Anyone who wishes to understand the global dynamics of regulatory convergence and divergence should read this book. It is theoretically aware but is refreshingly grounded in a series of excellent case studies and is also refreshing in its midrange claims to significance. It advances a series of propositions about likely regulatory outcomes but concedes that there is “some variability that the propositions cannot explain” (p. 211), and it thus avoids making grand, all-encompassing, and reductionist theories that tempt some authors. Not that the book is without ambition. It identifies a lacuna in the understanding of the regulation of cross-border commerce and argues that both academics and practitioners “have missed a simple pattern in the impact of economic interdependence, and none have explained that pattern. This book fills that void” (p. 26).

Although Dale D. Murphy's study is published in a series on “international economic law” it is, like all effective studies of regulation, multidisciplinary. It draws much of its inspiration from the work of regulatory economists such as George Stigler and Oliver Williamson, but it draws eclectically on political scientists such as Richard Cooper and David Vogel. The central concern is with convergence and divergence in national regulatory regimes, which are analyzed through a triple categorization of “lowest common denominator” (race to the bottom); highest common denominator (what Vogel has called “the California effect”); and continued heterogeneneity. These possibilities are explored in six case studies. Two deal with lowest common denominator regimes in flags of convenience and offshore finance; two with highest common denominator outcomes in the Montreal Protocol on chlorofluorocarbons and the Basel Accord on capital adequacy; and two with continued heterogeneity in Mexican tuna-dolphin and infant formula.

The case studies are well executed and valuable in their own right. They incorporate original empirical research and are replete with insights, asides, novel interpretations, and a qualitative methodology that nicely combines structure and agency. Thus, the offshore finance discussion picks out the elite interpenetration between regulators and bankers and the role of George Bolton in creating the Eurodollar market; the tuna-dolphin discussion picks out the unanticipated consequences of destruction to other marine life as a result of changing fishing modes prompted by the U.S. import ban.

The case studies develop three insights that constitute the core theoretical argument and that should provide valuable tools for other researchers: 1) a distinction between “process” regulation (that deals with the way in which products are produced and sold) and “market access” regulation (which restrict access to national markets); 2) a concern with market structure, in particular, the size of the market and the extent to which it is oligopolized and dominated by a few large firms; and 3) a focus on the degree of national and international “asset specificity” of investments and transactions, which deals with the extent to which capital is “sunk” or “locked in” to that specific activity. The propositions seek to explain the behavior of firms within these markets in terms of their market strategies (essentially implying a rational utility maximization framework) and the way they seek to influence governments and agencies to pursue regulatory strategies that are favorable to their interests. To this extent, the study is a candid application and development of Stigler's insights into the way in which companies actively seek regulation favorable to their interests. But while the study shares Stigler's cynicism about corporate motives, it is far more nuanced, far less deterministic, and far more eclectic in its expectations of outcomes.

Thus, a crude application of Stigler's approach would suggest that companies would be in favor of more intensive regulations that limit access to their markets and thus limit competition. But Murphy also finds that companies resist “process” regulations, and so in markets where these are more important, we see instead regulatory laxity, as in the case of flags of convenience. This discussion provides analytical tools of considerable explanatory power.

In his concluding chapter, Murphy explores future research agendas and the implications of his study. He suggests, boldly, that “one can derive certain predictions from this book's propositions” (p. 247). This is dangerous territory in the social sciences, but prediction is a test of both the robustness of analytical approaches and the utility of the findings for a practitioner audience. Thus, his approach would suggest that when we have large firms in oligopolistic industries, where market-access regulation is practicable, and there is a high level of asset specificity, then we will experience a “race to the top” with global convergence on high specification regulations. Murphy suggests that this is more usual than the widely feared “race to the bottom,” but he avoids a normative perspective on such outcomes. He is deliberately nonjudgmental, although in some instances the reader might have welcomed a more normative assessment of, for instance, the implications for the democratic process of the corporate lobbying power that the book identifies.

There are some shortcomings with Murphy's approach and coverage. The study is biased toward a U.S. literature and towards U.S. case studies. There is a deliberate and unfortunate avoidance of European cases and of the regulatory implications of European Union integration and managed convergence. Some of the case studies (as with infant formula) are too brief, and the theoretical presentations that accompany them can be rather heavy going. For the methodological purists, the selection criteria for the case studies raises questions, and it would be interesting to see the propositions tested on a wider range of cases. My two main concerns, however, regard the theoretical underpinnings of the study. Murphy's framework centers on economic forces mediated through corporate strategies. It emphasizes market rationality and, hence, downplays extra-economic motivations—from personality and leadership to corporate social responsibility. He concedes some of these points in his closing chapter, but they constitute a limitation of his approach nonetheless. The second systematic problem is that the book is far better in analyzing the reasons why companies demand regulation than it is in explaining why governments concede to these demands. There is material on lobbying and corporate influence, but although “the regulatory outcomes are viewed as the result of producer preferences” (p. 211), there is no rigorous explanation of why agencies and governments have accommodated those producer preferences as thoroughly and as sympathetically as this book suggests. Again, Murphy anticipates this criticism in a short epilogue on “scholarship and the study of firms,” insisting on the need “to study and differentiate between firms” (p. 255) and maintaining that large, dominant, and managerially controlled firms remain the determining influence within global regulatory regimes.

The Structure of Regulatory Competition establishes an important research agenda. For placing the firm at the center of his analysis, for offering a nuanced account of firm behavior, and at the same time identifying future lines of inquiry, Murphy is to be commended.