Transnational Legal Process and State Change: Opportunities and Constraints

1. Transnational Legal Process and State Change: Opportunities and Constraints By Gregory Shaffer

2. Introduction • A Transnational Era and its Impact on Law • Historical & contemporary US manifestation: Politics of judicial appointments and citations to IL and foreign law • Term TL often used, but need clarifying conceptual work & empirical assessment • Symposium issue: Essay builds a socio-legal framework for analysis, illustrates from 5 empirical projects that follow

3. What is Transnational Law and Legal Process? • TL as Situational: Phillip Jessop: TL is “all law which regulates actions or events that transcend national frontiers.” • TL as combination of public and private IL • Craig Scott: Common principles developing to govern cross-border activities; can become systematized and non-statist

4. Harold Koh: TL as “Flow” TL= “(1) law that is “downloaded” from international to domestic law…; (2) law that is “uploaded, then downloaded”: for example, a rule that originates in a domestic legal system, ... which then becomes part of IL, and from there becomes internalized into nearly every legal system in the world; and (3) law that is borrowed or “horizontally transplanted” from one national system to another…”

5. Modify: TL as Construction & Flow Transnational Law as Transnational Construction and Flow of Legal Norms: Law in which transnational actors, be they institutions or networks of public or private actors, play a role in constructing and diffusing legal norms, even if in large part the legal norm is taken from a national legal order, such as a powerful state like the US

6. Socio-legal Critique of Koh Failure to assess: (i) Production of transnational law (ii) Dimensions of change (iii) Conditions, mechanisms and factors explaining variation in such change: (iv) Never “beams the searchlight of social science” on processes of adoption; transplantation; adaptation; translation; bricolage; appropriation; rejection of TL

7. Transnational Legal Process/Orders • Legal norms: Norms that lay out behavioral prescriptions issued by an authoritative source that take written form, although they need not be binding or backed by a dispute settlement or other enforcement system • TLP: The process through which the transntl conveyance of legal norms takes place • TLO: Collection of more or less codified norms and associated institutions within a given functional domain

8. Theory, Design, Methodology • Theory/Analytic Framework : Seek to explain operation and effects of TLPs • Research Design: Series of systematic studies of (1) interaction of transnational and national: (2) in regulatory spaces; (3) in different countries; (4) over time, (5) to assess patterns & variation • Methodology: Empirical: qualitative and quantitative; mixed methods

9. 5 Empirical Studies: Halliday • Halliday (Bankruptcy law: China, Korea, Indonesia) • US, UK provide templates for global norms • Pivotal events: Berlin Wall, debt crises • IMF and WB and Asian Financial Crisis • UNCITRAL drew for Model Law; Legis. Guide • Indonesia: change and resistance • Korea: intermediaries; China: modeling

10. Empirical Study: Klug Klug (IP & competition law: South Africa) -oppty’s and constraints for post-Apartheid ANC • WTO regime and IP- pharmaceutical sector • AIDS crisis: WHO and health department • ICN (Intl Competition Network) 2001 • Challenge drug pricing; black empowerment

11. Empirical Study: Rocha Machado • Rocha Machado (Anti-money laundering law: Brazil & Argentina) • Basel Committee on Banking Supervision: 10 • FATF 40 Recommendations (reports; monitor) • UN conventions: 2002; 2003 • Brazil: criminalize; financial integill unit; enlist • Argentina: largely symbolic in response to pressure

12. Empirical Study: Morgan; Kim et al • Morgan (Municipal water services provision law and instns: Chile, Bolivia, Argentina) - Transnatl epistemic network: devlpment banks; OECD; MNCs; Water Council- transactional model; independent agencies; courts • Kim, Boyle & Haltinner (primary education as HRt in low & middle income countries) - IMF structural adjustment vs UDHR/ICESCR/UN CRC; NGOs

13. 5 Dimensions of State Change (1) Changing National Law and Practice: enactment & practice; substance & procedure (2) Changes in Boundary of State and Market: What State Does: State Expands; Devolves; Steers (3) Changes in Institutional Architecture of the State: Allocation of authority between executive, legislature, independent agencies, courts

14. Dimensions of State Change (cont) (4) Shaping Markets for Expertise and Expertise’s Role in Governance: new specializations- more technocratic forms of governance; individs/elites invest; serve as conduits (5) Shifting Accountability Mechanisms & Normative Frames • Monitoring, reporting, peer review within particular normative frames • New patterns of interaction and association • Examples- WTO; FATF; Conven Rights of Child

15. 3 Clusters: Factors Explaining Location, Extent & Limits of State Change • The TLO: its legitimacy, clarity and coherence: 3 components (i) Legitimacyof TL & 4 mechanisms of change (coercion; reciprocity; persuasion; acculturation) • Legitimation as mechanism in 4 conceptions of power (agency; institutional; structural; productive) • Legitimacy’s 3 dimensions: input; throughput; output (UNCITRAL & bankruptcy; CRC and free education) (ii) Clarity of TL: Variation in features of law: hard & soft law (TRIPS & Competition norms) • Coherence of TLOs: TLOs as complements or antagonists in fragmented system-affect degrees of freedom (TRIPS & WHO & access to medicines) • Harnessing historic events: punctuated equilibria (FATF)

16. Explanatory Factors(2) Relation of TLO-Receiving State (2) : Intermediating Factors: Power Asymmetries and Intermediaries btw TLO & Receiving State • Structural power: colonialism; financial instns • Implementation challenge: Symbolic vs Practical; Law-in-books vs Law-in-Action • e.g. Indonesia & bankruptcy • Intermediaries: carriers/conduits; diagnose; monitor; translate; adapt; legitimate

17. Explanatory Factors re State Transformation (3) (3) Domestic Context: (i) Affinity with domestic demand in light extent of change at stake, (ii) in light of domestic power struggles, (iii) domestic institutional legacies, (iv) Consonant with local discursive frames • Translation and appropriation in light of own histories: e.g. competition law in South Africa; money laundering in Brazil; Chile & urban water services; bankruptcy law and China

18. Conclusions: 5 points • TL critical for understanding how national instns shaped and understood; provides tools (i) Need identify dimensions of state change: 5 (ii) Heterogeneous Nature of TLP (competition) (iii) Conditional Effects: 3 clusters of factors (iv) Multidirectional Nature of TLP: Key of Recursivity in Studying TLP and State Change– adv. of frame around regulatory spaces, not levels of IL/natl (v) Can’t reduce to realpolitick- role of law, lawyers & institutions; mediators; conveyors & natl resilience • Need for further research: costs & payoffs