Regulatory Co-Opetition: Transcending the Regulatory Competition Debate

24 Pages Posted: 19 Oct 2005

See all articles by Damien Geradin

Damien Geradin

Tilburg Law and Economics Center (TILEC); Geradin Partners; University of East Anglia (UEA) - Centre for Competition Policy; University College London - Faculty of Laws

Joseph A. McCahery

Tilburg University - School of Law; European Banking Center (EBC); Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI)

Date Written: 2005

Abstract

In this paper, we critically examine the theory of regulatory competition. The departure point of this theory is that governments compete for factors of production - and also to attract habitants - when they regulate. Thus, regulation should satisfy citizen preferences if competition is effective. In general, it is argued that decentralized regulation produces more efficient results, because at the level of local government competition is greater. We discuss the main lines of this theoretical perspective and point to their normative implications. We then criticize the oversimplification of the theory and suggest an alternative approach, namely 'regulatory co-opetition'. This approach considers three main dimensions of competition and cooperation, including 'extra-governmental', in which nongovernmental actors also play a role. We argue that this multi-dimensional approach clarifies the complexity of actual regulatory strategies, in which different combinations of competition and cooperation are present in relationships between different actors involved in the regulatory arena. Each dimension influences the regulatory behavior of actors, creating pressures and opportunities.

Keywords: Regulatory competition, regulatory co-opetition, decentralization, nongovernmental actors

JEL Classification: H11, K20

Suggested Citation

Geradin, Damien and McCahery, Joseph A., Regulatory Co-Opetition: Transcending the Regulatory Competition Debate (2005). Amsterdam Center for Law & Economics Working Paper No. 2005-06, Available at SSRN: https://ssrn.com/abstract=821087 or http://dx.doi.org/10.2139/ssrn.821087

Damien Geradin

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Geradin Partners ( email )

Avenue Louise 475
Brussels
Belgium

University of East Anglia (UEA) - Centre for Competition Policy ( email )

UEA
Norwich Research Park
Norwich, Norfolk NR47TJ
United Kingdom

University College London - Faculty of Laws ( email )

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London WC1E OEG, WC1E 6BT
United Kingdom

Joseph A. McCahery (Contact Author)

Tilburg University - School of Law; European Banking Center (EBC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands
+31-(0)13-466-2306 (Phone)
+31-(0)13-466-2323 (Fax)

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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