The New Politics of Interdependence

Abstract

How are regulatory disputes between the major powers resolved? Existing literature generally characterizes such regulatory disagreements as system clash, in which national systems of regulation come into conflict, so that one sets the global standard, and the other adjusts or is marginalized. In this article, we offer an alternative account, which bridges early literature on interdependence with work from Historical Institutionalism in comparative politics. We argue that rule overlap creates opportunities for regulatory actors to develop transnational alliances in support of an alternative institutional agenda. Over time, the resulting “cross-national layers” have the potential to transform domestic institutions and in turn global rules. International regulatory disputes are less discrete international conflicts between sovereign jurisdictions than ongoing battles among regulatory actors within jurisdictions (and alliances across them). We examine two critical issue areas—surveillance information sharing and accounting standards—which allow us to contrast our argument against standard accounts emphasizing veto points and switching costs, respectively.