The political economy of regulatory competition: A diachronic institutional theory of legal change in an era of globalization (The Netherlands)

This dissertation seeks to gain a new purchase on existing regulatory competition theory by providing a close empirical examination of the political economy of regulatory competition. The general research strategy is to analyze the impact of globalization on national legal systems by deconstructing economic globalization into the market and technological forces that constitute the exit strategies of multinational corporations. In an empirical case study of Dutch waste management policies, I analyze the anticipatory strategies of regulators to these market and technological forces, as well as the corrective strategies of regulators to economic leakage. In an increasingly global market, economic leakage-under strict conditions-is shown to present a serious economic constraint to the social protection commitments of regulators. To overcome economic leakage, the dissertation demonstrates that regulators can only resort to three basic and non-exclusive, regulatory responses. These are: (1) harmonization at the next higher political level, (2) decentralization and/or corporatization of government services, and (3) re-erecting boundary controls over economic transactions. The difficulties and limitations implied by each of these three strategies are analyzed and a progressive alternative to provide social protection is presented in the form of contextual regulation that, when implemented properly, can be made robust against economic leakage. Contextual regulation by re-structuring the market on qualitative social protection grounds, internalizes protection commitments among corporations and thus addresses leakage incentives at source, rather than at the border. The dissertation concludes that in addressing economic incentives at source, contextual regulation may provide not only more effective, but also more democratic solutions to the global governance problems that beset our times.