In the introduction to this interesting collection, editors Walter Mattli and Ngaire Woods state that assessing global regulations “necessitates a thorough examination of the politics at each stage of the regulatory process: what actors are in or out at key junctures, why, and with what distributional consequences?” (p. 3). They argue that the more open the process establishing international regulations, the less likely that the regulatory scheme will benefit narrow interests, and the more likely that it will serve broader purposes. Nonetheless, regulatory schemes may still be captured by narrow interests during implementation if institutional settings allow the targeted groups too much control. Analysis of global regulation requires looking within national jurisdictions, but also at the international level.
Mattli and Woods claim that three factors shape the possibility that change in global regulation will benefit broader interests: adequate information about the costs and benefits for diverse actors, converging interests among those actors, and ideas that can serve to draw together interested actors within existing institutions. They use the level of information and the array of interests to describe the degree of demand for regulation, and the degree of transparency and inclusiveness of institutions to describe the institutional supply. When both demand for regulation and institutional supply are limited, private actors may capture regulation, designing it for their own benefit. When demand is broad but institutional supply limited, the targets of regulation will still capture it but must make concessions to other actors. When demand is narrow but institutional supply extensive, the targets of regulation are again likely to get the regulatory scheme they seek. Common-interest regulation only emerges when demand is broad and there is extensive institutional supply. Given that this last combination is difficult to achieve in global settings, it is no surprise that global regulations tend to be “softer” (in the sense that they do not constrain actors' behavior as tightly as most national regulation does). Mattli and Woods contend that change is due to both demand-side and institutional factors.
Kenneth Abbott and Duncan Snidal build on these thoughts by breaking the process of regulatory change into five steps: agenda setting, negotiation, implementation, monitoring, and finally enforcement. To understand the global regulation of transnational production, they introduce the idea of a “governance triangle,” with nongovernmental organizations located at one point, firms at a second, and states at the third. They then locate different global regulatory schemes on this triangle both to illustrate the wide variety of regulatory schemes and to describe shifts over time. By unpacking the regulatory process, Abbott and Snidal are able to model bargaining between firms, NGOs, and states. Thus, while externalities in transnational production remain significant problems, states and NGOs have been able to impose regulatory schemes on firms in recent years.
In the first chapter focusing on a single issue area, Eric Helleiner examines the reasons why contracts between private lenders and sovereign states have evolved in the past decade. Since 2003, these contracts have included clauses meant to constrain the actions of both creditors and debtors. Creditors must work together, rather than compete for repayment, while both creditors and debtors accept a code of conduct to manage the restructuring of sovereign bonds. Helleiner illustrates how the debt crises of the 1980s, followed by the East Asian financial crisis of 1997–98 and the 2001 Argentine financial crisis, discredited older approaches and ideas; moreover, these crises demonstrated the degree to which creditors and borrowers share some interests. Helleiner also describes why both “creditor” states and sovereign borrowers would prefer the use of clauses in contracts, by explaining why international regulation, through international financial institutions such as the IMF, failed.
In her chapter, Kathryn Sikkink examines the development of human rights regulations. The experience of the World War II triggered the initial efforts in this domain, but these relied on states promising self-restraint. The more this scheme appeared ineffective, the more a variety of actors—states and NGOs—began pushing for new regulations that emphasized individual responsibility for human rights violations. The process of change was clearly supported by open and participatory politics within many countries. Yet, the effectiveness of global regulation in this area remains largely unproven.
David Vogel's chapter focuses on civil regulation (defined as private, nonstate, or market-based regulatory frameworks used to govern multinational firms or supply networks; see p. 153). Vogel points out that such regulation has burgeoned in recent years precisely because the national or international authorities have either failed or declined to regulate certain activities. NGOs have introduced concerns for a wide variety of subjects (including but not limited to animal rights, environmental protection, and labor rights) to challenge the notion that private companies should only be concerned about providing profits for shareholders. In response, firms have begun adopting codes to outline their social responsibility, but Vogel notes the mixed quality of such codes, as well as their uneven distribution.
Sam Barrows first describes the dramatic increase in safety for maritime workers since the 1970s, which, he argues, is due to more effective regulation. Environmental damage from accidents involving oil tankers (such as the Torrey Canyon in 1967 and Amoco Cadiz in 1978) proved to be the catalyst for the coalition demanding improved regulation. Broader interest in the subject spurred the development of more effective monitoring and enforcement across many countries, in the “governance triangle” described by Abbott and Snidal. Shipowners themselves, along with insurance companies, faced higher potential liabilities, prompting them to support greater regulation.
Judith Goldstein and Richard Steinberg treat GATT and the World Trade Organization as an evolving regulatory scheme. Whereas GATT ran as a political setting for making rules, the WTO handles trade disputes through increasingly judicial processes. Again we can observe the governance triangle at work: powerful protectionist interests within states, states themselves, and other domestic actors. Increased information about the costs of protectionism, as well as new ideas concerning dispute settlement mechanisms, triggered the shift in support for this movement toward judicial processes. Goldstein and Steinberg claim that the result has been to move international trade regulations away from an outcome characterized more by capture to the sort of situation where demand for regulation is broad, institutional supply is extensive and inclusive, and common interests are more likely to be met.
The volume's final chapter by Miles Kahler and David Lake serves in lieu of a traditional conclusion. Kahler and Lake concentrate on the international factors influencing global regulation. Whereas economic models would predict increased cooperation by states to govern the international economy as globalization proceeds, they note that governance also occurs through hierarchies and networks. Hierarchy exists when others follow the lead of a dominant state; networks occur when actors share regulatory responsibilities via intensive interaction. Kahler and Lake explain why different actors prefer one of these three solutions (a supranational institution, hierarchy, or network) over others by tracing out the distributional effects at both the systemic and national levels. They also point out that each of these modes of global regulation remains vulnerable to capture by the targets of regulation.
The theoretical frameworks offered by the editors and then developed by Abbott and Snidal provide useful ways to break down the politics behind global regulation. The case studies in the book are useful in that they refer back to these concepts and describe how regulatory schemes have changed over time. Taken together, these chapters cover a wide range of regulatory domains characterized by varied levels of regulatory coverage and effectiveness. The final chapter nicely connects these arguments to one another and to the broader literature on international regimes, at the same time identifying new and fruitful lines of inquiry.
