Standards are important, but they can develop without governments
With a new baby at home, I have time to respond only briefly to Glen Whitman's post about De Soto and Polycentric Law. Glen points out that while property rights tend to form spontaneously, having many different local systems is less effective than having widespread standards. I'm in complete agreement so far. Where I disagree is on one single word, in bold below:
This poses a challenge to polycentrists, who contend that multiple legal systems can exist side-by-side. They can, but De Soto contends that formal unification is required for sustained and widespread economic growth.
I would argue that this is just a case about standards, as Glen and De Soto's argument don't seem to particularly depend on the features of this being a standard in rights or laws. It seems clear that having the government mandate standards is quite effective at making them widespread and uniform. The problem is quality. When standards are set by politicians, they are products of the political marketplace, which as we well know produces a much inferior product to the higgledy-piggledy of a real market, where different approaches are tried, modified, melded, and abandoned if they aren't good enough.
With laws, as with anything, while an altruistic government might best be able to unify local standards, there is no such beast. All we have are herds of swine like those fellows in DC, and I don't exactly trust them to keep my best interests in mind. My DVD's play on every DVD player, my browser can access almost every web site, and my computer can read a vast array of types of data files - all without any mandated standardization. Why do we think unifying legal standards requires the heavy hand of coercive government?
It would be a disserve here to miss the fact that Glen has a specific example from De Soto, about mining laws in the US, where government intervention was helpful. While I am not familiar with this example, there are two generic answers. The first is that while it may be that government regulation is sometimes helpful, that does not mean it is on net helpful. And the second is that in a country with strong government and without the institutions of polycentric law, I would not expect the market for laws to function particularly well. This parallel's De Soto's points about the problems with economic development in countries without a history of strong property rights. Even polycentrism requires institutions and culture, especially for a sophisticated function like unification. For example, it took many centuries for the Lex Mercatoria to develop from the morass of medieval laws for international trade.
(Ah, this turned out not so brief - the little fella stayed asleep for me.)