Economic Globalization and the Rise of Efficient Systems of Global Private Lawmaking: Wal-Mart as Global Legislator

Abstract

This essay focuses on Wal-Mart's role in an important emerging phenomenon: the development of efficient systems of private law making by non-governmental organizations that sometimes supplement, and sometimes displace traditional legal systems. These emerging global systems of private law making are spearheaded by an important group of large multinational corporations like Wal-Mart. It arises in the shadow of, parallel with, and in response to the less successful attempts by national and international bodies to regulate economic behavior on a global scale. These systems are grounded in private law, contractual and business connections between the great multi-national corporations and the many entities with which they have business relationships. This essay concentrates on one aspect of those connections - supplier or supply chain agreements involving multinational corporations. It examines the way Wal-Mart is able to use those contractual relationships to legislate behavior among its suppliers with respect to product quality, working conditions for the suppliers' employees, ethical conduct, and similar matters. The particulars of those behaviors reflect Wal-Mart's perception of the tastes and expectations of its consumers, investors and the financial community. Those tastes and expectations, in turn, are formed by elements of civil society and spread by elements of the media. Civil society elements serve not only to form consumer tastes, but also to develop Wal-Mart's specific set of behavior norms and then independently monitor compliance by Wal-Mart and its suppliers with their obligations. The media independently serves as the source of legitimacy and the conduit through which the results of civil society monitoring efforts, and the efforts of Wal-Mart to correct these breaches are transmitted. The media also serves as a forum through which consumer and investment tastes in behavior are developed. Together, multinationals, elements of civil society, the media, and the consumer-investor community constitute the elements of an autonomous system for the efficient regulation of economic behavior on a global scale that may contribute to the development of functionally differentiated and partial global systems of common law beyond the state.

Keywords: Wal-Mart,globalization, private law, civil society, jordan, germany, suppliers, multinational corporations

JEL Classification: K19, K22, K42, L21, L22, L59, O19, Z1