PRIVATE-PUBLIC PUZZLES: Inter-firm competition and transnational private regulation
Daniel Mügge
ASSR-WP0507
Abstract
Much recent scholarship has acknowledged that private actors exert considerable influence on politics beyond the nation state. Conflating private governance with private authority, however, it is often ignored that public governance (international negotiations, for example) may equally be beholden to private interests. The question for scholars of private actors in transnational governance is therefore not only whether they have an influence at all--they normally do. Rather, the question is under which conditions transnational rule setting institutions will have a private or public character--whether they will be inside the domain of the state and inter-national organizations, or formally controlled by private actors.
Focusing on transnational business regulation, the paper presents several related arguments: First, in many cases transnational private regulation can be understood as a means dominant firms employ to stabilize their grip on a particular market segment and keep potential competitors at bay. Second, transnational private regulation is only likely to emerge if a stable ‘conception of control’ has emerged among the incumbent firms in a segment. Third, transnational public governance is likely to emerge if producer firms ‘draw the state back in’ in order to fend off competitive threats. These arguments are illustrated with three empirical cases studies from financial and business services: Eurobond underwriting, auditing and trading services for listed derivatives.
