Beyond Transplant: A Network Innovation Model of Transnational Regulatory Change

Abstract

Abstract Seeking inspiration from different legal systems in order to solve common policy problems is a core enterprise of comparative law. However, dominant understandings in comparative law and regulatory theory about how norms, rules, and formal institutions move across borders are increasingly inadequate in the face of modern transnational policy challenges. Solving transnational problems requires regulatory innovation, complex coordination, and even competition among private and public actors in multiple jurisdictions, as well as much faster policy responses than most countries can achieve either domestically or multilaterally. Accelerating solutions to emerging transnational problems therefore demands a new focus within comparative law on how transnational legal innovation works and how to leverage its benefits faster on both a global and local scale. This Article proposes a conceptual framework to ground this effort—a “network innovation” model of transnational law formation. Building on earlier literatures on legal transplant, policy diffusion, institutional change, and transnational legal ordering, as well as studies of firm-level innovation, this approach recognizes that new norms, rules, and other institutions are sourced from, coordinated by, and transmitted through transnational networks of public and private actors. Moving beyond prior literatures, however, it views transnational law formation as an aggregating process of innovation where the resulting outputs are the complex product of multiple experimental sites and sources. This approach offers a more accurate descriptive account of transnational regulatory change and points to network innovation processes as central to solving common or collective transnational problems. This Article illustrates the proposed framework with case studies of efforts to build sustainable financial systems. It concludes by suggesting strategies to accelerate network innovation and considering how this theoretical paradigm might inform new directions in comparative law.