ABSTRACT
One of the prime activities of governments is to make and enforce the rules by which we live. In the realm of commerce, these rules are critical to the effective operation of the market. The problem is that the system of rule-making we have is divided among separate sovereign states. The rules have force within the domestic sphere, but have no relevance or authority over transnational or global issues that transcend national borders. Despite this lack of global governance, economic activity today operates at an international level which increases the demands by economic actors for a global framework for commerce. If governments cannot develop transnational institutions for rule-making, then new forms of international governance must be created. Typically we think of international governance as what emerges from state-to-state negotiations over international law and regulation, embodied in international organisations such as the United Nations. These laws, regulations, and institutions are not always effective, and do not cover all areas of international life. The demand for rules to govern commerce has given rise to a variety of sources of supply, and one of the most significant and growing sources of international governance is the private sector itself. We see emerging in many sectors and issues a set of international regimes that overlaps with and sometimes substitutes for the regimes established by governments.
