Andy Spalding the visiting assistant professor, Chicago-Kent College of Law writes to the China Law List..
I would invite comments on my paper, “The Irony of International Business Law:? U.S. Progressivism, China’s New Laissez Faire, and their Impact in the Developing World,” which has been accepted for publication in the UCLA Law Review.?
I argue that although the two nations are in fact distinguishable by the extent to which national or federal law restricts corporate profit-seeking to advance social and political goals, in the international business realm the roles have become reversed. In discrete but important respects, China’s regime of international business law is now comparatively laissez faire, while the U.S. model, owing to its roots in the Progressive Era, deliberately curtails economic freedom to advance various national political goals.? The conventional dichotomy between the Washington Consensus and the Beijing Consensus utterly fails to capture this ironic development.? I further argue that because of the rise of China’s laissez faire model, U.S. enforcement of its progressive regime in developing countries now tends to create the very conditions in which corruption and human rights violations proliferate.
The section on China, at pages 38-48, is relatively brief and would benefit greatly from the thoughtful review of any members of this list serve who think about international business law.? Kindly send comments directly to aspalding@kentlaw.edu.? The paper is currently found at ?http://ssrn.com/abstract=1795563.
The abstract is below.
ABSTRACT:
As the financial crisis draws U.S. business overseas and developing countries rise in influence, the regulation of international business has never figured so prominently in federal law. ?But the dominant paradigm through which academics and policymakers continue to view that law ? the so-called ?Washington Consensus? ? proves deeply misleading. ??A more accurate account of the components, origins, and aims of U.S. international business law reveals two striking ironies. ?
First, in discrete but critical ways, the U.S. no longer represents the comparatively laissez-faire approach to federal business regulation. ?Rather, owing to its origins in the Progressive Era, U.S. federal law directs corporations toward non-economic social goals, particularly combating corruption (e.g. the Foreign Corrupt Practices Act) and promoting human rights (e.g. the Alien Tort Statute or economic sanctions). By contrast, the alternative legal regime to which the U.S. is frequently compared ? China ? largely allows companies to pursue profits internationally without regard to their impact on corruption and human rights. ?Though it remains true that the U.S. regime and its principal alternative are distinguished by the extent to which the state restricts business conduct to achieve social goals, the roles are now reversed. ?
Second, the rise of an alternative model now substantially thwarts the goals of U.S. progressive regulation. ?Empirical research in political science and economics demonstrates that because the U.S. regime increases the costs of doing business in emerging markets, U.S. companies tend to invest less. ?The resulting void in capital is filled by companies from countries ? particularly China ? that lack prohibitions on bribery and human rights violations. ?Ironically, enforcement of U.S. progressivism thus creates the very conditions in which corruption and human rights violations occur.