Unilateral Corporate Regulation
William J. Magnuson
Harvard Law School
February 13, 2013
Corporations today wield unprecedented power in politics and society, and they have a tremendous effect on human welfare around the globe. At the same time, they are increasingly difficult to regulate. Corporations are savvy and mobile, and they can relocate to avoid burdensome domestic regulation with surprising ease. The agility of corporations creates a dilemma for government decisionmakers seeking to balance the need to attract the wealth that corporations create with the desire to protect consumers and pursue other policy priorities. One potential solution to this dilemma is international cooperation, and a growing number of scholars in the corporations literature have argued that formal or informal agreements are necessary to solve many of the regulatory problems associated with corporate agility. This emphasis on multilateral solutions, however, obscures the extent to which countries, and in particular large economic powers, can and do unilaterally impose their domestic regulations on international firms. This Article argues that unilateral corporate regulation can solve, or at least mitigate, many of the global problems that countries face. At the same time, a state’s assertion of unilateral regulatory authority in any particular issue area is costly and may reduce the effectiveness of regulation in other areas. The Article concludes by providing some prudential considerations for governments when they choose whether and how to enact unilateral corporate regulations.
Number of Pages in PDF File: 57working papers series
Date posted: February 13, 2013
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