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Saturday, December 06, 2003

Can Business Regulation be Globalized?

Friday, December 5, 2003, the University of Louisville announced the 2004 winner of the $200,000 Grawemeyer Award for Ideas Improving World Order.

As is apparent from this AP story in The Australian ("Aussie researchers win book award"), the latest award has gone to John Braithwaite and Peter Drahos, law professors at the Australian National University, in Canberra, for their book, Global Business Regulation. The AP story has been widely syndicated in Australian newspapers:
The bulk of the 704-page book is an analysis of 13 case studies of global business operations and how they are regulated in areas such as environmental standards, labour and trade.

Published in 2000, it involved interviews with more than 500 government, business and non-governmental organisation leaders and took more than 10 years to complete.

"A major theme of the book is how weaker players, or citizens, protect their interests in a movement that seems to be led by large corporations and the forces of history," he [Drahos] told The Courier-Journal of Louisville.

The authors concluded global business interests usually trump citizen and consumer interests - notably in pharmaceuticals and food standards. But they found that globalisation sometimes allows people to learn more about how multinational businesses operate than about companies that do business only in one country.
As I've blogged before, liberal globalization has basically meant relatively free mobility of capital, but labor does not have similar free movement and the regulatory power of the state is quite limited worldwide.

Thus, business is uniquely privileged under the status quo globalization pathway. The kinds of ideas Braithwaite and Drahos emphasize can help plug one part of the gap.

Interestingly, the authors plan to put their cash award to this purpose:
Drahos said they are considering using the $US 200,000 prize to establish an organisation that would advance the principles in the book.

"I figure if we can't do something with this money and the prestige of the Grawemeyer prize, we're not really worth our salt, as it were," he said.
Disclosure: I oversee the administration of this prize.

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