Abstract

http://ssrn.com/abstract=2318054
 
 

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Global Regime Divergence: Why the World Trade Regime Has Become More Legalized While the Financial Regime Has Become Less Legalized


Daniel Verdier


Ohio State University - Department of Political Science

June 2013


Abstract:     
The international trade and finance regimes exhibit different levels of legalization. The trade regime is made up of treaties, whereas the financial regime, in contrast, is ruled by agreements that are informal. This difference reflects the different institutional strategies that were successfully pursued by each group of globalists in their respective area over the last fifty years: exporters worked in close relation with their government to build a regime able to contain protectionist opposition at home and provide access to markets abroad; bankers, in contrast, accessed world markets by pressing for the repeal of government regulation at home and intergovernmental regulation abroad. Beyond offering an explanation for the institutional differences between the trade and financial regimes, the study makes three general contributions to the governance literature. First, the formal-informal dimension is shown to be part of a larger list of divergent traits between two broad ideal types of governance, labeled law-based and market-mediated. Second, the factors that account for the divergence between trade and finance also generalize to other regimes in the areas of economics, the environment, human rights, and security. Third, the study offers a typology of informal governance that cuts through the current distinction between trans-governmental networks and private governance.

Number of Pages in PDF File: 62

Keywords: international trade regime, formal and informal governance, law and market, global finance regime

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Date posted: September 3, 2013  

Suggested Citation

Verdier, Daniel, Global Regime Divergence: Why the World Trade Regime Has Become More Legalized While the Financial Regime Has Become Less Legalized (June 2013). Available at SSRN: http://ssrn.com/abstract=2318054 or http://dx.doi.org/10.2139/ssrn.2318054

Contact Information

Daniel Verdier (Contact Author)
Ohio State University - Department of Political Science ( email )
Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States
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