* A Public Choice Model
International Economic Cooperation and the Decline of the Nation State
(with J. Macey), [Cardozo Law Review, 18, 1996, pp.401-432.] download
The rate of formal and informal coordination of regulation among states has been increasing despite the fact that bureaucrats and politicians appear to value autonomy. The article builds on a model of international behavior where regulators would prefer to remain wholly autonomous, but are unable to because the firms that the regulators want to regulate are increasingly able to avoid domestic regulation. Bureaucrats who want a particular policy outcome, yet lack the political clout to obtain that outcome domestically can collude with regulators in other countries to achieve the policy outcome they prefer. Where the bureaucrats' desired policy outcome is enshrined in an international accord, then the bureaucrats' claim that the policy should be adopted has much more force. The value of international harmony and coordination is substituted for whatever substantive value is reflected in the regulations.This article applies its theory to two case studies: the inte-national coordination of capital adequacy requirements for banks, and the international coordination of insider trading regulation.