The coherence of multilateral regulation.

• Author: Feaver, Donald

Abstract

The multilateral system of international institutions established at the end of World War II was created to function as intergovernmental for a within which nation states, using diplomatic means, could communicate, cooperate and coordinate responses to global issues and crises. Since then, even though the structure of multilateral system has retained its institutional focus, the primary function of many of those institutions has changed. Rather than performing the predominantly organisational function of facilitating diplomatic exchange, the multilateral system is now comprised of a network of institutions that also administer a growing inventory of international regulatory arrangements. The objective of this article is to examine the regulatory coherence of multilateral regulatory arrangements in light of the gradual systemic shift from intergovernmental to regulatory multilateralism.

Introduction

While much scholarly attention has been directed towards the transformation in domestic governance arrangements that has been occurring in many industrialised countries over the past several decades, (1) a related transformation that has been taking place at a much broader level seems to have gone somewhat unnoticed. At the same time national governments have been transferring increasing administrative decision-making responsibilities to domestic regulatory agencies, they have also been transferring increasing regulatory responsibilities to an array of multilateral institutions. However, it is not the creation of new, or expansion of existing multilateral institutions that has gone unnoticed. It is the gradual, functional, transition from intergovernmental to regulatory multilateralism that has largely escaped attention. (2)

The multilateral system of international institutions was established towards the end of World War II. These institutions were created to function as intergovernmental fora within which nation states, using diplomatic means, could, communicate, cooperate and coordinate responses to global issues and crises. (3) Since then, even though the structure of a multilateral system has retained its institutional focus, the primary function of the multilateral institutions has changed. Rather than performing the predominantly organisational function of facilitating diplomatic exchange, the multilateral system is now comprised of a network of institutions that administer a growing inventory of international regulatory arrangements. (4) This shift towards a regulatory function performed by the multilateral institutions is called, for the purposes of this article, regulatory multilateralism.

Regulatory multilateralism differs from intergovernmental multilateralism in several ways. (5) Intergovernmental cooperation through diplomatic processes is suited to dealing with specific issues and crises. However, a growing number of international issues have emerged requiring ongoing administration of commitments made between nation states. These commitments are governed by prescriptive, rules-based, codes of conduct. International agreements that create rights and obligations of a regulatory nature are more complex than intergovernmental agreements and diplomatic accords between nation states. International regulatory agreements often require the creation of institutional structures, the formation of substantive rules and processes and administrative mechanisms to monitor and enforce the more elaborate arrangements. Finally, international regulatory agreements require an upward delegation of sovereign power from nation states to a multilateral organisation empowering it to administer a regulatory scheme. (6)

The transition from intergovernmental to regulatory multilateralism coincides with increasing demands upon the international community to respond to a range of issues flowing from the deepening economic, social and political connectedness of nation states. (7) Globalisation is dramatically altering the social context contributing to the transition to regulatory multilateralism; however, the absence of any corresponding structural reform of the multilateral system is creating fundamental incoherencies in the composition and administration of multilateral regulatory arrangements. The growing divergence between the structure and function of the multilateral institutions sits at the core of two questions that are examined in this article. First, in light of the transition to regulatory multilateralism, the question arises how the absence of structural reform of the multilateral system is impacting upon the systemic coherence of multilateral regulatory arrangements? Second, how is the transition to regulatory multilateralism affecting the instrumental coberence of multilateral regulatory arrangements?

These questions are considered in four steps. First, in Section 1 the notion of regulatory coherence is introduced and its relevance as an underlying theme of the article is described. In Section 2, a conceptual framework is presented that identifies important factors and relationships that comprise the international regulatory process that are considered in more detail in subsequent sections of the article. In Section 3, issues affecting the systemic coherence of multilateral regulatory arrangements are considered. In Section 4, consideration of instrumental coherence is undertaken by analysing the World Trade Organisation (WTO). A discussion and summary of the relationship between coherence issues and how they may contribute to current tensions affecting regulatory multilateralism are presented by way of a conclusion.

1. Legal Theories of Coherence and Multilateral Regulation

   Several different analytical approaches examine the question of legal coherence, and its relevance, from a different analytical dimension. (8) The feature common to all approaches is their broad agreement on the same general principle: to have and maintain coherence and integrity; the purpose of law, the structure and function of legal systems and the integrity of legal processes all must exhibit some degree of consistency and coherence. In a mechanistic sense, coherence can be described as an organising principle that exhibits certain properties. The basic properties it exhibits emerge when it is used to evaluate the characteristics of linkages among and between abstract concepts. If a linkage of concepts or ideas is not coherent, the outcome will be cognitive friction and conceptual instability. (9) This may be described as an incoherent outcome. If the linkage of ideas exhibits a more logical and functional interoperability among inter-related concepts, it is probable that more stable, predictable and consistent outcomes will be achieved. Coherence, in brief, describes qualitative patterns in the arrangement of abstract ideas.

   When applied to the analysis of regulation and regulatory schemes, coherence theory is closely related to the concept of regulatory failure. Although there is little agreement in the literature as to what exactly regulatory failure is or how it can be objectively recognised or explained, (10) Breyer's classical legal definition of regulatory failure provides a useful starting, principle, Breyer's definition states that regulatory schemes fail when regulatory instruments are mismatched to the context in which they are applied. (11) Although broad, the definition implicitly identifies the requirement for consistency between the social problem underlying the need for a regulatory solution and the choice of regulatory machinery implemented to address that problem.

   To satisfy coherence requirements, a regulatory arrangement should exhibit three levels of regulatory coherence: systemic coherence, policy coherence and instrumental coherence. Systemic coherence is an actual or ideal feature of a regulatory arrangement where its components fit together: either all of them (global systemic coherence) or some of them (local systemic coherence). Figure 1 illustrates how a regulatory arrangement is systemically coherent where the underlying social need for regulation and the normative policy foundations formulated to address that need are theoretically in alignment. In making the conceptual linkage between social need and normative policy, systemic coherence implies a requirement for a logical connection between the motivation for regulating (foundationalist approach) and the theoretical concepts that shapes a regulatory order (non-foundationalist approach). (12) This notion of a systemic coherence is also reflected in the constructivist ideal that regulatory institutions and rules are abstract social constructs created to serve the needs of a social order (or relevant suborders) in accordance with a particular social context. As the needs of societies and communities change, so too should the regulatory institutions and instruments that govern them. (13) Regulatory policies that do not evolve and regulatory instruments that are not reformed to reflect systemic change will eventually fail in their regulatory objectives. (14)

   The next level of regulatory coherence identified in Figure 1 is the requirement for alignment between the normative policy foundations and positive rules referred to as policy coherence. Policy coherence encompasses an internal and external dimension. Internal coherence is determined by whether the normative policy foundations are in alignment with policy choices embodied in the positive legal instruments formalising the regulatory architecture. External coherence, also known as comparative coherence, has two sub-dimensions: within category and across category coherence. (15) Within category coherence is defined as regulation that is consistent with other regulations of the same general type. Regulations are coherent across category where the overall pattern of regulations makes sense across different regulatory categories. Policy coherence is not examined in this article because no...