Global Governance from the Perspective of Law and Economics

Abstract

The globalization process of the last decades has challenged the theoretical approaches of economics, particularly in the field of governance. This is the case with law and economics insofar as global rules, in conformity with economic principles,
are necessary to govern the increasing interdependence that emerges from larger and deeper relationships, particularly between national governments, transnational firms and international institutions, that characterize globalization. Considering global governance as the management of the world economy in a way that accommodates the interests of its diverse players, it is clear that there is no system of law that covers the global marketplace, at least in some important respects. Moreover, many of the globally relevant laws and rules are drawn up at a nation-state level. This paper explores the possible conflicts that may arise from this situation and the way that we can cope with them. It also raises some questions related to the core subject: What may the contribution of law and economics be to the resolution
of these problems? Is law and economics well-equipped to deal with international problems of this type? What are the legal incentives and consistent frameworks that may be created, inspired by this approach, for a better functioning of the global system? Within this context, we will focus on some major topics of law and economics, such as regulation and effective competition. Particular attention will be addressed to the analysis of global rules, their emergence and enforcement, linked to the choices made by the players on the international stage, for example between discretion and cooperation.