TILEC Work In Progress: Konrad Borowicz

Contracts evolve, but they are also designed. In fact, contract design often precedes contract evolution and determines the direction of the contract’s evolutionary path. Contracts are typically designed by organizations, such as trade associations, and their governance structures as well as the regulations these organizations are subject to can either constrain or facilitate contract evolution. This article develops an account of the conditions under which the governance structures of organizations entrusted with contract design as well as the regulations these organizations are subject to can facilitate welfare-enhancing contract evolution.