Regulation and Policy

Theme Overview

This theme brings together projects that analyze the rules that govern international economic activity and actor preferences over them. 

Affiliated Current and Recent Projects

Governing the Digital Economy

How Many Lawyers Does It Take to Turn on a Lightbulb? Innovation, Antitrust/Competition Law, and Judicial Independence - Carly Potz-Nielsen with Tim Büthe and Cindy Cheng (Technical University of Munich, HfP) 

Increased innovation is one of the key hoped-for benefits of market competition. However, most existing research on the relationship between competition and innovation, largely in economics, does not consider politics and policies intended to foster market competition, most prominently antitrust law, its enforcement, and related public policies ("competition policy"). In this paper, we identify four ways in which competition policy might foster innovation – even if it might fail to increase market competition. We argue, however, that the effectiveness of such a highly legalized public policy should depend upon (the threat of) meritocratic enforcement and thus on the quality of judicial institutions. Using an original panel dataset, which allows us for the first time to examine such a conditional effect of antitrust laws on innovation across many countries and several decades, we show that competition policy indeed can boost innovation, both across and within countries, but that this effect is conditional on the level of judicial independence: In countries with a high level of judicial independence, the adoption of antitrust laws strongly boosts innovation, whereas in countries with low judicial independence, the introduction of such laws has no effect or even slightly dampens innovation.

This project has most recently been presented at:

• The Swiss Political Science Association (SPSA) Annual Congress (Mar 2024)

• The American Political Science Association (APSA) Annual Meeting (Aug 2023) 

• The Politics of Finance Workshop; Burghausen, Germany (July 2023)

   

This project is led by the International Relations Chair in the Hochschule für Politik at the Technical University of Munich.  

Choosing Capital Controls: Constituent Preferences over Restricting Financial Flows - Carly Potz-Nielsen 

Individuals that have lost jobs or experienced changes in their cost of living often blame governments for allowing international flows of goods, services, people, and money to overwhelm domestic markets. However, the expansion of markets beyond national borders makes them hard to limit; the ease with which these international flows move through a country means that governments may not be able to control them. The question at the center of this project is how much governments actually have a choice in opening their market to these different international flows. It considers one specific group of policies that governments can use to restrict the flow of investment or money through a country: capital controls. This project makes finds that there is evidence that constituents have distinct preferences over how governments restrict the flow of money and investment. And, that these preferences inform the way governments choose to target these flows in addition to whether they target them. This suggests that the use of capital controls is not simply driven by the norm of unrestricted markets pushed by international businesses and institutions alike. Governments are instead choosing carefully when and how to limit their markets, which means that they are able to influence who wins or loses in the context of the global market.

Parts of this project have been most recently presented at: 

• The European Political Science Association (SPSA) Annual Meeting (July 2024)