Saturday, January 28, 2017

Notes on 'the State' and the Regulation of Space

The state represents the quintessential meeting of regulation and geography.  The state was founded as a device for unifying large tracts of geography (Herz, Tilly).  And even today, it is one of the very few regulatory spaces that defines itself geographically.  As the same time, particularly since the early part of the 19th century, the state is an entity that is often said to be defined and created by law.

All this makes the state a bit of a paradox.  In seeking to unify space, the law that identifies and defines the state effectively denies the material existence of distance.  It is, in the words of Wesley Pue (1990), and “anti-geographical faith”.  But at the same time, the state is all about distance.  Distance is the state’s biggest resource – e.g., more distance means more territory means more people and tax revenue -- and at the same time its biggest threat – e.g., more distance means more territory means greater difficulty in unifying that space.

Along these lines, it might help to identify and contrast a couple of concepts.  First, we can distinguish between two different kinds of space.  One is a space in which there is internal variegation of some sort.  For convenience, we will call this ‘space’.  The other kind of space, obviously, is one in which there is no internal variegation – a space that is isotropic.  That kind of space we will call a territory. 

I also want to introduce the idea of a ‘regulatory space’.  A regulatory space delineates the entities that are subject to some kinds of regulatory regime.  A regulatory space consists of three elements.  One is the regulatory subject – what aspect of society is the regime intended to regulation; a second is regulatory purpose – what is the regime seeking to do to that particular aspect of society; and the third are regulatory boundaries – where does the regulatory authority end?  How do we determine who is subject to and who is not subject to the regulatory regime.

When the regulatory space is delineated territorially, we can – following Richard Ford – refer to it as a ‘jurisdiction’.  According to this vocabulary, a legal ‘state’ is a particular kind of jurisdiction.  Or, to be more precise, the state is a collection of jurisdictions focusing on a plethora of regulatory subjects

As noted above, the various jurisdictions that constitute a state involve a paradox: the law is innately isotropic whereas the space it regulates is frequently variegated.  Along these lines, we can distinguish between four kinds of jurisdiction, each identified by the intersection of two vectors.  The first vector involves the distinction between isotropic and variegated regulatory spaces.  The second vector involves the malleability of the regulatory space is.  A regulatory space is malleable to the extent that its regulatory subject is susceptible to regulatory manipulation, i.e., to the extent that the regulatory subject is susceptible to juridification.  On the other hand, some kinds of social practices are so deeply embedded in the social fabric that they can be highly resistant to juridification.  We will refer to this as ‘innate’ regulatory subject matter

Along these lines, we can distinguish between four kinds of jurisdictions:

Kinds of jurisdiction:


Some thoughts:
  • Regulatory jurisdictions:  National sectoral industrial activity seems particularly regulatory in nature, particularly in industrial societies.  Examples would include the national banking sector regulation; market competition regulation, national taxation systems.
  •  Synthetic jurisdictions:  Synthetic jurisdictions are most often located in a particular time, as their amenability to juridification means that they will often evolve into regulatory jurisdiction.  The jurisdiction created by interstate transportation regulation in the United States during the late 19th and early 20th century turned out to be synthetic, it started out being variegated, but by the 1920s had become regulatory. 
  • Organic jurisdictions:  A municipality is generally a much more organic jurisdiction than is the state.  This is reflected in the different way in which states regulate municipality, what Michael Mann called infrastructural regulation as contracted again ‘rule-of-law’ regulation (what he called ‘despotic’ regulation).
  • Pluralist jurisdictions:  While national industrial sectors are largely regulatory in character, the national economy itself is invariable pluralist.  Many areas of national social regulation is also pluralist. 

As a form of regulation, law presumes that its jurisdiction is regulatory – i.e., that it is isotropic, since the law is innately isotropic, and that it is malleable, because the whole regulatory purpose of law is to change some aspect of its regulatory subject.    But where the jurisdiction is not isotropic and / or not malleable – what we will call ‘problematic’ jurisdictions, its provokes what Gunther Teubner famously termed a regulatory trilemma – a divergence between the social conditions presumed by the regulation and the social conditions that are actually manifest in the social space being regulated.  To recall, there are three possible responses to such a condition, each with a distinct set of problems.  One is juridification, where the actual social change to fit the presumptions of the law, a response that threatens the vitality of the society; the second is socialization, which is where the regulatory system adjusts to social reality, a response that threatens the integrity of the law; and the third is mutual indifference, a condition where the regulatory system and the social system simply ignore each other.

Each one of these possible responses corresponds with a different one of the problematic jurisdictions.  Thus, when confronting a regulatory trilemma, synthetic jurisdictions are most likely to become juridified and organic jurisdictions are most likely to experience a socialization of the regulatory system.  Pluralist jurisdictions will experience ‘unintended consequences’, as the legal system will produce different results in different spaces.
It should be noted, however, that these jurisdictional attributes can vary from state to state, and even within a state they can change over time.  In particular, the process of industrialization seems to convert many economic-regulatory jurisdictions that are pluralist in pre-industrial societies into regulatory jurisdictions as industrialization progresses.  An example of this is found in the rise of the (centralized) ‘regulatory state’ in late 19th and early 20th century US.  At the same time, Karl Polanyi’s notion of a ‘double movement’ suggests that the opposite is likely to be true as well.  Thus, at the same time as the US was experiencing the raise of the regulatory state, it was also experiencing the rise of a national, but pluralized, civil society (see, e.g., the rise of labor unions), and the emergence of new pluralist forms of governance that Michael Mann has termed ‘infrastructural power’ – two kinds of regulatory spaces that for the most part do not exist in lesser-industrialized states.

 From the perspective of the state, the quintessential regulatory problem lies in how to regulated the state as a whole given the wide diversity of problematic jurisdictions it is likely to encompass.  As a general observation, we can hypothesize that each kind of problematic jurisdiction is likely to provoke a distinct regulatory strategy:  organic jurisdiction are likely to be regulated through the use of intrastructural power; synthetic jurisdictions are likely to be regulated through juridification; and pluralist jurisdictions are likely to be regulated through a combination of decentralization, on the one hand, and what I elsewhere have termed ‘political regulation’ on the other.

Monday, January 23, 2017

Law, Capitalism(s) and space

One of the areas in which the intersection of law and space has been relatively well explored is in that of varieties of capitalism.  Below are my study notes for this particular class in my law and geography course.

Notes on geographic-regulatory implications of varieties of capitalism and variegated capitalism

The state is often thought of in terms of political jurisdictions.  But the territory of the state is not simply political, it is also in significant ways ‘economic’.  Particularly since the coming of the industrial revolution in the 19th century, states have been able to delineate themselves economically as well as political.  Perhaps the first example of this is found in the United States, which devoted at least two constitutional provisions – the commerce clause and the contract clause – specifically to the need to unite the full territory of the country into a common market. 

Today, national economic space is most commonly thought of as coming in three possible flavours.  These are ‘liberal market economies’, ‘coordinated market economies’, and ‘state capitalism’.  The difference lies in the relationship between the state and its national market.  In liberal market economies, the state uses markets solely for the generation of wealth – questions of redistribution and spending on public goods is solely for the state using public revenue.  In coordinated market economies, states enlist markets to help the state realize social welfare goals (such as through providing full employment).  In state-capitalist economies, such as that of the People’s Republic of China, the state also uses the capitalist economy to promote state interests.

A state’s choice of its kind of capitalism is primarily historical and political, but it has real regulatory consequences, which we will (obviously) be exploring.  In the first reading, we look at how the industrialization of the national economy give state access to a much wider diversity of regulatory instruments than are enjoys by lesser industrialized countries.  In the second reading, my Mark Roe, we explore how liberal market economies and coordinated market economies have different regulatory needs, particularly in the area of corporate governance.  In the next reading, we see that the homogeneity of national economies is somewhat illusory, and explore how the phenomenon of variegated capitalism – i.e, when one national economy actually evinces a number of different kinds of capitalisms – has important implications for how markets need to be regulated, implications that are not widely recognized in the Anglophone literature on market regulation in particular.  Finally, there is a short introduction to Karl Polanyi’s classic notion of the double movement, a phenomenon through which societies naturally seek to protect themselves from the social damage caused by capitalist marketization.  This is particularly relevant to the third and fourth questions listed below.

The fifth, optional reading just a summary over view the main ways that states have historically sought to structure their national economies.  We’ll talk more about this in class.  The sixth reading, also optional, explores how the difference between a liberal market economy and a coordinated market economy impact consumer protection regulation.

* * *

1. Dowdle, Michael W. "Public accountability in alien terrain." in M.Dowdle, ed., Public Accountability: Designs, Dilemmas and Experiences (CUP 2006): 329-357.

2.  Roe, Mark J. "Political preconditions to separating ownership from corporate control." Stanford Law Review (2000): 539-606.

3. Dowdle, Michael W. "On the Innately Political Character of Market Regulation," Revista Direito e Práxis, Vol. 07, N. 16, 2016, p. 416-446.

4.  Notes explaining Polanyi's double movement

5.  Noted on 'economic constitutionalism'

6.   Teubner, Gunther. "Legal Irritants: Good Faith in British Law, or How Unifying Law Ends up in New Divergences." The Modern Law Review 61.1 (1998): 11-32.

* * *

In reading through these materials, think about the following:
  1. Is capitalism, as a regulatory phenomenon, more in the form of a synthetic or organic jurisdiction (and why is this question important)?  OR are some more synthetic or more organic (particularly in the context of the different kinds of capitalisms that constitute variegated capitalism).  What factors impact on this question?

  2. Particularly with regards to the third reading on variegated capitalism, what types of regulatory instruments are associated with what kinds of capitalisms.  Notice in particular, the strong structural correspondence between rule of law and industrialization.  What happens when the regulatory instrument that is being used to regulate some particular form of capitalism is not suited for that particular form?  Legalization, socialization, mutual indifference?  What factors would push the system to one or the other of these corners?

  3. Note that in fact, legalization is often the preferred and even intended consequent of regulation.  We often pass laws hoping that they will cause the regulatory environment to adjust to their vision of the world.  I think this is especially true in the area of economic regulation, particularly as it is promoted in developing countries by the ‘law and development’ movement.  What are some of the unintended consequences (both economic and social) of the ‘if you build it they will come’ approach to this strategy for economic development?

  4. With regards to the third question, think about this specifically in the context of Polanyi’s notion of the double movement.  Polanyi’s notion argues that liberal marketization along the line of a liberal market economy will spontaneously provoke a counter-movement with regards to some other part of society that seek maintain the social solidarity that is disrupted by making key materials of social life subject to impersonal (and therefore asocial) market forces.  As you are looking at the different kinds of capitalisms, try to identify their social components, and think about how regulatory ‘colonization’ of that market might provoke counter-movements elsewhere in society, and would this be desirable?

  5. The final reading also suggests that we might be able to regulate this double-movement through what it calls ‘political regulation’ (alternatively, it could be read as suggesting that political regulation is itself a kind of countermovement).

Saturday, November 19, 2016

Welcome to Regulatory Geography -- An Introduction


This blog will explore how different kinds of geographies -- such as economic geographies, epistemic geographies, political geographies, etc. -- effect the regulatory capacities of states.  There is good reason to suspect that dynamics of space – i.e., geography – affect the regulatory capacity in ways that are both significant and underappreciated.  

Simply put, different regulatory strategies can be more or less effective in different kinds of spaces.   Take, for example, the regulatory strategy known as rule of law.  Rule of law seeks to impart regulatory uniformity across its regulatory space (i.e., its jurisdiction) by subjecting that space to a system of abstract rules.  Such a regulatory strategy, however, presumes that the space over which it is being applied is largely homogeneous and rationalized.  This is because the actual social impact of an abstract rule is often heavily context dependent.  A single rule can produce very divergent results when applied to different contexts – resulting in a phenomenon that Robert Merton famously termed “the law of unintended consequences”.  Thus, the more variegated and fragmented the regulatory space, the more likely that a rule-based system, such as rule of law, will generate unanticipated consequences within its regulatory space.  And this will compromise the effectiveness of rule of law as a regulatory system.

(Of course, rule-based regulatory systems often do take contextual variegation into account by formally assigning different ‘rules’ to different contexts.  But such a response is itself problematic from the perspective of rule of law.  Assigning different rules to different contexts increases the complexity of the rule-based system.   The more complex the system, the less likely that its rules will be accurately anticipated by members of the regulated community.  In other words, the more complex the system, the less transparent it will be.  And transparency is itself a core component of ‘rule of law’.  Thus, the greater the contextual variegation within the regulatory space, the more difficulty rule of law has in producing its intended consequence, either because the variegation will not be captured by the rules comprising the system; or otherwise because if it is captured by the system, it will result in a system that is so complex as to increasingly elude transparency.

Law and its related disciplines recognize rule of law’s dependence on spatial homogeneity somewhat.  But they respond to this dependence by claiming that, properly implemented, rule of law itself is able to impose the social homogeneity it needs for its effectiveness (and by extension, that where we find examples of rule of law not imposing the needed homogeneity, it is because it was not in fact properly implemented).  But here is where geography becomes relevant, because one of the key observations of geography is that certain kinds of spatial variegations can be innate to certain kinds of spaces (i.e., geographies).  And this argues that rule of law obviously always simply impose the homogeneity required for its effectiveness. 

Consider, along these lines, the particular spatial geographical phenomenon known as the core-periphery model (or ‘core-periphery ordering’).  That models shows how a particular spatial dynamic – that of transportation costs increasing in correspondence with increasing distance of travel – cause different geographies to support different kinds of industrial environments and levels of industrial development.  Some of these geographies, more notably those associated with advanced industrialization – i.e., cores – are indeed largely homogeneous or otherwise conducive to legal homogenization.  These are also the geographies in which the rule-of-law regulatory model was first identified, and where it continues to find its most effective implementation.  But for other kinds of geographies, those lesser-industrialized and lesser-developed geographies associated with ‘the periphery’, the dynamics of transportation costs results in socio-economic environments which are innately more diverse and innately less stable.  In these geographies, rule of law has much greater difficulty operating effectively, even if conscientiously implemented.  At the same time, other kinds of regulatory strategies that appear deficient or ersatz from the perspective of rule of law (such as relational governance) are likely to be more effective at promoting anticipated regulatory outcomes.

The core-peripheral ordering is but one example of how space can affect law and regulatory capacity in ways that are both important but largely unrecognized.  The possibility that rule of law is likely to be an innately ineffective regulatory strategy in many developing countries would appear to be of major importance to our understanding of law, including comparative law, law and development, transnational law, and even human rights law.  And yet, for the most part, such a possibility is has not been recognized or investigated by scholars of law or of geography.

Nor is the core-periphery model the only spatial dynamic that would seem likely to have considerable effect on local regulatory capacity.  Other such dynamics include:

  • Agglomeration effects:  Agglomeration is a spatial phenomenon in which a tight spatial concentration of related industries and disciplines generate knowledge spillovers that impart an absolute advantage to that locale in one or several related industrial sectors.   But not all local spaces support agglomeration, or are able to support the sme kinds of agglomeration.  At the same time, there is a significant similarity between agglomeration and a particular form of regulation identified by Michael Mann called ‘infrastructural power’.  Both appear deeply embedded in local society, and both are associated with advanced stages of industrial development.  Rule of law, by contrast, while also associated with advanced stages of economic development, as we saw, but at a different spatial level of application (i.e., regional rather than locale).  Might ‘infrastructural power’ represent a particular kind of agglomeration through which rule of law negotiates spatial diversity?  And if so, does this suggest another spatial variable affecting rule of law.
  • ‘Maslow geographies’:  A ‘Maslow geography’ meant to refers to a geographical phenomenon recently identified by Ronald Inglehart and Daphna Oyserman, in which geographies in different stages of economic and industrial development evinces distinct sets of political values in patterns that correspond to Abraham Maslow’s famous psychological model of ‘hierarchies of needs’.   This suggest that spatial jurisdictions – such as states – cannot always structure their constituting regulation around some appeal to a common, ‘public good’, as presumed by both liberal and republican conceptualizations of public law.  It also calls into question a foundational presumption underlying human rights law, which is that conceptualizations of ‘human dignity’ are the same everywhere.
  • 'Home bias’:  Home bias describes a psychological phenomenon in which people naturally tend to discount risk in social environment with which they feel familiar as compared to that of social environments with which they feel less familiar.  This has particular implication for geography of finance, since most international investment comes from the United States and England.  This could be an important but unrecognized factor in the ‘legal origins’ literature, which claims that the Common Law is more conducive to economic development than the Civil Law.  It also helps explain the ‘herd mentality’ that characteristic of international investors investing in Global-Southern enterprises, which would appear to argue that financial regulation in Global-Southern countries needs to operate differently from how it operates in the advanced industrial economies.
  • Geographies of capitalism:  It is now recognized that there are different varieties of capitalisms.  Many of these capitalisms evince distinctive geographies.  Some of these geographies are local, such as those defined by particular economic agglomeration effect discussed above.  Some are transnational, such as those delineated by transnational production chains; by particular factor endowments; or by flows of international finance (see, e.g., home bias effects, described above).  Some are constructed by the state and thus delineated by the space of the state itself – such as what is commonly referred to simply as the ‘national economy’ of that state.  
            A state’s national economy in particular is a critical component of that state’s constitution.  But at the same time, that economy is fragmented by these other kinds of economic geographies.  Similar to the effect of peripheral fragmentation discussed above, this capitalist fragmentation has crucial constitutional ramifications for the state.  For example, the growing autonomy of transnational capitalist geographies set out by international financial flows, international trade flows, and transnational production chains appears to be causing a particular regulatory effect that has been described as ‘the hollowing out of the state’ – a phenomenon in which regulatory capacities that formerly vested in the national state are being moved both upwards to the transnational level and downwards to more local governance structures (see, e.g., privatisation).  One of the ways that states  are responding to this is by trying to promote different kinds of agglomeration (such as, in Asia, through the creation of industrial parks)—a kind of strategy that some have termed ‘the competition state’.  Legal scholarship has begun recognizing the regulatory ‘hollowing out’ of the state, in the emerging field of ‘transnational law’, but is yet to recognize or explore the character an interaction of the new kinds of ‘regulatory geographies’ it is producing, and how these new kinds of geographies are shaping (and being shaped by) evolutions in state-generated regulatory geographies. 
  •  Topophilia:  Topophilia describes the psychological phenomenon in which people naturally tend to identify with and gain emotional attachment to the particular physical space in which they live.  At larger scales, this results in nationalism.  But it can manifest in smaller scales as well.  Topophilia can be a critical factor, both positive and negative, in the constitution of the state.  In the context of nationalism, it gives the national regulatory coherence and strength.  But when it manifest in more local identities, it disrupts national regulatory coherence and strength.  The phenomenon of topophilia would seem to have important implication for national and transnational regulatory strategies that rely on legal cosmopolitanism, forcing the state to adopt other strategies for fostering political coherence.

Of course, the above listing is not exhaustive.  And the geographical-regulatory relationships described are in fact much more complex than can be captured in this introduction.  What the above is intended to show is that there is good reason to assume that such relationships exist.  This is what I intend to explore in this blog.