How do authoritarian states build the legal infrastructure of private law necessary to support efficient markets? This is the question that Lizhi Liu and Barry Weingast ask in their paper, Law, Chinese Style: Solving the Authoritarian’s legal Dilemma though the Private Provision of Law. Liu and Weingast hypothesize that authoritarians typically undersupply this infrastructure due to an “authoritarian’s legal dilemma”: how to create a judiciary that would supply and only supply private law. If a judiciary is sufficiently strong and independent to support private law, it cannot credibly commit not to constrain the autocrat by strengthening public law (e.g., citizen rights, constitution). They argue that China has devised a novel solution to this dilemma: partially outsourcing the provision of private law to key private actors. In China’s 700-million-user e-commerce market, online trading platforms (e.g.,Taobao) have privately supplied strong legal infrastructure to enforce contracts, prevent fraud, and settle disputes. Such platforms both enforce and create private law through rule experimentation. They suggest this digital route to legal development maybe politically viable and potentially generalizable to other states.

Guarini Global Law & Tech welcomed Lizhi Liu (Georgetown University) to the Guarini Colloquium: Regulating Global Digital Corporations to discuss her paper.