24 Pages Posted: 19 Oct 2005
Date Written: 2005
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: 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