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The States as a Laboratory: Legal Innovation and State Competition for Corporate Charters, 23 Yale Journal on Regulation 209 (2006)


Corporate law is an arena in which the metaphor of the "states as a
laboratory" describes actual practice, and, for the most part, this is a
laboratory that has worked reasonably well. The goal ofthis Article is to map
out over time the diffusion ofcorporate law reforms across the states. The lawmaking pattern we observe indicates a dynamic process in which legal
innovations originate from several sources, creating a period of legal
experimentation that tends to identifY a statutory formulation that is thereafter adopted by the vast majority ofstates. Delaware and the Model Act quite often work in tandem. But there are occasions when they advance differing legal rules, accounting for some of the diversity in corporation codes that we observe.

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