Transnational economic activism and private regulatory power

Abstract

ABSTRACT Private bodies involved in global regulatory governance shape and monitor economic behaviour. Their regulatory power has greatly increased over the last several decades. Thanks to an impressive apparatus of standard-setting, they have transformed economic activity. The dominance of private bodies in standard-setting has continued despite crises to which they themselves have contributed. Existing literature suggests that the State ‘orchestrates’ private regulatory activity, thereby retaining a high level of control. Yet, this article shows that the opposite has occurred: crises, broadly defined as disruptive events, make private bodies more resilient or generate new transnational ones. The lack of State control has ushered in a new era of private authority. Private bodies use crises as opportunities to reorganize and become more assertive in norm-creation, overriding and substituting State powers. Free from organizational hierarchies, formal accountability structures, scrutiny, pressure, and obligations, private bodies expand their regulatory domain, enhance their collective memory and identity, and grow stronger through crises. Future empirical work on the interaction between public regulatory and supervisory authorities and private rule-makers can make a difference in ensuring that private rule-making serves the public interest.