptual framework developed by Elinor Ostrom: see below section III A.

9
knowledge has better chances to be usable by policymakers. Section III describes the
main features of the diagnostic approaches developed by two political scientists (Elinor
Ostrom and Oran Young) and one economist (Dani Rodrik) and explains how they can
be integrated into comparative legal research. Section IV applies the diagnostic
approach to the debate on European contract law. Section V proposes some concluding
remarks.

II Comparative legal knowledge: when, what and for whom ?

It is a well known feature of policymaking processes that no kind of scientific

external expertise can be easily exploited and directly affect the final outcomes.14 More
often than not, it is used selectively, as an ex-post justification for decisions reached on
other grounds, and for purposes other than those it was intended to address. The quality
of the knowledge provided to policymakers is just one among a large set of conditions
leading to its adoption. Rhetorical persuasion, windows of opportunity, support from
well-organized coalitions and presentation formats can weight more heavily than
methodological accuracy. More generally, the interaction between researchers and
policymakers is dependent on the respective preferences and beliefs, on the goals to be
pursued and the characteristics of the policymaking process. In sum, attempts at
transferring knowledge from academic research to policy practice can produce wildly
different outcomes: learning can happen or not; it can be partial, symbolic, selective or
superficial; it can lead to change or to the maintenance of the status quo.15
This gloomy picture does not inevitably lead to a pessimistic view about the
influence of scientific knowledge. A more fruitful course of action is to find out the
types of knowledge which can be more easily absorbed by the policymaking process.
Because of the hurdles mentioned above, part of this analysis consists of exploring
existing and proposed channels of communication between academics and
policymakers.

14
See K. Bogenschneider and T. Corbett, Evidence-based Policymaking: Insights from Policy-Minded
Researchers and Research-Minded Policymakers (Routledge, 2010) (exploring reasons for the disconnect
between research and policy).
15
See, e.g., M. Evans, ‘Policy Transfer in Critical Perspective’, (2009) 30 Policy Studies 243 (discussing
obstacles to policy-oriented learning); C.A. Dunlop, ‘Policy Transfer as Learning: Capturing Variation in
What Decision-Makers Learn from Epistemic Communities’, ibid, 289 (distinguishing different levels of
control by policymakers on the production of knowledge and the goals to be pursued).

10
 What kind of strategies do social sciences deploy to bridge the gap between
academic research and policy practice ? The answer is very much dependent on the
perspective each scientific discipline brings to the table, including its analytic tools and
the issues it pays attention to. According to one influential position in political science,
academic research should provide policymakers with information about the way a
specific strategy works in practice, the conditions under which it can be successfully
deployed and the reactions to be expected by the addressees.16 This proposal is
grounded on clear choices about the type of causal explanations which are worth
exploring and the kind of empirical evidence to be sought to identify them.
As Table 1 shows, comparative law does not seem relevant outside the drafting
phases of the policy process. Like other social sciences, comparative law, too, should
try to bring its own perspective to the table. To this end, the best strategy is to try to
increase its influence in the early phases, that is agenda-setting and policy formulation.
It is widely believed that how a policy problem comes to be perceived and structured is
the most important aspect in the whole process. All the other phases, from policy
adoption down to policy evaluation, will be affected by the shape the problem has been
given at the beginning of the process.17 Hence, comparative legal research has more
chances to become relevant in all the phases if it is able to give its contribution to the
structuring of the policy problem.
Is there evidence that comparative law regularly influences the framing of policy
problems ?
The opposite seems to be true. For example, it has been observed that the classic
textbooks of comparative law do not provide the type of knowledge which is needed to
understand complex regulatory systems.18 In an indirect way, the irrelevance of
comparative law is testified by World Bank programs like the Doing Business Annual
Reports, which devise a methodology to rank legal systems. Despite strong criticisms
by comparative legal scholars, the Doing Business Reports make headlines in the most

16
see A. L. George and A. Bennett, Case Studies and Theory Development in the Social Sciences (MIT
Press, 2006), 263-285.
17
See, e.g., W.N. Dunn, Public Policy Analysis: An Introduction (Pearson, 4th ed., 2008), 72.
18
Markesinis and Fedtke, Engaging with Foreign Law, n 2 supra, 348 (‘Will [the books of great
comparatists like Zweigert, Kötz, David and Sacco] play a role when dealing with the intricate problems
created by today’s increasingly complex regulatory frameworks … ? … Hardly’).

11
important newspapers, prompt reforms by national governments and affect funding
policies of international organizations.19
The argument here is not that comparative law is never able to frame policy
problems. Examples of its influence on the public debate may be found in some areas of
great social relevance, e.g. constitutional law and human rights.20 But it seems difficult
to deny that comparative legal knowledge is used selectively in some cases, and
completely discarded in other cases. Even when some kind of comparative information
is needed, other social sciences supply it, of course relying on their own methodologies.
Therefore, the most important question is why in some (probably many) cases
comparative law loses the race with other comparative social sciences. Part of the
answer seems to lie in important differences between the way a legal problem worthy of
comparative attention is identified on one hand and a policy problem is framed on the
other. Let us discuss identification procedures for each of them, starting with policy
problems.
A widely shared view is that policy problems do not exist out there. Usually, a
dominant frame emerges from the confrontation among the many alternatives proposed
by each category of stakeholders and comes to be accepted by policymakers as the only
legitimate definition.21 As a consequence, a policy change often requires a reframing
activity, that is a new definition of the policy problem. Several theories try to explain

19
On the irrelevance of comparative law see M.M. Siems, ‘The End of Comparative Law’, (2007) 2
Journal of Comparative Law 133. Interestingly, alternative indexes have been proposed by comparative
legal scholars, but they seem unable to attain the same public recognition as the Doing Business Reports.
See, e.g., H. Spamann, ‘The “Antidirector Rights Index” Revisited’, (2010) 23 Review of Financial
Studies 467; M. Siems and S. Deakin, ‘Comparative Law and Finance: Past, Present, and Future
Research’, (2010) 166 Journal of Institutional and Theoretical Economics 120. In a different context, M.
Reimann and D. Halberstam, ‘Top-Down or Bottom-Up ? A Look at the Unification of Private Law in
Federal Systems’, in R. Brownsword et al (eds), The Foundations of European Private Law (Hart
Publishing, 2011), 363, 371, carry out an empirical study showing that the impact of model rules drafted
by non-state actors is of little practical significance for choices about the desired degree of
unification/harmonization.
20
One important example of the influence of the legal profession is its role in the invention of a European
rule of law whose features are markedly different from those of national legal traditions. Even here,
however, recent developments of the European institutional framework show a decline in the influence of
legal professionals in favour of economists: see A. Vauchez, ‘The Force of a Weak Field: Law and
Lawyers in the Government of the European Union (for a Renewed Research Agenda)’, (2008) 2
International Political Sociology 128.
21
See Dunn, Public Policy Analysis, n 17 supra, 75 (‘Problems have no existence apart from the
individuals and groups who define them, which means that there are no “natural” states of society which
in and of themselves constitute policy problems’).

12
how a frame becomes dominant and how it can be changed.22 For our purposes, the
most interesting point is what kind of activities are involved in problem structuring. The
salient features of the problem must be singled out and classified. Its interdependencies
with other problems must be identified. Its boundaries must be clarified. Of course,
whether the problem is perceived to belong to the economic, political, social or
technological realm affect the type of factors that will be taken into account.23 But all
the structuring activities share the same goal of helping policymakers to devise a
problem-solving strategy. To put it in another way, problem structuring activities reduce
the bewildering complexity of reality to a few dimensions that are amenable to an
external intervention.
Comparative law has its own procedures to identify relevant problems.
Traditionally, the main concern has been the difference among legal concepts used in
each legal system. The external observer is faced with the difficulty of describing and
explaining a foreign legal system in terms which can be understood by a foreign
audience.24 Several comparative methodologies have been developed to deal with this
issue. Functional comparative law tries to single out those aspects which are more
relevant to explain the tasks performed by a specific rule or institution. Alternatively,
the elements contributing to a legal outcome (so called legal formants) are
disaggregated to explain their relevance in each situation. Further, an historical inquiry
can help establish the origins of legal concepts and how their meaning has changed over
the years. Finally, analytic tools from other disciplines (e.g. economics, sociology or
anthropology) can be used to propose a new classification of legal issues or to provide
normative benchmarks.
While the methodologies employed to structure a policy and a legal problem are
clearly divergent, they share the common goal of identifying a few relevant dimensions
in a huge stream of social, economic, political and institutional events. This
22
See F. Polletta and M.K. Ho, ‘Frames and Their Consequences’, in R.E. Goodin and C. Tilly (eds), The
Oxford Handbook of Contextual Political Analysis (Oxford University Press, 2006), 187; M. Hajer and D.
Laws, ‘Ordering Through Discourse’, in M. Moran et al. (eds), Oxford Handbook of Public Policy
(Oxford University Press, 2006), 251, 256-259; M. Rein, ‘Reframing Public Policy’, ibid, 389.
23
See Dunn, Public Policy Analysis, n 17 supra, 95-115 (describing methods of problem structuring);
B.G. Peters and J. Hoornbeek, ‘The Problem of Policy Problems’, in P. Eliadis et al. (eds), Designing
Government: From Instruments to Governance (McGill-Queen’s University Press, 2005), 77 (describing
a set of dimensions to characterize problems and match them with effective policy instruments).
24
On the need to ‘package’ comparative legal research see B. Markesinis, Comparative Law in the
Courtroom and the Classroom (Hart Publishing, 2003). On communication see J. Bell, ‘Legal Research
and the Distinctiveness of Comparative Law’, in Van Hoecke, Methodologies, n 12 supra, 172-175.

13
commonality should be exploited to increase the relevance of comparative law in the
policymaking process. One of the reasons hindering a broader reliance on comparative
legal knowledge is the lack of a clear connection between the internal point of view of
legal analysis and all the other dimensions of policy problems. This means that
comparative law can start to become usable knowledge for policymakers if its research
outputs are placed in the broader framework employed for structuring policy-problems.
A diagnostic approach to comparative law is meant to accomplish just this task. Its
main strength is to force the researcher to dissect its object of study and to explain
which dimensions are relevant and why. At the same time, the diagnostic approach
leads almost automatically to ask questions about interdependencies and causality.
Therefore, comparative legal data can be organized in a presentation format which
makes it easier to see the links with extra-legal dimensions of a policy problem.25
To be sure, the shift from the internal to the external point of view does involve
some major revisions in comparative methodology. For example, in policy-oriented
analysis legal concepts are not relevant for their own sake, but because of the
constraints they impose or the opportunities they open. Additionally, research questions
should be redirected toward those issues policymakers are more interested in. This is
what has happened to all the social sciences, sometimes with sharp divides between
more theoretically-oriented and applied research. Looking at those examples, there is no
reason to suppose that policy-oriented comparative law will be of lower quality than
research not specifically addressed to policymakers. Opening up new channels of
communication does not lead to the adoption of worse methodological canons. Indeed,
talking to a different audience can prompt important advancements on hitherto
underexplored subjects. Two examples are worth mentioning here.

25
Research undertaken on behalf of the UK government lends support to the idea that policymakers need
an approach which helps them arrange comparative evidence. Cabinet Office, Beyond the Horizon:
Workbook, Centre for Management and Policy Studies, February 2002, available at
http://www.nationalschool.gov.uk/policyhub/ (last visited February 6, 2012), is a toolkit to systematically
collect and assess evidence on policies or programs implemented in other countries. It was organized
according to the stages of the policy process. Six analytical categories (actors, policy arena, institutions,
interests and ideas, constraints and pressures) were used to prompt inquiry into the main contextual
factors. As argued by A. Wyatt and S. Grimmeisen, ‘Beyond the Horizon: Background to the
Development of the Toolkit’, February 2002, available at http://www.nationalschool.gov.uk/policyhub/
(last visited February 6, 2012), “The method proposed by the workbook is […] intended to spread a net as
widely as possible to capture data that might be relevant, and to enable both the simple model and the
complex context to be mapped”.

14
 First of all, the classic topic of legal transplants can be revisited to take into account
the learning processes of policymakers. What should be explained is how and when the
latter are able to draw on foreign examples to frame a policy problem, to consider new
options or to employ new tools. The comparative law literature did not invest heavily on
this subject because knowledge exchange was assumed to take place between the legal
elites of the importing and exporting countries.26 Today the landscape to be explored is
much more fragmented. On the supply side, many organizations compete to offer their
scientific products. On the demand side, the addressees of comparative knowledge can
be located at different levels of a governance systems, can be more or less constrained
in their ability to use such knowledge, and be able to exert a greater or lesser degree of
control on the learning process itself. Several streams of literature on policy learning,
lesson-drawing and knowledge utilization provide useful models on these issues.27 A
diagnostic approach for comparative law should draw on those contributions, both to
select the legal factors to be communicated to policymakers and to design suitable
presentation formats.
The second example has to do with the relevance of cross-country differences in the
policymaking processes. It has been observed that the distinguishing features of
presidential and parliamentary political systems directly affect the administrative action.
In presidential systems the competition between the legislative and executive branches
leads to the bureaucracy pursuing its own political agenda and to a strong dose of
procedural legalization. Conversely, parliamentary systems lack the incentives to
promote both developments. Other differences in the American and European
administrative process can be detected, for instance from the point of view of the access

26
But see M. Graziadei, ‘Legal Transplants and the Frontiers of Legal Knowledge’, (2009) 10
Theoretical Inquiries in Law 723, who draws on psychological theories to explain individual behaviour
leading to legal transplants; G. Shaffer, ‘Transnational Legal Process and State Change’, forthcoming
(2012) 37 Law & Social Inquiry (change in normative frames prompted by transnational legal processes).
27
In addition to the sources referred to above, note 15, see, for an overview of theories of policy learning,
R. Freeman, ‘Learning in Public Policy’, in Moran et al., Oxford Handbook of Public Policy, n 20 supra,
367; A.R. Zito and A. Schout, ‘Learning Theory Reconsidered: EU integration Theories and Learning’,
(2009) 16 Journal of European Public Policy 1103. On lesson-drawing see Rose, Learning From
Comparative Public Policy, n 9 supra; M. Evans, ‘At the Interface Between Theory and Practice – Policy
Transfer and Lesson-Drawing’, (2006) 84 Public Administration 479 (review of Rose’s book). On
knowledge utilization see S. Nutley, ‘From Knowing to Doing: A Framework for Understanding the
Evidence-into-practice Agenda’, (2003) 9 Evaluation 125; P. Burton, ‘Modernising the Policy Process’,
(2006) 27 Policy Studies 173; L. Schrefler, ‘The Usage of Scientific Knowledge by Independent
Regulatory Agencies’, (2010) 23 Governance 309. Of course, different types of learning or diffusion
mechanisms can work simultaneously: on possible interactions see D. Marsh and J.C. Sharman, ‘Policy
Diffusion and Policy Transfer’, (2009) 30 Policy Studies 269, 272-274.

15
to the policymaking process: in the US, all groups with the needed resources try to
influence the final outcome; in the EU, access can be broadly granted on a formal level,
but only a few major players have real chances to influence the process.28 Given these
and other differences, a diagnostic approach to comparative law can be tailored to the
local variants of the administrative process. Depending on the goals and training of
bureaucrats, comparative legal knowledge can be presented in a format which increases
its chances of being used. Moreover, it can be addressed to those actors who play a
pivotal role in each policymaking process.29

III Examples of institutional diagnostics

This section describes the main features of the diagnostic approach proposed in
different sectors by three scholars. Their contributions started a lively debate which has
led to significant improvements and extensions of the original frameworks. The
language and concepts employed by each scholar display some differences. However, I
will highlight those commonalities that bear directly on the methodological debate of
comparative law. Subsection A starts with the description of the work of Elinor Ostrom
and the Bloomington School. Theirs is the most sustained attempt to develop the tools
for a diagnostic approach over the last three decades. Subsection B turns to more recent
contributions by Oran Young in the field of environmental sustainability, themselves

28
See F. Bignami, ‘From Expert Administration to Accountability Network: A New Paradigm for
Comparative Administrative Law’, (2011) 59 American Journal of Comparative Law 859. On framing
legislation in the EU see also P.L. Strauss, ‘Rulemaking in the Ages of Globalization and Information:
What American Law Can Learn From Europe, and Vice Versa’, (2006) 12 Columbia Journal of
European Law 645. For comparative analyses of the American and European policy process in the
political science literature see C. Mahoney and F. Baumgartner, ‘Converging Perspectives on Interest
Group Research in Europe and America’, (2008) 31 West European Politics 1253; S. Princen, Agenda-
Setting in the European Union (Palgrave, 2009), 44-79; É. Montpetit, ‘Governance and Policy Learning
in the European Union: A Comparison with North America’, (2009) 16 Journal of European Public
Policy 1185.
29
For example, it has been suggested that American lawyers directly contribute to shape regulation [P.
Schmidt, Lawyers and Regulation: The Politics of the Administrative Process (Cambridge UP, 2005),
219: ‘Lawyers furnish meanings that cut a path between the public and private interests’]. This is clearly a
by-product of the strong legalization of the administrative process. In the European context, the
involvement of lawyers in the regulatory process is less visible, but the same point can be repeated:
identify the pivotal actors and devise a strategy to open a communication channel. For a more general
perspective see T.E. James and P.D. Jorgensen, ‘Policy Knowledge, Policy Formulation, and Change:
Revisiting a Foundational Question’, (2009) 37 Policy Studies Journal 141 (suggesting to merge
knowledge utilization and policy process scholarship to explain how the content of a policy was
constructed, what information was included and excluded, what function did information satisfy, how
contextual factors affected its utilization).

16
critically related to Ostrom’s work. Subsection C describes the approach proposed by
Dani Rodrik and his suggestions to improve the policies aimed at fostering economic
growth in developing countries. In each of these three subsections, the final part is
devoted to comments on the relationship between the different versions of the
diagnostic approach and comparative legal research.

A Ostrom

Elinor Ostrom is among the founders of the Workshop in Political Theory and
Policy Analysis at Indiana University, Bloomington. In 2009 she was the first woman to
win the Nobel Prize in Economics, although her scientific background is in the fields of
political science and public administration.30 Her best known contributions relate to the
governance regimes for common-pool resources. However, those studies should be seen
as specific applications of a much broader conceptual framework for the analysis of a
large number of institutional settings. The Institutional Analysis and Development
(IAD) framework was first proposed in the eighties and then further refined and
expanded over the years. The diagnostic approach builds on those early efforts. I will
now provide a short description of the IAD framework and its further developments.
The main goal of Ostrom’s approach is to provide a metatheoretical framework
which encompasses all situations where humans interact. The high number of variables
and their possible combinations lead each discipline to develop its own language and to
focus on different aspects. The IAD framework performs the function of a conceptual
map which, much like geographical maps, guides scholars from different disciplines
toward a common understanding of the impact that institutions have on individuals’ and
organizations’ behaviour. From families to markets to legislatures and government

30
For autobiographical accounts of her career see E. Ostrom, ‘Beyond Markets and States: Polycentric
Governance of Complex Economic Systems’, (2010) 100 American Economic Review 641; E. Ostrom,
‘A Long Polycentric Journey’, (2010) 13 Annual Review Political Science 1. Wide-ranging descriptions
of Ostrom’s multifaceted scholarship can be found in P.D. Aligica and P. Boettke, Challenging
Institutional Analysis and Development: The Bloomington School (Routledge, 2009); T.C. Bergstrom,
‘The Uncommon Insight of Elinor Ostrom’, (2010) 112 Scandinavian Journal of Economics 245; M.D.
McGinnis, ‘Elinor Ostrom: Politics as Problem-Solving in Polycentric Settings’, in D. Campus et al. (eds)
Maestri of Political Science, vol. II (ECPR Press, 2011), 137, as well as in the essays collected in (2010)
8(2) Perspectives on Politics 569-593; (2010) 143 Public Choice 263-352; (2011) 5(1) International
Journal of the Commons 1-85 and (2011) 39(1) Policy Studies Journal 1-183.

17
agencies, all settings are amenable to the same type of analysis along the lines suggested
by the IAD framework.31
According to Ostrom, the starting point should always be the action situation, that is
the specific interaction involving two or more individuals with diverse preferences who
act jointly to exchange goods and services, solve problems, dominate one another, or
fight. They can be buyers and sellers, legislators, users of common-pool resources and
so on.32 A common set of variables can be used to describe and analyze the action
situation:

1) the set of participants and their attributes;

2) the positions allowing participants to take specific actions;
3) the potential outcomes of the interaction;
4) the set of allowable actions;
5) the control an individual has on the outcomes;
6) the information available to participants;
7) the costs and benefits (serving as incentives and deterrents) assigned to actions
and outcomes.33

Figure 1 gives a graphical description of the working parts in the action situation
and their relationships. The main advantage of this set of variables is to provide the
researcher with a preliminary list of queries to answer before going on with a more
detailed analysis. From this point on, several paths can be followed. In her studies on
common-pool resources, Ostrom focused on the types of rules which operate as external
variables and affect each individual working part of the action situation. For example,
boundary rules specify how actors enter their positions, while information rules specify
channels of communication. The next step can be to use the empirical evidence on a
large number of real action situations to identify the broader institutional regularities, or

31
For an application of the IAD framework to intellectual property rights see M.J. Madison et al.,
‘Constructing Commons in the Cultural Environment’, (2010) 95 Cornell Law Review 657 and the
comments by E. Ostrom, ‘The Institutional Analysis and Development Framework and the Commons’,
ibid, 807.
32
See E. Ostrom, Understanding Institutional Diversity (Princeton University Press, 2005), 14f., 32. Also
see M.D. McGinnis, ‘An Introduction to IAD and the Language of the Ostrom Workshop: A Simple
Guide to a Complex Framework’, (2011) 39 Policy Studies Journal 169.
33
See Ostrom, Understanding, n 32 supra, 32-55.

18
design principles, associated with systems which survive for long periods of time. I will
come back to the latter aspect in subsection III B.

Figure 1. The Internal Structure of an Action Situation

Source: E. Ostrom, ‘Beyond Markets and States: Polycentric Governance of

Complex Economic Systems’, (2010) 100 American Economic Review 641, 648.

19
 The most recent developments of the IAD framework point to the many
linkages connecting the tiers of social-ecological systems (SESs). Some years ago,
Ostrom had already argued that each action situation is horizontally or vertically
connected to other action situations. One example of horizontal connection for
commercial activity is the linkage between the behaviour of actors in the market and
the availability of court proceedings for enforcement purposes. Vertical linkages
become relevant when the rules employed for daily decisions are modified. In this
case, it is possible to identify a level of collective-choice situations and two further
levels of constitutional and metaconstitutional situations.34
A more ambitious framework has been recently proposed. It includes a larger
set of variables and broaden the analysis to many other kinds of relationships
between the action situation and other tiers. The main idea is that the highest-tier
variables (depicted in Figure 2) can be further decomposed in second-tier and third-
tier variables. The goal is to provide researchers and policymakers with a better
understanding of how different combinations of microsituational and broader
contextual variables affect decisions made by individuals. This is the core of the
diagnostic approach.35
The shift from the IAD to the SES framework entailed many revisions. The
interaction among simultaneous action situations was explicitly worked out.36
Several instances of the highest-tier variables are allowed (for example, several
governance systems). The list of second- and third-tier variables is constantly
growing as empirical studies suggest new dimensions to explore. Finally, improved

34
See Ostrom, Understanding, n 32 supra, 55-64. There is an explicit acknowledgment of broad
similarities with the analysis of O. Williamson, ‘The New Institutional Economics: Taking Stock,
Looking Ahed’, (2000) 38 Journal of Economic Literature 593.
35
E. Ostrom, ‘A Diagnostic Approach for Going Beyond Panaceas’, (2007) 104(39) Proceedings of the
National Academy of Sciences USA 15181; E. Ostrom, ‘A General Framework for Analyzing
Sustainability of Social-Ecological Systems’, (2009) 325 Science 419; A.R. Poteete e al., Working
Together: Collective Action, the Commons, and Multiple Methods in Practice (Princeton UP, 2010), 234-
245.
36
According to M.D. McGinnis, ‘Networks of Adjacent Action Situations in Polycentric Governance’,
(2011) 39 Policy Studies Journal 51, 52, ‘(t)wo action situations are adjacent to each other when
outcomes generated in one action situation help determine the rules under which interactions occur within
the other action situation.’ For example, intervention by external authorities can shape the outcome of the
action situation even though none of the participants sought that intervention.

20
 definitions of different types of relationships among tiers and of the dynamic
character of SES systems are provided.37

Figure 2. Revised SES Framework with Multiple First-Tier Components

Source: M.D. McGinnis and E. Ostrom, ‘SES Framework: Initial Changes and
Continuing Challenges’, forthcoming in Special Issue of Ecology and Society, draft
version 10 July 2011, 20.

37
M.D. McGinnis, ‘Building a Program for Institutional Analysis of Social-Ecological Systems: A
Review of Revisions to the SES Framework’, working paper, 23 July 2010; M.D. McGinnis and E.
Ostrom, ‘SES Framework: Initial Changes and Continuing Challenges’, forthcoming in Special Issue of
Ecology and Society, draft version 10 July 2011.

21
 It is important to note that the multi-tier framework developed by Ostrom and
colleagues is strongly related to the idea of polycentric governance, another major
tenet in this literature. Explicitly introduced as an alternative to centralized
authority, polycentric governance assumes that decision-making authority is
dispersed among many different levels, with the most local ones given priority, at
least until patent failures of self-governance are documented. No clear jurisdictional
boundaries are assumed among levels. Each of them has some authority to develop
rules and address specific problems. Advantages are claimed to be the exploitation
of local knowledge, the building of trust-based relationships, better adapted rules,
lower enforcement costs, reduced probability of failure because of the establishment
of parallel and independent systems of rule making, interpretation and enforcement.
At the same time, highly decentralized systems display some limits: inertia or failure
of self-organizing efforts, local tyrannies and discrimination, stagnation, limited
access to scientific information by local groups, conflicts within a group, inability to
cope with large-scale resources.38
What value could the IAD and SES frameworks add to comparative legal
research ? Two broad lessons are worth considering. Firstly, those frameworks can
provide the starting point for designing a comparative study. More precisely, the
action situation lends itself to two different interpretations: a) it can be thought of as
the specific policy problem at issue; b) it can be used to describe the institutional
context in different legal systems. In the case sub a), the main working parts of the
action situation (to be identified with the help of non-legal literature) could be
connected to a comparative legal research which focuses on the Governance
Systems tier and tries to unpack its second- and third-tier variables. The most recent
list39 includes the following:

GS1 Rule-Making Organizations

- Government organizations
- Nongovernmental organizations

38
See Ostrom, Understanding, n 32 supra, 281-286; E. Ostrom, ‘Beyond Markets and States’, n 30 supra,
643f. .
39
Proposed by McGinnis and Ostrom, ‘SES Framework’, n 37 supra, 24-26.

22
 - Private organizations
- Community-based organizations
- Hybrid organizations
GS2 Informal procedures
GS3 Networks
GS4 Legal Systems
GS5 Rules in use
- Operational-choice rules
- Collective-choice rules
- Constitutional-choice rules
GS7 Policy Tools/Instruments

Of course, this is just an indicative list which can (and should) be further refined
with a detailed comparative study of the legal context. In the case sub b), the action
situation provides the legal researcher with a starting point to organize legal data. It
should make it easier to communicate them to both researchers from other
disciplines and policymakers. Hopefully, large-scale adoption of the framework
might lead to a reduction of the resources policymakers need to absorb and process
comparative legal information. In both cases, the main advantage is to bridge the
gap between the legal framing and the broader policy framing of a specific problem.
Secondly, both the IAD and SES frameworks leave comparative legal scholars
free to pursue any type of theoretical approach and to give priority to different
aspects of the institutional context. Depending on methodological premises, a
smaller or a larger number of variables could be included in the comparative study.
For example, those wishing to assess the impact of legal formants on the behaviour
of participants can provide separate measures for each of them.40 Similarly, other
factors affecting the legal decision-making process, like interpretation of
authoritative texts, structure of institutions, legal communities and their patterns of
thought, can be included in the analysis.41 The reference to a common framework is

40
See Sacco, ‘Legal Formants: A Dynamic Approach to Comparative Law’, (1991) 39 American Journal
of Comparative Law 1, 349.
41
On these aspects see Gerber, ‘System Dynamics’, n 11 supra, 728-733; D.J. Gerber, ‘Globalization and
Legal Knowledge: Implications for Comparative Law’, (2001) 75 Tulane Law Review 949, 959-963.

23
 only intended to ease the assessment of the strengths and weaknesses inherent to
each methodology, as well as their usefulness for policymaking purposes. In no way
it replaces the many strands of comparative legal methodology. For example, the
Ostrom’s frameworks do not provide any guide on the causal links among the parts
of the action situation. This is the realm of theories and models.42

B Young

Oran Young, currently at the University of California, Santa Barbara, was

probably the first author to explicitly delineate a diagnostic approach to institutional
problems. His proposals differ somewhat from Ostrom’s, but the overall direction is
the same. Young also proposed the diagnostic approach as an alternative to
Ostrom’s design principles. On this point, too, disagreement is more apparent than
real.
Working in the field of environmental governance, Young started from much
the same concerns that motivated the development of the IAD and SES
frameworks.43 The lack of a common structure was believed to hamper the growth
of cumulative knowledge about the institutional determinants of environmental
changes. The international project on the Institutional Dimensions of Global
Environmental Change (IDGEC) advanced a research agenda aimed at supplying the
conceptual tools that are needed to compare the operation of different institutional
arrangements. The basic science questions focused on issues of causality,
performance and design. The latter issue bears directly on the role of the diagnostic
approach.
In trying to devise ways to promote the dialogue between researchers and
policymakers, Young first critically assessed the design principles proposed by

42
According to Ostrom, ‘Beyond Markets and States’, n 30 supra, 646, a specific theory (e.g. game
theory or transaction cost theory) “is used … to specify which working parts of the framework are
considered useful to explain diverse outcomes and how they relate to one another ... Models make precise
assumptions about a limited number of variables in a theory that scholars use to examine the formal
consequences of these specific assumptions about the motivation of actors and the structure of the
situation they face.”
43
See O.R. Young, The Institutional Dimensions of Environmental Change (MIT Press, 2002), ch. 1 and
7.

24
 Ostrom for the successful management of common-pool resources.44 His conclusion
was that they do not match the complexity of environmental problems and should be
discarded (at least until more empirical evidence becomes available) in favour of
less ambitious, but potentially more useful, approaches to institutional design.
The main objection raised by Young was that the range of problem types which
can be observed in environmental matters is too heterogeneous to yield to
generalizations like the design principles. Moreover, the boundaries of each problem
type are themselves a contested issue, sometimes because of uncertainty on
biogeophysical mechanisms, sometimes because of disagreements on the impact of
socioeconomic causes. Both conditions (problem heterogeneity and ill-defined
boundaries) suggest that the design principles run the risk of producing adverse
consequences when applied outside the class of cases where their success has been
empirically tested.45
Of course, Young quickly added that the demise of the design principles cannot
lead one to accept the opposite conclusion that any environmental problem should
be treated as unique. The alternative he proposed was the intermediate approach
termed institutional diagnostics. Before describing its contents, let us see whether
Young’s objections were justified.
As Ostrom herself recounted many times, the design principles came out of her
attempts to identify regularities of behaviour common to self-organized systems
able to learn and adapt to many social, economic, and ecological disturbances over
time. The huge variety of specific rules adopted by each community made it
impossible to classify them. Moving up one analytical level, the design principles
identify the institutional conditions which lead to predictions of successful
management of a common-pool resources. But each principle is compatible with
many different specific rules. The main-trade off here is between an increase in
accuracy of prediction across a range of cases and a loss of meaningfulness because

44
The updated version of the design principles was presented by Ostrom, ‘Beyond Markets and States’, n
30 supra, 652f.: clear boundaries for users and resources, congruence of appropriation and provision rules
with local conditions, majority of users authorized to participate to rule-making, monitoring of the users
and the resources, graduated sanctions, conflict resolution mechanisms, minimal recognition of rights by
government, governance activities organized in multiple nested layers.
45
Young, The Institutional Dimensions, n 42 supra, 166-175.

25
 information about low-level diversity is lost.46 This is the reason why Ostrom
warned that the design principles could not be used by policymakers to build one-
size-fits all projects, but just “as a beginning point for conducting a broad search for
appropriate means of solving problems.” 47
But are the design principles incompatible with the diagnostic approach ? No,
provided that they are understood as congruent with the main goal of a diagnostic
approach, that is to decompose each problem in further subdivisions and try to
identify those common traits which can be matched with an effective governance
arrangement. Much the same subdivisions can be proposed for the design principles:
different types of monitoring, of conflict resolution mechanisms and of institutional
relationship among nested layers. Seen in this perspective, the design principles are
potentially complementary to the diagnostic approach.48
I now turn to the proposals for a diagnostic approach made by Young. He
suggested to identify elements of a problem which are relevant for solving it and to
associate each element to a recommendation on design features. In its latest version,
the same diagnostic approach is presented as a list of queries representing priority
issues.49 The queries are grouped under four headings:

Problems
- agreement of their basic character
- coordination or collaboration
- one-off solution or ongoing basis
- impact on preexisting institutional arrangements
- interaction of government agencies, private corporations and individuals
- cumulative or systemic
- nonlinear and irreversible changes

46
See M. Cox, ‘Balancing Accuracy and Meaning in Common Pool Resource Theory’, (2008) 13(2)
Ecology and Society 44 .
47
Ostrom, Understanding, n 32 supra, 271.
48
See M. Cox e al., ‘A Review of Design Principles for Community-based Natural Resource
Management’, (2010) 15(4) Ecology and Society 38; E. Ostrom and M. Cox, ‘Moving Beyond Panaceas:
A Multi-Tiered Diagnostic Approach for Social-Ecological Analysis’, (2010) 37(4) Environmental
Conservation 451.
49
See Young, The Institutional Dimensions, n 43 supra, 176-190; O.R. Young, ‘Building Regimes for
Socioecological Systems: Institutional Diagnostics’, in O.R. Young et al. (eds), Institutions and
Environmental Change (MIT Press, 2008), 119-134.

26
 Politics
- dispersed or concentrated power
- negotiating blocs or coalitions with clashing or diverging interests
- widely accepted discourses and well-known policy instruments
- gaps between ideal and actual institutional design (including corrupt
practices)
Players
- rational behaviour or other influences
- dynamics internal to actors
- dimension of the group
- degree of homogeneity
- public or hidden character of players’ actions
Practices
- legally binding or informal agreements
- openness of the regime to new members
- uniform or differentiated distribution of roles and responsibilities
- possibility to amend the initial agreement
- stand-alone or embedded governance system

The priorities identified by Young are clearly influenced by the global

environmental problems he has in mind. Other aspects could be relevant in different
institutional settings. But the general procedure to add new queries should always
follow the logic of disaggregating specific elements of the problem and finding their
design implications. Like in Ostrom’s framework, the most difficult issue is to manage
complex combinations of elements. From this point of view, the theme of horizontal and
vertical institutional interplay, developed by Young and other authors, displays many
analogies to Ostrom’s polycentric perspective. Here the main issue is to identify the
causal mechanisms leading one institution to influence another one.50
Two lessons for comparative legal research can be underlined. The first is that the
familiar debate about convergence and divergence of legal systems can be managed

50
See Young, The Institutional Dimensions, n 43 supra, ch. 4 and 5; T. Gehring and S. Oberthür,
‘Interplay: Exploring Institutional Interaction’, in Young et al., Institutions, n 49 supra, 187-223; S.
Oberthür and O.S. Stokke (eds), Managing Institutional Complexity (The MIT Press, 2011).

27
with transparent choices about the level of generality chosen for the analysis of each
legal topic. Claims of uniqueness of legal systems or legal concepts are pointless, but
unsound generalizations are no less dangerous. The second lesson is that the diagnostic
approach immunizes the researchers from common mistakes in legal and non-legal
comparative research: missing data, inappropriate models, unidentified interactions,
judgments relying on hidden beliefs and values.51

C Rodrik

Dani Rodrik and his colleagues at Harvard University have proposed a growth
diagnostics approach out of dissatisfaction with current theories on economic growth.
The latter are unable to explain why some countries grow and others not, why there are
different growth speeds, why we observe economic miracles and collapses in different
places at around the same time. The growth diagnostics approach starts from a critique
of the Washington Consensus, that is the wide-ranging program of economic and
institutional reforms proposed (or imposed) by international donor organizations to less
developed countries in the nineties. The main fallacy of the Washington Consensus was
the lack of correspondence between the higher-order principles of neoclassical
economics and specific policy recommendations. The protection of property rights,
trade liberalization, privatization and deregulation can all be accomplished with a large
variety of institutional packages. Indeed, the economic growth of China and other Asian
countries is directly linked to institutional reforms which achieved results compatible
with those principles. However, the specific solutions adopted in each country were
very different from those recommended by international organizations.52
To explain why universal economic principles do not map onto unique institutional
packages, Rodrik argues that local conditions will determine the success or failure of
reforms. Economic stagnation is usually the product of many causes, but they are not
51
See Young, The Institutional Dimensions, n 43 supra, 187-189. Likewise, the diagnostic approach is
described as an antidote to mistakes made by busy policymakers who “all too often end up adopting
policies borrowed from other countries and contexts without adapting them to the situation at hand, much
less coming up with innovative solutions” (H. Schroeder et al., ‘Contributing to the Science-Policy
Interface: Policy Relevance of Findings on the Institutional Dimensions of Global Environmental
Change’, in Young et al., Institutions, n 49 supra, 266).
52
See D. Rodrik, One Economics Many Recipes: Globalization, Institutions, and Economic Growth
(Princeton University Press, 2007), 16-35. See also N. Serra and J.E. Stiglitz (eds), The Washington
Consensus Reconsidered: Towards a New Global Governance (Oxford University Press, 2008).

28
equally important in every country. Likewise, different countries can exhibit variation in
administrative competence or political constraints. Most of the times, information on
both counts will be limited. A complete list of distortions affecting growth is difficult to
come out. Additionally, there are interaction effects among sectors of the economy.
Attempts to correct some distortions may well produce welfare losses elsewhere. These
second-best complications can also be detected in the field of institutional reform. For
example, one recommendation usually made to boost commercial activities in less
developed countries is the introduction of a strong judiciary with the power to enforce
contractual obligations. However, one puzzling observation is that some countries (e.g.
Vietnam) are able to grow even though they rely almost entirely on relational
contracting, while in other countries with worse economic performances (e.g. in African
regions) the alternative of relational contracting does not represent a valid substitute for
a strong judiciary.53
Building on the observation that the broad variety of institutional solutions is the
rule for growth strategies, Rodrik and his colleagues propose a diagnostic approach in
three steps:

1) identify the most binding constraint on growth for a specific country;

2) try to remove that constraint with a policy measure as close as possible to
the cause of the distortion;
3) try to devise institutions which can sustain growth over the long run.

As far as the first step is concerned, it clearly avoids the major pitfall of the
Washington Consensus approach, that is the attempt to direct reforms to all possible
targets. The growth diagnostics approach tries instead to find out those areas where
reforms will yield the greatest return. To this end, diagnostic signals are sought for to
identify the most important binding constraints in each economy. Sometimes co-
variation of related variables shows which problems should be given priority. In other
cases, the attempts of the private sector to escape from binding constraints provide
evidence about their negative impact. In comparing different countries, the type of

53
See D. Rodrik, ‘Second-Best Institutions’, (2008) 98(2) American Economic Review 100.

29
economic agents thriving or doing poorly in different sectors can help to establish the
intensity of the constraint.
Figure 3 gives an example of a decision tree which can be used to describe the steps
of the diagnostic approach. The signals are used to choose the path to follow and to
exclude other constraints. Of course, the reasons why a specific problem is thought to
affect growth should be included in a logically consistent causal chain. Common causal
stories refer to state failures, disruptions to the export sector or barriers to entry.54
Going from diagnostic to therapeutics is no easy task. For the second and third steps
Rodrik and his colleagues offer no more than a few general suggestions. This means
that the main strength of the growth diagnostics approach lies in its ability to identify
priorities. So far, it falls short of providing guidance about specific policy solutions.55
Two important lessons for comparative legal research are: a) the attention that the
growth diagnostics approach pays to second-best interactions among institutions; b) the
different strength of binding constraints. As to the lesson sub a), no reform is devoid of
impacts on contiguous sectors. A major task for every comparatist willing to produce
policy-relevant research is to learn how to spot the adverse consequences of a proposed
legal change. With regard to the lesson sub b), comparative legal research should try to
avoid all-encompassing descriptions of an institutional context which do not provide
any clues on the weight of its constitutive elements. As suggested by growth
diagnostics, finding out which constraints represent the most decisive hurdles to a legal
reform provides a starting point for more focused attempts at overcoming them. Of
course, this lesson implies that comparative law shall develop criteria to measure the
strength of different types of constraints.

54
Rodrik, One Economics, n 52 supra, 56-95; D. Rodrik, ‘Diagnostics Before Prescription’, (Summer
2010) 24 (3) Journal of Economic Perspectives 33; R. Hausman et al., ‘Doing Growth Diagnostics in
Practice: A “Mindbook”’, Center for International Development, Harvard University, Working Paper no.
177, September 2008, 22.
55
Pilot studies of the growth diagnostics approach have been undertaken for a number of countries at the
World Bank: see D. Leipziger and R. Zagha, ‘Getting Out of the Rut: Applying Growth Diagnostics at the
World Bank’, (2006) 43 (1) Finance and Development. However, both at the World Bank and the IMF it
seems that organizational rigidities hamper a large-scale shift to the new approach: see P. Abbott et al.,
‘IMF and Economic Reform in Developing Countries’, (2010) 50 Quarterly Review of Economics and
Finance 17. For some criticisms see J. Felipe and N. Usui, ‘Rethinking the Growth Diagnostics
Approach: Questions from the Practitioners’, Asian Development Bank, Economics Working Paper
Series, No. 132, November 2008.

30
 Figure 3. A Growth Diagnostics decision tree.

Source: R. Hausman et al., ‘Doing Growth Diagnostics in Practice: A

“Mindbook”’, Center for International Development, Harvard University, Working
Paper no. 177, September 2008, 22.

31
 IV Comparative legal diagnostics for European contract law

The previous section shows that a diagnostic approach helps identify the main
components of a specific policy problem and explain their interactions. Comparative
law can draw on these insights and try to increase its relevance for policymakers by
showing: a) patterns of interaction among the different parts of the governance system;
b) how the legal factors are connected to other non-legal aspects of the same policy
problem. Of course, much work is still needed to fully understand how to exploit the
advantages of a diagnostic approach. In this section, I will limit myself to briefly
discuss a concrete application of the diagnostic approach to a much-debated topic of
comparative legal research: the EU initiatives for European contract law. The aim is to
provide initial suggestions on the benefits of such an approach and the methodological
issues to be confronted. Subsection A describes the debate surrounding the
Commission’s proposal for an optional instrument and the role played by European
comparative lawyers. Subsection B explains how the diagnostic approach can help find
out some important causal relationships among the different parts of the governance
system for cross-border trade.

A The proposal for an optional instrument on European contract law

For a number of reasons, European contract law represents a useful test bed for the
diagnostic approach. At the onset of the second decade of twenty-first century, the
European Commission proposed a regulation for an optional instrument on a Common
European Sales Law (CESL).56 The ground for such a proposal was prepared by the
publication of several different collections of rules in the last decade.57 There seems to
be good chances that EU institutions will eventually agree on enacting the optional
56
See European Commission, ‘Proposal for a regulation of the European Parliament and the Council on a
Common European Sales Law’, COM (2011) 635 fin. of 11 October 2011.
57
The milestones have been O. Lando and H. Beale (eds), Principles of European Contract Law, Parts I
and II (Kluwer, 2000) (PECL); O. Lando et al (eds), Principles of European Contract Law, Part III
(Kluwer, 2003); C. von Bar et al (eds), Principles, Definitions, and Model Rules of European Private
Law, Draft Common Frame of Reference (Sellier, 2009) (DCFR). The proposed CESL regulation draws
on a Feasibility Study, drafted by an Expert Group in consultation with a Group of Key Stakeholder
Experts and published in May 2011 (text available on the website of the Commission, Directorate General
Justice). The Feasibility Study draws in turn on the PECL, the DCFR, as well as the 1980 UN Convention
on the International Sale of Moveable Goods and the Unidroit Principles of International Commercial
Contracts (3rd edition 2010).

32
instrument.58 For the purposes of this paper, the most interesting aspect is how
comparative law shapes the wider debate on the future of European contract law.
To begin with, which factors influence the framing of the policy problem meant to
be solved by the CESL ? The decision to carry forward the project is explicitly
connected to the broader strategies on the completion of the Single Market and the
recovery of European economies after the financial crisis. The CESL is but one of a
much larger set of initiatives.59 Hence, the market integration frame was exploited to put
high onto the EU agenda the issue of contract law unification.
This observation explains why the Commission strives to supply evidence about the
hurdles to cross-border trade which can be traced back to differences in national
contract rules. Many academics, business organizations and Member States disagree and
argue that other causes are hindering a deeper integration.60 So far, these criticisms, as
well as those disputing the instrumental use of contract law, do not seem powerful
enough to displace the market integration frame. Like it or not, it is the latter’s strength,
and not the specific merits of contract law unification, which drives the choices about
the construction of the policy problem and the selective use of scientific evidence.
A second point worth noting is that the wide involvement of European comparative
lawyers in this debate lends support to the claim advanced at the beginning of this
paper: they play a crucial role in those phases of the policymaking process concerned

58
The European Parliament endorsed the idea of setting up an optional instrument by means of a
regulation: see European Parliament, ‘Policy Options for Progress Towards a European Contract Law for
Consumers and Businesses’, res. P7_TA-PROV(2011)0262, 8 June 2011.
59
References to European contract law can be found in the Commission’s communications on ‘Europe
2020’ (COM (2010) 2020 fin. of 3 March 2010, 19), on ‘A Digital Agenda for Europe’ (COM (2010) 245
fin./2 of 26 August 2010, 13), on ‘Review of the Small Business Act for Europe’ (COM (2011) 78 fin. of
28 February 2011, 13), and on the ‘Single Market Act’ (COM (2011) 206 fin. of 13 April 2011, 14, 19).
Of course, the debate on the optional instrument is also influenced by the parallel legislative process
which led to the approval of the new consumer rights directive (CRD) 2011/83/EU of 25 October 2011.
60
For a sample of contributions to the consultation on Commission’s Green Paper COM (2010) 348 fin.
of 1st July 2010, see Association Henri Capitant (lack of a serious study on the economic opportunity of
the project), Businesseurope (for B2B contracts legal fragmentation does not seem to be causing any
significant obstacle to cross-border trade), eurocommerce (other factors rated much higher as an obstacle
to cross-border online trade than contract law), UEAPME (the different contract law regimes of the
Member States cannot be considered as a major obstacle in respect of the cross-border activities of
enterprises), ICC (the differences between contract laws in different countries do not constitute a
significant obstacle to cross-border trade between businesses), ISDA (for cross-border financial
transactions more urgent EU action in other areas than contract law), Orgalime (Companies within the
engineering industries do not experience serious problems in cross-border business resulting from
differences in the national contract law systems), UK government (no convincing evidence of a
significant problem stemming from the current divergence in national contract law). All the contributions,
as well as the outcomes of the later consultation on the Feasibility Study, are available on the website of
the Commission, Directorate General Justice.

33
with drafting tasks, but do not seem able to supply the type of knowledge which can
influence the other phases. Of course, this observation is not meant to deny that
European comparative lawyers have often produced high-quality contributions. The
main problem is the overall direction of the debate. It has been too much focused on the
internal point of view of the legal sciences (the content of contract rules and the
systematic impact of European unification projects on national private law), but it has
provided much less information about the external links with other aspects of the policy
problem.61 Neglecting this side of the inquiry has had many unfortunate consequences.
The most important one is that, even though comparative lawyers may dispute the
connection between the increase of cross-border trade and the suppression of divergent
national contract rules, the evidence they supply does not have many chances to be
utilized, at least until such evidence can be employed to tackle the specific problems
policymakers are concerned with.
Consider, for example, the way the different policy options for European contract
law were framed by the Commission in the impact assessment (IA) for the CESL
proposal.62 The general objectives are to facilitate the expansion of cross-border trade
and cross-border purchases by consumers in the internal market. The operational
objectives are to reduce additional transaction costs and legal complexity in cross-
border trade, as well as to ensure a high level of consumer protection and reduce
uncertainty about consumer rights in cross-border shopping. The IA estimates the
opportunity costs of failed intra-EU trade depending on contract law differences at a
range between €26 and €184 billion. Moreover, a conservative estimate of overall
transaction costs due to the fragmentation of national contract law for currently
exporting companies in B2B and B2C is in the range of €6-13 billion. Consumers, too,
are said to suffer from fragmentation in terms of higher domestic prices (savings from
on line purchases estimated at €380 million) and refusals to sell from other EU
countries (value of failed transactions estimated at €157 million).
61
A striking example of this problem is the disconnect between the content of European contract law and
the broader economic and regulatory contexts in which contractual relationships are embedded. See H.-
W. Micklitz, ‘The Visible Hand of European Regulatory Private Law – The Transformation of European
Private Law from Autonomy to Functionalism in Competition and Regulation’, (2009) 28 Yearbook
European Law 3; H.-W. Micklitz and F. Cafaggi, ‘Introduction’, in Micklitz and Cafaggi, European
Private Law, n 8 supra, viii-xlvi; G. Bellantuono, ‘The Limits of Contract Law in the Regulatory State’,
(2010) 6 European Journal of Contract Law 115-142.
62
The Commission Staff Working Paper containing the impact assessment is available on the website of
Directorate General Justice.

34
 The impact of the seven options analyzed in the IA, as well as the content of the
specific rules to be included in the optional instrument, are assessed from the point of
view of the general and operational objectives. This means that there is no room left for
other aspects, for example systematic coherence, cultural specificities and social justice.
Stakeholders who believe those aspects should be given precedence will find the choice
of the optional instrument unacceptable. But in a cost-reduction frame the advantages of
the optional instrument can be easily shown. According to the IA, new exporters
adopting the CESL would save annual transaction costs of €150-400 million, while
savings for current exporters would be between €3.7 and €4.3 billion. Overall EU GDP
is expected to increase by €5-10 billion, while over the next ten years the benefits would
be in a range between €32 and €149 billion. If 25% of EU companies used the CESL,
consumer prices could decrease around 0.04-0.07%, with an increase of consumer
welfare by €4.5 billion. Moreover, 159.300-315.900 new jobs would be created.
Conversely, the benefits of waiting for the accumulation of further scientific evidence or
of adopting softer forms of harmonization are speculative at best.63
The argument here is not that assumptions underlying the IA cannot be contested, or
that other aspects or different options are not relevant. The problem is that alternative
proposals should discuss the cost-reduction frame on its own ground and suggest
different ways to frame the policy problems, or different answers to the same problems.

B Reframing European contract law

Can comparative legal diagnostics help reframe this debate? As suggested above, its
main advantage lies in providing a general framework to analyze the role of many legal
and non-legal factors and their interactions. In the case of European contract law, a
diagnostic approach would entail several steps:
1) the focal action situation should be identified;

63
On the need for further discussion see, e.g., R. Zimmermann, ‘The Present State of European Private
Law’, (2009) 57(2) American Journal of Comparative Law 479; K. Riesenhuber, ‘A Competitive
Approach to EU Contract Law’, (2011) 7 European Review of Contract Law 115. For examples of softer
forms of harmonization see, e.g., Association Henri Capitant, n 60 supra, 11-13 (optional model contract
clauses); A.G. Castermans, ‘Towards A European Contract Law Through Social Dialogue’, (2011) 7
European Review of Contract Law 360 (European self regulatory consultation system, providing a
framework for drafting model contracts tailored to individual sectors).

35
 2) following the SES framework, the highest-tier variables and their
linkages should be described (Figure 4);
3) then the inquiry could be focused on the governance tier, with the aim to
explain the horizontal and vertical linkages among action situations (Figure 5).

Consider step 1). According to the Commission’s market integration frame, the
focal action situation is the cross-border interaction in B2B or B2C contracts for goods
and services, both in traditional and online commerce. To increase the usefulness of the
diagnostic approach, a more specific contractual relationship should be considered. For
example, the nature of goods and services exchanged (whether movable or immovable,
physical or digital) could be taken into account. This recommendation is intended to
avoid the one-size-fits-all fallacy. Also note that at this stage of the analysis the
Commission’s frame is accepted without further inquiry, but nothing prevents the
researcher from considering other aspects, e.g. social justice concerns in contractual
relationships involving services of general interest like electricity or housing.64
Turning now to step 2), the surrounding economic, technological and social context
will affect the number and positions of the actors involved, as well as the type of
resource systems (production and supply chains) and resource units. For each tier, many
different manifestations can go on simultaneously. For example, buyers and sellers can
interact within their contractual relationship or with internet service providers. In the
resource systems tier, supply chains and inter-firm networks represent one action
situation, but they are also connected with the infrastructures providing payment and
logistic services across the Single Market. In the governance systems tier, there will be
the horizontal linkages between the countries of origin of the buyers and sellers, as well
as vertical linkages between the EU and Member States levels.

64
See generally B. Lurger, ‘Old and New Insights for the Protection of Consumers in European Private
Law in the Wake of the Global Economic Crisis, in Brownsword et al, n 19 supra, 89, 109-111 (long-
term contracts for satisfaction of basic needs).

36
 Figure 4. Diagnostic framework for EU cross-border trade.

Source: adapted from M.D. McGinnis and E. Ostrom, ‘SES Framework: Initial
Changes and Continuing Challenges’, forthcoming in Special Issue of Ecology and
Society, draft version 10 July 2011, 20.

37
 Finally, let us discuss step 3). Figure 5 is a simplified picture of the action situation
(a prototypical cross-border contractual relationship) and of the impact of different
categories of rules on each component. Following Ostrom, the rules are classified
according to the way they influence action.65 Alternative classifications are possible, but
they should fulfil the condition of helping the policymaker to see more clearly the
various parts of the governance system and their patterns of interaction.
For each category of rules, I provide examples of specific EU or national measures.
In some cases, the same rules can have an impact on different parts of the action
situation. Hence:
a) boundary rules define entry and exit in a resource management system or
market setting. Examples are authorization requirements or restrictions imposed
at national level for cross-border provision of services, to be kept within the
limits laid down by directive 2006/123/EC, or EU competition rules about
vertical restraints, which avoid foreclosure of distribution channels.66
b) Position rules define the number of participants to the action situation
and the actions they are entitled to take. In the case of cross-border trade, the
market structure is the major determinant of the position and number of actors.
Such structure is in turn shaped by competition law and sector-specific
regulation. The extent of cross-border trade is also affected by the regulation of
payment services and logistic services.67
c) Choice rules specify what each actor must, must not, or may do in a
decision process. This is the place where private law plays a crucial role.

65
See Ostrom, Understanding, n 32 supra, 186-215.
66
For services see, most recently, the Commission’s Communication COM (2011) 20 fin. of 27 January
2011, which proposes further actions to strengthen the Single Market, and the accompanying staff
document SEC (2011) 102 fin., which presents the results of the Mutual Evaluation Process for directive
2006/123/EC. With regard to EU competition law, Commission regulation (EU) No 330/2010 of 20 April
2010 on vertical agreements and the accompanying guidelines of 19 May 2010 dismantled some barriers
to online distribution. Dealers are in principle free to sell online, even though the suppliers are still
entitled to maintain some degree of control on internet sales. See the comments by N. Petit and D. Henry,
‘Vertical Restraints Under EU Competition Law: Conceptual Foundations and Practical Framework’,
working paper 13 December 2010, available at www.ssrn.com (last visited February 6, 2012); R. Subiotto
and C. Dautricourt, ‘The Reform of European Distribution Law’, (2011) 34 World Competition 11.
67
For both categories of services, lack of harmonization and inadequate implementation of EU directives
are mentioned by the Commission (COM (2009) 557 fin. of 22 October 2009, 13) among the causes of
the fragmentation of the Single Market for electronic commerce. See also the ‘Retail Market Monitoring
Report’, COM (2010) 355 fin. of 5 July 2010 and the accompanying staff document SEC (2010) 807.

38
 Contract rules at EU and national level are highly relevant. Of course,
intersections with other branches, like tort law or intellectual property law, also
belong to the category of choice rules. A huge comparative law literature is
available on these topics. The debate on the optional instrument is clearly
relevant here. The diagnostic approach should help see more clearly how its
introduction will affect other parts of the governance system and what its role
will be in the overall framework.68
d) Aggregation rules establish who decides in group action situation, where
no single participant has full control. In the case of cross-border trade, self-
regulation by business organizations is the most relevant example. I also include
in this category participatory rights in regulatory or legislative proceedings, in so
far as they allow the stakeholders to transmit information to rule-makers and
influence the final decision.
e) Information rules open channels of communications among the actors.
Information duties in consumer law, prohibitions of unfair and misleading
commercial practices and data protection rules are primary examples: they affect
the extent, depth, frequency, accuracy and subject of communication.
f) Payoff rules assign rewards or sanctions to specific actions or outcomes.
Prices are generally dependent on market processes, but in many cases European
and national regulation bear directly on the payoff schedule (e.g. for services of
general interest, professional services, labour wages or CEOs’ salaries).
g) Scope rules define the range of outcomes that can be affected by the
actions of the participants. Several examples fit in this category. Other groups in
different markets or governance systems could affect the outcome of a specific
cross-border trade. More generally, international, European and national
regulation will often define the range of admissible outcomes (e.g. from the
point of view of mandatory product standards). Other examples in this category
are dispute resolution and enforcement mechanisms. Although they clearly
overlap with the category of choice rules, they also work in the background to

68
Ostrom, Understanding, n 32 supra, 201, argues that ‘(c)hoice rules empower, but the power so created
can be distributed in a relatively equal manner or a grossly unequal manner.’ This observation suggests
that a diagnostic approach is compatible with comparative analyses of cross-border trade which explore
issues of social justice.

39
 support private autonomy and, at the same time, to shape its boundaries. From
this point of view, they can be said to specify the width of the outcome space for
cross-border trade.

Figure 5. Impact of governance systems on the action situation.

Source: adapted from E. Ostrom, Understanding Institutional Diversity

(Princeton University Press, 2005), 189.

40
 It is easy to see that most examples for each category of rules are drawn from areas
where EU initiatives have been one of the most important driving forces. So what value
is added by a diagnostic approach ? Two issues deserve a more sustained attention:
a) the interaction among the parts of the action situation;
b) the strength of the barriers to cross-border trade.
The interaction among the parts of the action situation is more important than the
specific content of each part. It is the combination of variables that matters. In the
context of the debate on the optional instrument, this means that the content of contract
rules should be discussed together with the many causal links connecting those rules to
the other parts of the governance system. It will not be necessary to explore all
connections for every policy problem. But providing empirical evidence about the
nature of the most relevant links is a major task of comparative law. Most importantly,
it helps explain why some combinations of variables lead to successful EU initiatives,
while other combinations lead to failure.69 Comparative legal research which is able to
shed light on those aspects could become a crucial input to the European policy process.
Consider, for instance, the assessment of CESL rules on remedies for non-
conforming goods, provided for in the IA. In B2C contracts, remedies (specific
performance, repair, replacement, withholding, termination, price reduction and
damages) can be freely chosen by the consumer without any hierarchical order,
damages are explicitly regulated, termination is possible even when non-performance is
not fundamental, sellers are not given a right to cure defects, rules on duties of prompt
examination and notification do not apply. The IA claims that these new rules would
raise the level of consumer protection and enhance the confidence of European
consumers in cross-border trade. One possible drawback would be the increase of
prices, due to the additional costs European businesses will have to bear for refunds.70

69
The Commission is planning to undertake a “performance check” in the Single Market for services
(COM (2011) 20, n 66 supra, 9). The aim is to assess how different pieces of EU law work on the ground
from the point of view of users (e.g. SMEs or consumers). A set of practical scenarios in specific sectors
where businesses and citizens most often confront a poor functioning of the Single Market will be
defined. Issues of a horizontal nature, crossing several sectors, will be identified. This is the type of
evaluation which can be undertaken with the diagnostic approach advocated in this paper.
70
See art. 106 proposed CESL and IA, n 62 supra, 176f. Directive 1999/44/EC on the sale of consumer
goods and associated guarantees gave consumers a more restricted choice of remedies and left some
aspects (e.g. damages) to national law: see generally H. Schulte-Nölke et al (eds), EC Consumer Law
Compendium (Sellier, 2008), 426ff..

41
 The impact of rules on remedies is described with reference to the position of the
parties involved in the bilateral transaction. In terms of the diagnostic approach, this
means that only the impact of choice rules is accounted for. However, the final outcome
will also depend on other parts of the governance system. Granting broader remedies
will be pointless if effective redress mechanisms (scope rules in the diagnostic
framework) will not be available.71 Likewise, consumers’ ability to choose goods,
services and contract terms depends on the availability of information channels. It is
still unclear to what extent existing European rules on unfair commercial practices, e-
commerce and management of personal data (information rules in the diagnostic
framework) help consumers to avoid the most common cognitive mistakes.72
Of course, the Commission itself acknowledges that the CESL will not dismantle all
the barriers to cross-border trade. But the argument here is that, without an assessment
of those linkages, the impact on online trade of specific CESL rules cannot be
measured. Broader remedies for consumers may or may not increase trust and foster
cross-border trade. Only a thorough assessment of their relationships with other groups
of rules will tell how effective they are. Moreover, such assessment may suggest a
change in the content of the rules. For example, according to the proposed CESL, the
choices available to the consumer cannot be restricted. But what if it can be shown that
self-regulation (aggregation rules in the diagnostic framework) is effective in reducing

71
See in this respect the Commission’s communication on alternative dispute resolution for consumer
disputes in the Single Market, COM (2011) 791 of 29 November 2011, accompanying a proposal for a
directive on consumer ADR (COM (2011) 793) and a proposal for a regulation on consumer ODR (COM
(2011) 794).
72
For discussion of consumers’ choices in the context of EU rules in light of psychological studies see,
e.g., P. Muller et al, Consumer Behaviour in a Digital Environment, study for the European Parliament,
Committee on Internal Market and Consumer Protection, August 2011, 37-40. For evidence on unfair
commercial practices see S. Augenhofer et al, Misleading Advertising on the Internet, study for the
European Parliament, Committee on Internal Market and Consumer Protection, July 2010. The
Commission Staff Working Paper, Bringing e-Commerce Benefits to Consumers, SEC (2011) 1640, 22-
25, shows that in many cases price comparison websites do not offer complete and accurate information.

42
 73
complaints about quality ? Would mandatory rules still be justified or should more
room be left to private autonomy ? 74
What this example shows is that the diagnostic approach pushes policymakers to
change the way they frame the problem: the focus is not the bilateral relationship
between the parties, but the broader decision-making context in which both consumers
and businesses are embedded.
A diagnostic approach should also provide criteria to assess the strength of barriers
to be overcome. As argued by Rodrik, diagnostic signals must be exploited to identify
the most binding constraints and tackle them with effective measures. Too often EU
policies overlook this lesson and try to implement broad reforms unlikely to hit the
crucial targets. Unfortunately, the methodology needed to exploit diagnostic signals for
institutional change is still underdeveloped. However, useful data could be drawn from
the same comparative research which is aimed at finding out interactions within
governance systems. Consider this question: is the development of online cross-border
trade more deeply affected by differences in national contract rules or by differences in
liability rules for internet intermediaries ? According to the Commission, the CESL will
boost cross-border trade. But it can be argued that, without internet intermediaries
willing to offer innovative services, such an outcome will be unattainable.
Diagnostic signals which help assess the weight of the two constraints (fragmented
national rules and liability rules for intermediaries) could be provided by a comparative
assessment of : 1) differences in the US and EU rules for internet intermediaries’
liability; 2) differences in the US and EU rules for online consumer protection; 3)
impact that differences in the former two areas have on business models of internet

73
For an optimistic view about digital seals and certification schemes as an alternative to protection of
internet users by legal rules see, e.g., G.K. Hadfield, ‘Delivering Legality on the Internet: Developing
Principles for the Private Provision of Commercial Law’, (2004) 6 American Law and Economics Review
154. EU-wide trustmarks and codes of conduct are still underdeveloped: see the EU Study on the Legal
Analysis of a Single Market for the Information Society, November 2009, chapter 13, available on the
website of the Commission, DG Information Society and Media. Online reputation systems are another
self-regulatory tool, but they also entail risks to users: see ENISA, Report on Trust and Reputation
Models: Evaluation and Guidelines, December 19, 2011.
74
Criticisms about the mandatory nature of rules on remedies for consumer sales are advanced by H.
Eidenmüller et al, ‘Towards a Revision of the Consumer Acquis’, (2011) 48 Common Market Law Review
1077, 1088-1090. However, such criticisms only refer to the imposition of a specific risk allocation that
may not reflect parties’ preferences. The weakness of this argument is that it does not explain whether
consumers can be protected in other ways without totally excluding their autonomy. In trying to finding
out connections among the different parts of the governance system, the diagnostic approach aims at
answering just this question.

43
intermediaries; 4) agreements between intellectual property owners and internet
intermediaries which try to avoid litigation and uncertainty stemming from the
applicable rules.
As far as the rules for internet intermediaries’ liability are concerned, neither the US
nor the EU have so far succeeded in designing safe harbours with clear boundaries. On
both sides of the Atlantic, case law is still trying to clarify how the balance should be
struck between the interest of rightholders to curb online infringements, the interest of
intermediaries to avoid onerous monitoring duties, and the interest of users to avoid
75
limitations on legal online behaviour. This situation makes it difficult to measure
differences with any accuracy. The fact that European websites of internet
intermediaries offer a range of services more limited than their American versions
suggests that rules on liability may be more stringent (or more uncertain) in some EU
member states.76 However, tougher liability rules do not automatically spur e-
commerce. It can be observed that US firms dominate e-commerce in several markets.
Moreover, trust in e-commerce seems higher in the US, notwithstanding a lower level of
online consumer protection.77 Finally, agreements between rightholders and internet

75
In the EU, some interpretive issues have been clarified by the European Court of Justice, but national
judges have been left with the task of defining the boundaries of internet intermediaries’ liability. The
outcome is a great variety of approaches, sometimes more favourable to the rightholders and sometimes
to the intermediaries: see P. Van Eecke, ‘Online Service Providers and Liability: A Plea for a Balanced
Approach’, (2011) 48 Common Market Law Review 1455. The Commission announced its intention to
intervene on this issue with a horizontal European framework for notice and action procedures (see the
communication ‘A Coherent Framework for Building Trust in the Digital Single Market for e-Commerce
and online services’, COM (2011) 942) and with the revision of the IPR Enforcement Directive
2004/48/EC (see the communication ‘A Single Market for Intellectual Property Rights’, COM (2011) 287
fin. of 24 May 2011). In the US, federal judges are generally reluctant to impose liability on
intermediaries whose business model does not thrives on infringements of intellectual property rights: see
S.L. Dogan, ‘”We Know It When We See It”: Intermediary Trademark Liability and the Internet’, 2011
Stanford Technology Law Review 7. But there seems to be no bright line rules to distinguish good faith
intermediaries from bad faith ones.
76
For the observation that the French eBay website offers much less advertising and assistance to sales
than other eBay websites to avoid losing the exemption granted to host providers by art. 14 directive
2000/21/EC see K.M. Saunders and G. Berger-Walliser, ‘The Liability of Online Markets for Counterfeit
Goods: A Comparative Analysis of Secondary Trademark Infringement in the United States and Europe’,
forthcoming (2012) Northwestern Journal of International and Business Law, available at www.ssrn.com
(last visited February 6, 2012).
77
See B. Deffains and J.K. Winn, ‘Governance of Electronic Commerce in Consumer and Business
Markets’, in E. Brousseau et al. (eds), Governance, Regulations and Powers on the Internet (Cambridge
University Press, forthcoming 2012), available at www.ssrn.com (last visited February 6, 2012), who
observe (p. 7) that unconditional money-back guarantees offered by some US internet firms provide an
even higher level of protection than EU consumer law. For important differences between the rules
adopted in the American Law Institute’s Principles of the Law of Software Contracts, 2009 and EU
consumer law see H. Travis, ‘The Principles of the Law of Software Contracts: At Odds with Copyright,
Consumer, and European Law ?’, (2010) 84 Tulane Law Review 1557; M.L. Rustad and M.V. Onufrio,

44
intermediaries have been concluded both in the EU and the US.78 They suggest that the
parties involved are trying to overcome the inefficiencies of the current legal
framework. However, the European agreements were concluded much later, include a
limited number of parties so far and do not go much further than already existing legal
duties for intermediaries and rightholders. It is possible that US private ordering
solutions have been more effective in achieving a balance among competing interests.
Taken together, these clues do not provide evidence for or against the proposed
CESL, nor do they allow to advance any conclusion about the right level of online
consumer protection or the best regime for internet intermediaries. Still, it would be
hard to argue that online cross-border trade can be fostered without a satisfactory
distribution of liability along the digital chain. The US-EU comparison seems to suggest
that private solutions can be readily found for the problems raised by consumer
protection. The same is not true for the liability of internet intermediaries, as shown by
the need to adapt business models to different regimes. But the Commission reversed
the order of priority, intervening first to reduce fragmentation in contract rules and
delaying initiatives on the fragmentation of liability rules for internet intermediaries.
Hence, what the diagnostic approach shows is that any attempt to address each of the
above mentioned aspects separately will be deeply mistaken. The Commission is guilty
of just this mistake when it merely lists the different aspects of the regulatory
framework for e-commerce, without providing any indications as to their relative
weight, their priority or their interactions.79

V Conclusions: is comparative legal diagnostics possible ?

Comparative law need not be policy-oriented. But a good deal of it should. Benefits
could accrue both on the external side (the relationship with other social scientists and

‘The Exportability of the Principles of Software: Lost in Translation ?’, (2010) 2 Hastings Science and
Technology Law Journal 25.
78
For the EU see the Memorandum of Understanding signed in Brussels on May 4, 2011, available on the
website of the Commission, Direction General Internal Market. For the US see the 2007 User Generated
Content Principles, available at www.ugcprinciples.com (last visited February 6, 2012), critically
discussed by L. Helman and G. Parchomovsky, ‘The Best Available Technology Standard’, (2011) 111
Columbia Law Review 1194, 1209-1211, as well as the many quasi-secret agreements between
rightholders and internet service providers discussed in A. Bridy, ‘Graduated Response and the Turn to
Private Ordering in Online Copyright Enforcement’, (2010) 89 Oregon Law Review 81.
79
See, e.g., the Commission’s staff working document SEC (2011) 1641, 52ff., for a list of regulatory
obstacles affecting the flow of a normal retail transaction.

45
policymakers) and on the internal side (methodological debates among comparative
legal scholars). The type of knowledge required by policymakers includes a description
of the institutional context, the analysis of the interactions among its components, and
an evaluation of their impact on actors’ behaviour. Many comparative legal studies
already produce this type of knowledge. A diagnostic approach helps organize all these
aspects and communicate the relevant comparative knowledge to policymakers. In the
last years, many strands of social sciences literature have tried to develop such an
approach. At least partially, those contributions can be applied to comparative legal
analysis. Of course, some classifications and concepts are tightly connected to the sector
where they were first conceived of and reflect the concerns the researchers had in mind.
But the discussion proposed in the previous sections shows that there is much common
ground.
To be sure, big methodological divides on how the relevant context is defined and
what kind of causal mechanisms are at work will not be overcome in the near future.
Sociological, critical, cultural, anthropological and economic perspectives in
comparative legal studies offer different answers to both issues. Comparative legal
diagnostics does not argue for or against any of them. It only forces the researcher to
explain what should be in the foreground and what is left in the background.80 Faced
with a bewildering array of factors to consider, the researcher has to choose which ones
will have the most significant impact for the policy problem at hand. The diagnostic
approach suggests some steps which can guide the researcher to a reasoned selection of
some portions of the context. The example of European contract law shows how the
analysis may unfold and which fruits it may bear.
It cannot be excluded that divergences could be narrowed if the diagnostic approach
opens up new perspectives. Moreover, methodological preferences would become
clearer. It is interesting to note here that the IAD framework has been proposed as a
baseline which can incorporate many different theories of the policy process, overcome
their shortcomings and allow scholars to take advantage of the cumulative knowledge

80
In this sense, it is a heuristic move, that is a way to generate new ideas about what counts as the
relevant context and the level of analysis: see A. Abbott, Methods of Discovery: Heuristics for the Social
Sciences, Norton, 2004, 137-144.

46
provided by each theory. 81 May the diagnostic approach produce something similar in
comparative legal studies ?

81
See J. Real-Dato, ‘Mechanisms of Policy Change: A Proposal for a Synthetic Explanatory Framework’,
(2009) 11 Journal of Comparative Policy Analysis: Research and Practice 117; M. Hill and P. Hupe,
Implementing Public Policy, Sage, 2009, 123-129; M.C. Nowlin, ‘Theories of the Policy Process: State of
the Research and Emerging Trends’, (2011) 39 Policy Studies Journal 41.

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