Prescriptive Authority: Global Markets as a Challenge to National Regulatory System

I. INTRODUCTION As economic activity becomes increasingly global, its normative context remains largely state-based. The resulting tension between private economic conduct and the normative claims of foreign states challenges both economic actors and national regulatory systems. With increasing numbers of states and institutions seeking to influence conduct on global markets, conflicts among jurisdictional claims increase. These conflicts, in turn, create uncertainties and costs for both private businesses and public institutions and often impede the effectiveness of both. Moreover, global markets present opportunities for jurisdictional law to play new roles in creating value on and from those markets. Understanding and responding to this challenge is thus fundamental to attaining both private and public goals. The challenge centers on one question: Who can legitimately prescribe norms for economic conduct? The core issue is jurisdiction. Nevertheless, although the conflict between global markets and state claims is often noted, the role of international jurisdictional law in it is often neglected. Even among lawyers, that role is often misunderstood and its significance overlooked. This paper explores that challenge. It has three main objectives. One is to identify the key components of international jurisdictional law. We need to know where we are in order to see more clearly where we want to go and how we might get there. A second is to identify some of the ways in which global markets challenge the effectiveness of current jurisdictional tools. There is much general discussion of global markets and economic globalization, but here we will look specifically at the characteristics of global markets as they impact international jurisdictional tools. The third is to assess the adequacy of those jurisdictional tools. Are they appropriate: i.e., are they likely to be effective in responding to the challenge of global markets? Where there are deficiencies, how might they be remedied? The paper is presented as part of a conference that includes two main categories of participants, and it seeks to address the interests of both. One includes faculty with little experience in the area. For them, the paper includes some basic material about current jurisdictional tools, but it also sketches issues that face scholars in the area. A second group of participants is experienced even expert--in the subject matter. For them, I can only hope that the paper brings some ideas and insights that they might find valuable--or at least worthy of thinking about. An underlying theme in this analysis is that the current tools of international legislative jurisdiction are inadequate to meet the challenge of global markets. They were developed in response to economic and political circumstances that global markets have changed and are likely to continue to change. Their primary function has been to reduce the likelihood of state conflicts regarding jurisdiction, but that is no longer the only function for which jurisdictional guidance is needed. Global markets create or intensify economic and political pressures on the jurisdictional scheme, but they also create opportunities for jurisdictional law to perform new and potentially valuable functions. I look first at the basic doctrines of international jurisdictional law and how they are used. These are the tools used to determine which polities are authorized to prescribe norms for economic conduct. I then explore the development of these tools, focusing on the role of the United States in that process. This provides a basis for both understanding the operation of the principles and assessing their appropriateness. The section following identifies the challenges that global markets pose for current jurisdictional law. Finally, I offer some thoughts as to how these tools may be improved. The scope of the paper is limited by its place in the conference of which it is a part. …