Regulatory Competition and Utilitarianism

Abstract

Abstract The hypothesis this chapter sets out from is that regulatory competition is promising as a political strategy only if one shares a number of basic premises that are associated with political utilitarianism. The chapter thus discusses the following questions. In what way could regulatory competition be interpreted as being linked to utilitarianism? To what extent does the appeal of law markets depend on utilitarian assumptions that also underwrite welfare economics? An answer to these questions leads to the conclusion that problems with certain utilitarian assumptions translate into criticisms of regulatory competition as a policy approach. Two particular instances of regulatory competition are used to illustrate its utilitarian pedigree and associated problems. First, tax competition and its effects on states’ ability to implement policies leading to resource redistribution. Second, labour law regarding the employee involvement in corporate decision-making, particularly by mandatory co-determination.