Systemic Regulation of Global Trade and Finance: A Tale of Two Systems

Journal of International Economic Law, Vol. 13, No. 3, pp. 551-574, 2010

Georgetown Public Law Research Paper No. 11-35

Georgetown Law and Economics Research Paper No. 11-07

25 Pages Posted: 18 Mar 2011 Last revised: 1 Apr 2011

See all articles by R. Michael Gadbaw

R. Michael Gadbaw

Institute of International Economic Law, Georgetown University Law Center

Date Written: September 1, 2010

Abstract

The recent financial crisis has put enormous strains on the global systems governing international finance and trade. These two important international regulatory systems, created after World War II to promote growth and stability in the global economy, were put to the test in ways unprecedented since the 1930s. This article seeks to analyze and compare their performance as systemic regulators in the course of the crisis and concludes that the trading system performed quite well while the financial system virtually collapsed. This article seeks to account for this difference by looking at the nature of the rules and the institutions governing each and how they evolved so differently over the past 70 years. Central to the success of the World Trade Organization (WTO) is a regulatory approach that includes rules designed, and tested in practice, to align incentives with the public good and prevent regulatory capture and a self-enforcing dispute settlement mechanism that ensures accountability and enforceability. The article concludes that these differences hold important lessons for the reform of the rules and institutions governing finance and trade in the global economy, and the role the WTO should play in this reform.

Keywords: regulation, trade, finance, WTO

JEL Classification: G28, K33, N40, P45, E16, F02, F13, F40, F30

Suggested Citation

Gadbaw, R. Michael, Systemic Regulation of Global Trade and Finance: A Tale of Two Systems (September 1, 2010). Journal of International Economic Law, Vol. 13, No. 3, pp. 551-574, 2010, Georgetown Public Law Research Paper No. 11-35, Georgetown Law and Economics Research Paper No. 11-07, Available at SSRN: https://ssrn.com/abstract=1785749

R. Michael Gadbaw (Contact Author)

Institute of International Economic Law, Georgetown University Law Center ( email )

Georgetown University Law Center
600 New Jersey Avenue, NW
Washington, DC 20001
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
107
Abstract Views
803
rank
319,016
PlumX Metrics