Über die Autorin bzw. den Autor

Tim Büthe is associate professor of political science and a senior fellow of the Rethinking Regulation Center at Duke University. Walter Mattli is professor of international political economy and a fellow of St. John's College, University of Oxford. His books include The Politics of Global Regulation (Princeton).

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"In a world where global standards increasingly determine access to world markets, understanding how those standards are set is of vital concern to citizens, governments, and firms. This deeply informed book asks the questions and presents the often counterintuitive facts about the relation between domestic interests and global rule making that will set the intellectual agenda and shape political discussion in this area for years to come."--Charles Sabel, Columbia Law School

"Tim Büthe and Walter Mattli say something new and important about the world economy. Better yet, they prove their case. As economic interdependence grows and with it the need for clear global rules, more and more of those rules are being developed by private regulatory groups. Büthe and Mattli not only document this shift, they show how inherently political the process is."--Charles Lipson, University of Chicago

"Büthe and Mattli's survey of hundreds of senior financial managers is a window into a world most of us have observed only anecdotally. This impressive book convincingly reveals that the global regulatory advantage goes to those actors who can get useful information into the right hands at the right time. Bravo on a compelling story about how private firms, industry organizations, and local regulators contribute to the global governance of finance and production."--Beth Simmons, Harvard University

"When you buy an electrical appliance or rely on corporate accounts, you are affected by transnational private regulation--a technical arena that is also highly political. InThe New Global Rulers, Tim Büthe and Walter Mattli brilliantly explain who wins, and who governs, in this significant but under-studied domain."--Robert O. Keohane, Princeton University

"Analytically powerful. Both the empirical material and the theoretical analysis are significant contributions, and I think they will be quite influential. The book's impact will be enhanced by its unusually clear writing and engaging discussions of history and examples. It is a very accessible volume, which should give it considerable crossover appeal beyond international-relations scholars."--Kenneth W. Abbott, Arizona State University

"The New Global Rulers covers a big topic--an important and growing one, with an ever-wider audience."--Peter A. Gourevitch, University of California, San Diego, and coauthor ofPolitical Power and Corporate Control

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"In a world where global standards increasingly determine access to world markets, understanding how those standards are set is of vital concern to citizens, governments, and firms. This deeply informed book asks the questions and presents the often counterintuitive facts about the relation between domestic interests and global rule making that will set the intellectual agenda and shape political discussion in this area for years to come."--Charles Sabel, Columbia Law School

"Tim Büthe and Walter Mattli say something new and important about the world economy. Better yet, they prove their case. As economic interdependence grows and with it the need for clear global rules, more and more of those rules are being developed by private regulatory groups. Büthe and Mattli not only document this shift, they show how inherently political the process is."--Charles Lipson, University of Chicago

"Büthe and Mattli's survey of hundreds of senior financial managers is a window into a world most of us have observed only anecdotally. This impressive book convincingly reveals that the global regulatory advantage goes to those actors who can get useful information into the right hands at the right time. Bravo on a compelling story about how private firms, industry organizations, and local regulators contribute to the global governance of finance and production."--Beth Simmons, Harvard University

"When you buy an electrical appliance or rely on corporate accounts, you are affected by transnational private regulation--a technical arena that is also highly political. InThe New Global Rulers, Tim Büthe and Walter Mattli brilliantly explain who wins, and who governs, in this significant but under-studied domain."--Robert O. Keohane, Princeton University

"Analytically powerful. Both the empirical material and the theoretical analysis are significant contributions, and I think they will be quite influential. The book's impact will be enhanced by its unusually clear writing and engaging discussions of history and examples. It is a very accessible volume, which should give it considerable crossover appeal beyond international-relations scholars."--Kenneth W. Abbott, Arizona State University

"The New Global Rulers covers a big topic--an important and growing one, with an ever-wider audience."--Peter A. Gourevitch, University of California, San Diego, and coauthor ofPolitical Power and Corporate Control

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The New Global Rulers

PRINCETON UNIVERSITY PRESS

Contents

List of Illustrations and Tables.......................................................................................................................ixList of Acronyms.......................................................................................................................................xiiiAcknowledgments........................................................................................................................................xvChapter One The Rise of Private Regulation in the World Economy.......................................................................................1Chapter Two Private Nonmarket Rule-Making in Context A Typology of Global Regulation.................................................................18Chapter Three Institutional Complementarity Theory....................................................................................................42Chapter Four Private Regulators in Global Financial Markets Institutional Structure and Complementarity in Accounting Regulation.....................60Chapter Five The Politics of Setting Standards for Financial Reporting................................................................................99Chapter Six Private Regulators in Global Product Markets Institutional Structure and Complementarity in Product Regulation...........................126Chapter Seven The Politics of Nuts and Bolts—and Nanotechnology ISO and IEC Standard-Setting for Global Product Markets........................162Chapter Eight Contributions to the Theoretical Debates in Political Science, Sociology, Law, and Economics............................................192Chapter Nine Conclusions and Implications for Global Governance.......................................................................................214Appendix 1 Financial Reporting Standards Survey Additional Survey Results............................................................................227Appendix 2 Product Standards Survey Additional Survey Results........................................................................................234Appendix 3 Survey Methods.............................................................................................................................238References.............................................................................................................................................249Index..................................................................................................................................................289

Chapter One

On 28 August 2008, the world financial community awoke to stunning headline news: the Securities and Exchange Commission (SEC), the powerful U.S. financial market regulator, had put forth a timetable for switching to International Financial Reporting Standards (IFRS), produced by the International Accounting Standards Board—a private-sector regulator based in London. SEC-regulated U.S. corporations were to be required to use IFRS, possibly as soon as 2014. Only a decade earlier, the suggestion that the United States might adopt IFRS "would have been laughable," as many experts expected U.S. standards to become the de facto global standards.

The SEC's decision to defer to an international private standard-setter is part of a broader and highly significant shift toward global private governance of product and financial markets. What is at stake? Financial reporting standards specify how to calculate assets, liabilities, profits, and losses—and which particular types of transactions and events to disclose—in a firm's financial statements to create accurate and easily comparable measures of its financial position. The importance of these standards, however, runs much deeper. Through the incentives they create, financial reporting standards shape research and development, executive compensation, and corporate governance; they affect all sectors of the economy and are central to the stability of a country's financial system. IFRS, however, differ in some important respects from U.S. Generally Accepted Accounting Principles (GAAP), the financial reporting standards so far required by the SEC. Having evolved in a very litigious business environment, U.S. GAAP are highly detailed and address a vast range of specific situations, protecting companies and auditors against lawsuits. IFRS, by contrast, have traditionally been principles-based. They lay out key objectives of sound reporting and offer general guidance instead of detailed rules.

The implications of a switch from U.S. GAAP to IFRS are therefore momentous: twenty-five thousand pages of complex U.S. accounting rules will become obsolete, replaced by some twenty-five hundred pages of IFRS. Accounting textbooks and business school curricula will have to be rewritten, and tens of thousands of accountants retrained. Companies will need to spend millions of dollars to overhaul their financial information systems; many will need to redesign lending agreements, executive compensation, profit sharing, and employee incentive programs. And investors as well as financial analysts will need to learn how to interpret the new figures on assets, liabilities, cash flow, and earnings. The implications run deeper still. As explained by Robert Herz, chairman of the organization producing U.S. GAAP—the Financial Accounting Standards Board (FASB): "Liv[ing] in a world of principles-based standards involves [far-reaching] changes—institutional changes, cultural changes, legal and regulatory changes." In sum, the proposed shift of rule-making authority from the domestic to the international level will affect numerous and diverse actors, and bring deep changes to the American financial market.

The United States is not the only country to switch to international standards, of course. As figure 1.1 shows, the number of jurisdictions where stock market regulators permit or even require the use of IFRS has exploded since 2001—despite the substantial costs of the switch for many countries' firms, investors, and regulators. In the member states of the European Union (EU) and about sixty other countries across all continents, the use of IFRS is already mandatory for companies with publicly traded financial securities (stocks and bonds). And the trend is continuing: government regulators of several additional countries, including Japan, Canada, Brazil and India, have committed themselves to requiring IFRS in the near future.

The global convergence of accounting standards is driven, in large part, by the international integration of financial markets and the increasingly multinational structure of corporations. These developments have not only led to economic growth and greater profits for many, but have also raised the costs of continued cross-national divergence of financial reporting standards for companies and investors. Indeed, cross-national differences in these rules are said to have exacerbated the global financial crisis of 2008–9—and the Asian Financial Crisis of 1997–98 before it. The belief that harmonization would bring substantial benefits has prompted firms and governments to push for a single...