Consultation and Legitimacy in Transnational Standard-Setting

Abstract

The recent financial crisis has generated agreement on the need for new transnational standards for financial regulation. When governments work together to develop transnational standards and rules they do so using processes which are not uniform, which often seem to develop in an ad hoc manner, and which do not necessarily reflect any particular conception of good government. Transnational standard setters have responded to critiques of the legitimacy of their role by emphasizing consultation of stakeholders. The article compares the uses of consultation in the development of policy at the national and supranational levels. It examines weaknesses in the construction of transnational consultations: transnational consultations lack visibility and they are usually carried out in a limited number of languages, or even only in English. These defects undermine the value of transnational consultations as mechanisms of legitimation.

JEL Classification: G15, K20, K33