Politics and Institutions in the Regulation of Global Capital

This review article examines the literature on the regulation of global finance, focusing on three recent contributions: Rawi Abdelal's Capital Rules: The Construction of Global Finance (Harvard UP, 2007); David A. Singer's Regulating Capital: Setting Standards for the International Financial System (Cornell UP, 2007); and Kees Camfferman and Stephen A. Zeff's Financial Reporting and Global Capital Markets: A History of the International Accounting Standards Committee, 1973-2000 (Oxford UP, 2007). I explore different notions of who the key actors are and what the sources of their preferences are, focusing on the role of domestic political institutions in aggregating those preferences as "inputs" into inter- or transnational negotiations over regulatory cooperation (negotiations that can be explicit or implicit). I discuss different theoretical approaches to how domestic preferences get translated into international outcomes (whether or not cooperation takes place and, if so, on what terms). Finally, I examine what determines the role of international organizations in this process, which can range from providing "merely" the context for the negotiation to exhibiting independent agency.