The role of law in governing regionalism in Asia
Good governance is essential to facilitate international economic activity. Over the last three decades, in particular, there has been a movement internationally to more of a rules-based framework to regulate international economic relations (rules-based governance), rather than relying on arrangements based on the personal relations of the actors (relations-based governance). In the course of economic growth and expansion of trade and investment, as an actor needs to work with less-familiar partners, there is a need for a shift away from relations-based and toward rules-based governance, so as to provide greater transparency and conﬁdence. International law plays an important function in rules-based governance.
In the economic realm, international law provides the framework for regulating economic activity among the members of the international community and provides the international legal framework for rules-based governance. Laws and a legal system are important for economic development.1 As Rajenthran has observed, ‘increasingly, empirical evidence proves that eﬃcient law and legal institutions promote and sustain economic activities. To this end, both create an ascertainable “structure of expectations”’.2