ABSTRACT
The literature on private actors in transnational politics, reassessed by Graz and Nölke in the opening chapter of this volume, has identified many important factors determining the scope and form of their influence. This chapter argues that in the field of regulation, a crucial one has been largely ignored: the pattern of inter-firm competition. It claims that it is central to explaining why transnational private regulation is sometimes effected through private institutions, and sometimes through public ones. The reasoning is as follows: in principle, producers of goods and services prefer self-regulation to rule setting through a public body. Thus, they avoid interference by other stakeholders and can tame competition. This should also apply transnationally. However, producers may call on ‘the state’ to intervene when other firms use transnational private regulation to the formers’ competitive disadvantage. The result is a relocation of regulation to the public domain. Rule setting becomes a matter of inter-state politics. Dominant producers, according to the hypothesis, support transnational private regulation unless it threatens their competitive positions.
