The Way Forward
Edited by Michael Faure and André van der Walt
Chapter 3: Private Law in a Globalizing World: Economic Criteria for Choosing the Optimal Regulatory Level in a Multi-level Government System
3. Private law in a globalizing world: economic criteria for choosing the optimal regulatory level in a multilevel government system Roger Van den Bergh 1 INTRODUCTION In multi-level systems of territorial jurisdictions, regulations may be enacted at either a higher (centralized) or a lower (decentralized) level of government. A prime example is the European Union (EU): a particular competence may be allocated to one of four different levels: the European Union, the Member States, the regions within the Member States and provinces or municipalities. The World Trade Organization (WTO) adds an additional layer of governance to this already complex vertical division of regulatory powers by creating scope for decision making at the world-wide level. This state of things poses difficult questions as to the optimal level of government. Should competences to enact regulations be exercised at the central level (European Union, World Trade Organization) or should such competences be decentralized and exercised by nation states or by regulatory agencies at lower levels of government within those states? Even though law was originally the exclusive domain of nation states, the ambitious internal market programme of the European Community (EC) has led to a substantial reshuffling of regulatory competences. Since the achievement of the internal market is often considered an exclusive competence of the EC, Member States have lost large parts of their regulatory autonomy in areas of law affecting the four fundamental economic freedoms. Even though the World Trade Organization does not enjoy similar regulatory powers – since there is no direct...
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