PRECONDITIONS TO REGULATORY COMPETITION

Abstract

Regulatory competition is often believed to be a hard fact of the post globalization era. Legal systems must be economically “attractive” – and thus law makers must work to achieve this purpose. However, this view – as simple and seductive as it is – is not sound. Indeed, a quick analysis of the preconditions to regulatory competition will show that far from being a brutal reality, it is quite reduced, even in the context of the European Union. This article has two purposes. The first one is theoretical: what are the conditions required to enter regulatory competition in the real life? This question will lead to a new “understanding” of regulatory competition’s problematics. For example, it will be made clear that the doing business approach is largely flawed. Indirectly this question will also lead to an inquiry into the interconnections that exist between legal system and the necessity to think about a new model (like coopetition). The second one is more practical. To what extent should law makers be focused on the attractiveness of their own legal system? Clearly, they will have to pay attention to this dimension, but their freedom in choosing a rule is wider than it seems under the regulatory competition’s approach. Frequently paying attention only to the internal efficiency of their system is sufficient.