Decentralization of Economic Law - An Oxymoron

Abstract

The interest in decentralizing governance is increasing worldwide. In Europe too, a policy of decentralization is being applied. In economic law, notably in both the cases of competition and financial services law, new rules are in the process of being introduced. In competition law, the Regulation on the implementation of the rules on competition has lead to a decentralized model of law enforcement. In financial services law, the new Directive on markets in financial instruments has proposed the introduction of a four-level rule-making model, which may represent a participative, decentralized approach, but has resulted in a centralization of that process, while the enforcement remains decentralized. This essay provides a brief overview of these models of regulation. Then, it examines these regulatory structures and focuses on the question of the impact of the decentralization process in the context of decentred understandings of regulation. It points to the paradox of law being decentralized where it is a centralized function and thus representing an oxymoron. The paper argues that decentralization results in an oxymoron depending on the function of law considered. The overall purpose of the paper is to contribute to a better understanding of governance through decentralization.