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Transgovernmental Networks and Domestic Policy Convergence: Evidence from Insider Trading Regulation

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  • Bach, David
  • Newman, Abraham L.

Abstract

Cross-border cooperation among domestic regulators and public officials has become a defining feature of global governance. While a number of studies have tracked the emergence and institutionalization of such transgovernmental networks, less is known about their effect on domestic policy. This study explores this link for the important case of insider-trading regulation in original data for 116 countries between 1977 and 2006. It offers quantitative evidence that transgovernmental cooperation is related to domestic policy convergence but that the relationship is more complex than often assumed. Direct ties to powerful regulators increases a jurisdiction's likelihood of adopting internationally promoted policies such as insider-trading rules. Separately, membership in the International Organization of Securities Commissions (IOSCO), a forum designed to diffuse best practices among regulators, increases a jurisdiction's likelihood of subsequently enforcing newly adopted policies. The findings in this study suggest that different network components are associated with distinct aspects of domestic policy convergence. The results are directly relevant for current public policy debates about the reregulation of global financial markets as transgovernmental networks among domestic regulators have assumed a critical role.

Suggested Citation

  • Bach, David & Newman, Abraham L., 2010. "Transgovernmental Networks and Domestic Policy Convergence: Evidence from Insider Trading Regulation," International Organization, Cambridge University Press, vol. 64(3), pages 505-528, July.
    • Handle: RePEc:cup:intorg:v:64:y:2010:i:03:p:505-528_00
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    Cited by:

    1. Manuela Moschella & Eleni Tsingou, 2013. "Regulating finance after the crisis: Unveiling the different dynamics of the regulatory process," Regulation & Governance, John Wiley & Sons, vol. 7(4), pages 407-416, December.
    2. Jean-Frédéric Morin & Richard E. Gold, 2014. "An Integrated Model of Legal Transplantation: The Diffusion of Intellectual Property Law in Developing Countries," ULB Institutional Repository 2013/149496, ULB -- Universite Libre de Bruxelles.
    3. Machiel van der Heijden, 2021. "Agencies without borders: Explaining partner selection in the formation of transnational agreements between regulators," Regulation & Governance, John Wiley & Sons, vol. 15(3), pages 725-744, July.
    4. Gorwa, Robert, 2024. "The Politics of Platform Regulation: How Governments Shape Online Content Moderation," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 299876, September.
    5. Kostas Kourtikakis & Ekaterina Turkina & Evgeny Postnikov, 2021. "The Structure of Coordination: Transatlantic Policy Networks and the Mobilization of Business and Civil Society," Journal of Common Market Studies, Wiley Blackwell, vol. 59(3), pages 679-696, May.
    6. Oliver Westerwinter & Kenneth W. Abbott & Thomas Biersteker, 2021. "Informal governance in world politics," The Review of International Organizations, Springer, vol. 16(1), pages 1-27, January.
    7. Kirsten Rodine-Hardy, 2016. "Nanotechnology and Global Environmental Politics: Transatlantic Divergence," Global Environmental Politics, MIT Press, vol. 16(3), pages 89-105, August.
    8. Sandra Lavenex & Flavia Jurje, 2021. "Opening‐up labor mobility? Rising powers' rulemaking in trade agreements," Regulation & Governance, John Wiley & Sons, vol. 15(3), pages 598-615, July.
    9. Asif Efrat, 2015. "Do human rights violations hinder counterterrorism cooperation? Evidence from the FBI’s deployment abroad," The Review of International Organizations, Springer, vol. 10(3), pages 329-349, September.
    10. N. Nuruzzaman & Ajai Gaur & Rakesh B. Sambharya, 2022. "WTO accession and firm exports in developing economies," Journal of International Business Policy, Palgrave Macmillan, vol. 5(4), pages 444-466, December.
    11. Merl, Robert & Palan, Stefan & Schmidt, Dominik & Stöckl, Thomas, 2023. "Insider trading regulation and trader migration," Journal of Financial Markets, Elsevier, vol. 66(C).
    12. Dominik Schmidt & Thomas Stöckl & Stefan Palan, 2024. "Voting for insider trading regulation. An experimental study of informed and uninformed traders’ preferences," Post-Print hal-04692482, HAL.
    13. Asif Efrat & Abraham L. Newman, 2018. "Divulging data: Domestic determinants of international information sharing," The Review of International Organizations, Springer, vol. 13(3), pages 395-419, September.
    14. Reini Schrama & Dorte Sindbjerg Martinsen & Ellen Mastenbroek, 2020. "Going Nordic in European Administrative Networks?," Politics and Governance, Cogitatio Press, vol. 8(4), pages 65-77.
    15. Jacint Jordana, 2017. "Transgovernmental Networks as Regulatory Intermediaries," The ANNALS of the American Academy of Political and Social Science, , vol. 670(1), pages 245-262, March.
    16. Charles B. Roger & Sam S. Rowan, 2022. "Analyzing international organizations: How the concepts we use affect the answers we get," The Review of International Organizations, Springer, vol. 17(3), pages 597-625, July.
    17. Reini Schrama & Dorte Sindbjerg Martinsen & Ellen Mastenbroek, 2020. "Going Nordic in European Administrative Networks?," Politics and Governance, Cogitatio Press, vol. 8(4), pages 396-408.

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