Local Rules and a Global Economy : An Economic Policy Perspective

This article explores the growing significance and theoretical implications of ‘local rules' — such as Chinese labor standards, US financial regulation and Swiss bank secrecy rules — in the global economy. In particular, the argument developed is that Ronald Coase's framework for analyzing the effects of legal rules on economic welfare can help to reveal important weaknesses in current international legal approaches to analyzing the transnational impact of local rules as well as contribute to a ‘global economic policy perspective' better attuned to problems of power in the global regulatory order. Such a perspective will help us to see the effects of power differences among political and economic actors in the global economy more clearly, and perhaps also to develop new and more complex notions of economic participation, political pluralism and distributive justice in the creation and operation of both the local and the international rules that comprise the global economic regulatory order