The Ins and Outs of Transnational Private Regulatory Governance: Legitimacy, Accountability, Effectiveness and a New Concept of “Context”

The continuing proliferation of transnational private regulatory governance challenges conceptions of legal authority, legitimacy and public regulation of economic activity. The pace at which these developments occur is set by a coalescence of multiple regime changes, predominantly in commercial law areas, but also in the field of internet governance, corporate law and labor law, where the rise to prominence of private actors has become a defining feature of the emerging transnational regulatory landscape. One of the most belabored fields, the transnational law merchant or, lex mercatoria, has gained the status of a poster child, as it represents a laboratory for the exploration of “private” contractual governance in a context, in which the assertion of public or private authority has itself become contentious. The ambiguity surrounding many forms of today's contractual governance in the transnational arena echoes that of the far-reaching transformation of public regulatory governance, which has been characteristic of Western welfare states over the last few decades. What is particularly remarkable, however, is the way in which the depictions of “private instruments” and “public interests” in the post-welfare state regulatory environment have given rise to a rise in importance of social norms, self-regulation and a general anti-state affect in the assessment of judicial enforcement or administration of contractual arrangements. A central challenge resulting from case studies such as the transnational law merchant is from which perspective we ought to adequately study and assess the justifications, which are being offered for a contractual governance model, which prioritizes and seeks to insulate “private” arrangements from their embeddedness in regulated market contexts, on both the national and transnational level.