Saturday, November 19, 2016

Welcome to Regulatory Geography -- An Introduction


This blog will explore how different kinds of geographies -- such as economic geographies, epistemic geographies, political geographies, etc. -- effect the regulatory capacities of states.  There is good reason to suspect that dynamics of space – i.e., geography – affect the regulatory capacity in ways that are both significant and underappreciated.  

Simply put, different regulatory strategies can be more or less effective in different kinds of spaces.   Take, for example, the regulatory strategy known as rule of law.  Rule of law seeks to impart regulatory uniformity across its regulatory space (i.e., its jurisdiction) by subjecting that space to a system of abstract rules.  Such a regulatory strategy, however, presumes that the space over which it is being applied is largely homogeneous and rationalized.  This is because the actual social impact of an abstract rule is often heavily context dependent.  A single rule can produce very divergent results when applied to different contexts – resulting in a phenomenon that Robert Merton famously termed “the law of unintended consequences”.  Thus, the more variegated and fragmented the regulatory space, the more likely that a rule-based system, such as rule of law, will generate unanticipated consequences within its regulatory space.  And this will compromise the effectiveness of rule of law as a regulatory system.

(Of course, rule-based regulatory systems often do take contextual variegation into account by formally assigning different ‘rules’ to different contexts.  But such a response is itself problematic from the perspective of rule of law.  Assigning different rules to different contexts increases the complexity of the rule-based system.   The more complex the system, the less likely that its rules will be accurately anticipated by members of the regulated community.  In other words, the more complex the system, the less transparent it will be.  And transparency is itself a core component of ‘rule of law’.  Thus, the greater the contextual variegation within the regulatory space, the more difficulty rule of law has in producing its intended consequence, either because the variegation will not be captured by the rules comprising the system; or otherwise because if it is captured by the system, it will result in a system that is so complex as to increasingly elude transparency.

Law and its related disciplines recognize rule of law’s dependence on spatial homogeneity somewhat.  But they respond to this dependence by claiming that, properly implemented, rule of law itself is able to impose the social homogeneity it needs for its effectiveness (and by extension, that where we find examples of rule of law not imposing the needed homogeneity, it is because it was not in fact properly implemented).  But here is where geography becomes relevant, because one of the key observations of geography is that certain kinds of spatial variegations can be innate to certain kinds of spaces (i.e., geographies).  And this argues that rule of law obviously always simply impose the homogeneity required for its effectiveness. 

Consider, along these lines, the particular spatial geographical phenomenon known as the core-periphery model (or ‘core-periphery ordering’).  That models shows how a particular spatial dynamic – that of transportation costs increasing in correspondence with increasing distance of travel – cause different geographies to support different kinds of industrial environments and levels of industrial development.  Some of these geographies, more notably those associated with advanced industrialization – i.e., cores – are indeed largely homogeneous or otherwise conducive to legal homogenization.  These are also the geographies in which the rule-of-law regulatory model was first identified, and where it continues to find its most effective implementation.  But for other kinds of geographies, those lesser-industrialized and lesser-developed geographies associated with ‘the periphery’, the dynamics of transportation costs results in socio-economic environments which are innately more diverse and innately less stable.  In these geographies, rule of law has much greater difficulty operating effectively, even if conscientiously implemented.  At the same time, other kinds of regulatory strategies that appear deficient or ersatz from the perspective of rule of law (such as relational governance) are likely to be more effective at promoting anticipated regulatory outcomes.

The core-peripheral ordering is but one example of how space can affect law and regulatory capacity in ways that are both important but largely unrecognized.  The possibility that rule of law is likely to be an innately ineffective regulatory strategy in many developing countries would appear to be of major importance to our understanding of law, including comparative law, law and development, transnational law, and even human rights law.  And yet, for the most part, such a possibility is has not been recognized or investigated by scholars of law or of geography.

Nor is the core-periphery model the only spatial dynamic that would seem likely to have considerable effect on local regulatory capacity.  Other such dynamics include:

  • Agglomeration effects:  Agglomeration is a spatial phenomenon in which a tight spatial concentration of related industries and disciplines generate knowledge spillovers that impart an absolute advantage to that locale in one or several related industrial sectors.   But not all local spaces support agglomeration, or are able to support the sme kinds of agglomeration.  At the same time, there is a significant similarity between agglomeration and a particular form of regulation identified by Michael Mann called ‘infrastructural power’.  Both appear deeply embedded in local society, and both are associated with advanced stages of industrial development.  Rule of law, by contrast, while also associated with advanced stages of economic development, as we saw, but at a different spatial level of application (i.e., regional rather than locale).  Might ‘infrastructural power’ represent a particular kind of agglomeration through which rule of law negotiates spatial diversity?  And if so, does this suggest another spatial variable affecting rule of law.
  • ‘Maslow geographies’:  A ‘Maslow geography’ meant to refers to a geographical phenomenon recently identified by Ronald Inglehart and Daphna Oyserman, in which geographies in different stages of economic and industrial development evinces distinct sets of political values in patterns that correspond to Abraham Maslow’s famous psychological model of ‘hierarchies of needs’.   This suggest that spatial jurisdictions – such as states – cannot always structure their constituting regulation around some appeal to a common, ‘public good’, as presumed by both liberal and republican conceptualizations of public law.  It also calls into question a foundational presumption underlying human rights law, which is that conceptualizations of ‘human dignity’ are the same everywhere.
  • 'Home bias’:  Home bias describes a psychological phenomenon in which people naturally tend to discount risk in social environment with which they feel familiar as compared to that of social environments with which they feel less familiar.  This has particular implication for geography of finance, since most international investment comes from the United States and England.  This could be an important but unrecognized factor in the ‘legal origins’ literature, which claims that the Common Law is more conducive to economic development than the Civil Law.  It also helps explain the ‘herd mentality’ that characteristic of international investors investing in Global-Southern enterprises, which would appear to argue that financial regulation in Global-Southern countries needs to operate differently from how it operates in the advanced industrial economies.
  • Geographies of capitalism:  It is now recognized that there are different varieties of capitalisms.  Many of these capitalisms evince distinctive geographies.  Some of these geographies are local, such as those defined by particular economic agglomeration effect discussed above.  Some are transnational, such as those delineated by transnational production chains; by particular factor endowments; or by flows of international finance (see, e.g., home bias effects, described above).  Some are constructed by the state and thus delineated by the space of the state itself – such as what is commonly referred to simply as the ‘national economy’ of that state.  
            A state’s national economy in particular is a critical component of that state’s constitution.  But at the same time, that economy is fragmented by these other kinds of economic geographies.  Similar to the effect of peripheral fragmentation discussed above, this capitalist fragmentation has crucial constitutional ramifications for the state.  For example, the growing autonomy of transnational capitalist geographies set out by international financial flows, international trade flows, and transnational production chains appears to be causing a particular regulatory effect that has been described as ‘the hollowing out of the state’ – a phenomenon in which regulatory capacities that formerly vested in the national state are being moved both upwards to the transnational level and downwards to more local governance structures (see, e.g., privatisation).  One of the ways that states  are responding to this is by trying to promote different kinds of agglomeration (such as, in Asia, through the creation of industrial parks)—a kind of strategy that some have termed ‘the competition state’.  Legal scholarship has begun recognizing the regulatory ‘hollowing out’ of the state, in the emerging field of ‘transnational law’, but is yet to recognize or explore the character an interaction of the new kinds of ‘regulatory geographies’ it is producing, and how these new kinds of geographies are shaping (and being shaped by) evolutions in state-generated regulatory geographies. 
  •  Topophilia:  Topophilia describes the psychological phenomenon in which people naturally tend to identify with and gain emotional attachment to the particular physical space in which they live.  At larger scales, this results in nationalism.  But it can manifest in smaller scales as well.  Topophilia can be a critical factor, both positive and negative, in the constitution of the state.  In the context of nationalism, it gives the national regulatory coherence and strength.  But when it manifest in more local identities, it disrupts national regulatory coherence and strength.  The phenomenon of topophilia would seem to have important implication for national and transnational regulatory strategies that rely on legal cosmopolitanism, forcing the state to adopt other strategies for fostering political coherence.

Of course, the above listing is not exhaustive.  And the geographical-regulatory relationships described are in fact much more complex than can be captured in this introduction.  What the above is intended to show is that there is good reason to assume that such relationships exist.  This is what I intend to explore in this blog.

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