David Bach

The European regulatory state and global public policy: micro-institutions, macro-influence

ABSTRACT Across a broad range of sectors, Europe is increasingly shaping global public policy. Existing research stressing the importance of market size for international regulatory influence cannot satisfactorily account for this. We contend that the rise of the regulatory state within Europe has significant international implications, augmenting Europes ability to shape global market rules. The article develops an institutional explanation of regulatory influence stressing domestic regulatory capacity. An analysis of two hotly contested transatlantic policy fields – data privacy and financial market regulation – provides a first test of the argument.

Transgovernmental Networks and Domestic Policy Convergence: Evidence from Insider Trading Regulation

Cross-border cooperation among domestic regulators and public officials has become a defining feature of global governance. While a number of studies have tracked the emergence and institutionalization of such transgovernmental networks, less is known about their effect on domestic policy. This study explores this link for the important case of insider-trading regulation in original data for 116 countries between 1977 and 2006. It offers quantitative evidence that transgovernmental cooperation is related to domestic policy convergence but that the relationship is more complex than often assumed. Direct ties to powerful regulators increases a jurisdictions likelihood of adopting internationally promoted policies such as insider-trading rules. Separately, membership in the International Organization of Securities Commissions (IOSCO), a forum designed to diffuse best practices among regulators, increases a jurisdictions likelihood of subsequently enforcing newly adopted policies. The findings in this study suggest that different network components are associated with distinct aspects of domestic policy convergence. The results are directly relevant for current public policy debates about the reregulation of global financial markets as transgovernmental networks among domestic regulators have assumed a critical role.

The International Implications of China's Fledgling Regulatory State: From Product Maker to Rule Maker

The principal analytical lens through which Western decision makers and commentators have viewed China’s rapid rise in the international economy is the country’s impact on global market prices. China is already the world’s fourth largest trading nation and has the world’s biggest labour force, and the prospect of a possible consumer base of over a million people makes it the most attractive emerging market. Because of this economic might, in both production and consumption, China has begun to shape prices for a large array of goods and services. While analysts disagree about the specifics, no-one fundamentally disputes that this ‘China Price’ effect exerts considerable influence over current international economic dynamics. This article’s main thesis is that the ongoing transformation of the Chinese state is empowering the country’s leaders to influence the non-market environment of business as well, and that this route of influence has the potential of being at least as important as changes in relative market prices. A series of domestic institutional reforms have provided Chinese policy makers with the tools to shape the rules and standards that underlie international markets and the terms of competition within them. We show that the particular importance of foreign direct investment (FDI) as a driver of China’s economic development amplifies the effects of ongoing domestic institutional capacity building. Having established itself as a global ‘product maker’, the next round of competition could see China establish itself as a potent ‘rule maker’ in the global economy. Indeed, evidence is mounting that Chinese policy makers are beginning to deploy their expanding regulatory capabilities to set clear market rules at home and leverage the Chinese market to export them internationally. While China’s already impressive domestic market plays a critical role in this strategy, market size alone is insufficient. We argue that China’s ability to influence international market rules depends on policy makers’ ability to employ new regulatory capabilities that are the result of a political transformation initiated more than two decades ago. Through a series of administrative reforms, China has constructed a fledgling regulatory state that gives policy makers new

Governing lipitor and lipstick: Capacity, sequencing, and power in international pharmaceutical and cosmetics regulation

ABSTRACT Over the last three decades, the pharmaceutical and cosmetics industries have become increasingly global. To ensure product safety and consumer protection, regulators in leading markets have applied domestic rules extraterritorially and have joined forces to harmonize rules through transgovernmental cooperation. Yet whereas the United States has long been the dominant player in international market regulation of pharmaceuticals, the European Union has decisively shaped global rules for cosmetics. What explains differences in agenda setting power across the two closely-related industries? We compare and contrast the expectations of a realist account focused on market size and a liberal functionalist argument centered on the role of market friction with a historical institutionalist explanation stressing the relative sequential development over time of domestic regulatory capacity in leading markets. The empirical evidence shows that domestic regulatory institutions systematically shape international market regulation. Historical institutionalism provides an important complement to existing transgovernmental research, offering clear expectations for the origins of and terms of influence within such cooperation. More generally, it opens up a rich toolbox for the analysis of industry-level global market governance, which affects the daily lives of many millions of consumers.

The Double Punch of Law and Technology: Fighting Music Piracy or Remaking Copyright in a Digital Age?

The battle between the recording industry and those illegal sharing music over the Internet has gripped headlines over the last few years like few others related to the digital age. At its core, it is a battle about the meaning of property and thus a battle over the heart of the emerging information economy. This article critically examines the double punch of law and technology the simultaneous and interwoven deployment of legal and electronic measures to protect digital content and asks whether it is merely a defense strategy against piracy, as the industry asserts, or rather an attempt to fundamentally redefine the producer-consumer relationship. Based on some initial evidence for the latter proposition, the article analyzes reasons for concern, outlines the current politics of copyright policymaking that have given producers the upper hand, and sketches elements of a strategy to fight music piracy that does not infringe on basic consumer rights.

Varieties of cooperation: the domestic institutional roots of global governance

This article develops a domestic institutional explanation for the growing institutional diversity in global economic governance. Transgovernmental networks linking domestic regulatory agencies have emerged in a number of areas alongside more conventional cooperation based on international organisations and regimes. At the same time, the number and scope of private self-regulatory schemes at the international level has markedly increased. While rich literatures have developed around each of these three governance cluster, less attention has been paid to the critical questions why, where, and when we are most likely to see one type of governance as opposed to another. The article argues that broad observable patterns of global governance result from specific configurations of domestic institutional variables in leading markets against the backdrop of the dynamics of market globalisation. Empirical evidence from case studies of global governance in the fields of securities, Internet domain names, intellectual property, and hedge funds broadly support the argument.

Privacy and regulation in a digital age

Owing to the pervasiveness of personal data collection, transmission, storage, and analysis, privacy has emerged as a central public policy concern in recent years. The chapter explains the repercussions of the digital revolution for personal privacy, and situates the current debate in proper historical context. It shows that privacy expectations vary with the social context, and derives a framework through which to understand geographic, sectoral, and temporal variation of privacy protection. Privacy regimes in Europe and the United States are not set apart by profound cultural differences, as is often argued, but instead rely on distinct sets of enforcement mechanisms. After reviewing the respective role of the public sector, the private sector, and technology in enforcing privacy standards, the chapter concludes with a look ahead to new challenges.

Frame or Get Framed: The Critical Role of Issue Framing in Nonmarket Management:

How a social or political issue is framed shapes the “nonmarket” context that surrounds it. Issue frames are not random; rather they are the product of strategic behavior by firms, government agencies, NGOs, and similar actors. Frames are not fixed and issues can be reframed over time. Framing is a powerful strategic tool that enables firms to shape the structure of the nonmarket environment to their advantage. This article identifies and illustrates five distinct pathways through which firms can shape different dimensions of the nonmarket environment.

Where business and politics meet

Tom BrownDavid BachStrategy is an essential ingredient of business success. In this interview, tells how he came to believe that nonmarket strategy is just as important for future corporate success.David BachTom Brown

China'S Impact on the Global Economy: From China Price to China Standard

China´s entry into the global economy is universally accepted as a defining feature of this new century. Much debate has focused on the impact its economy is having on world market prices, both as producer and consumer. This ´China Price´ effect puts tremendous pressure on Western firms. But China is not just competing on price. Supported by new regulatory institutions, it increasingly influences market rules and technology standards as well. Such Chinese efforts pose a direct challenge to Western competitiveness. While Western firms must adapt to the ´China Price´, countering the ´China Standard´ will require coordination with governments to formulate a countervailing regulatory agenda.