Revisiting the Political Economy of Regulation: Locating a Transnational Disclosure Initiative on the Regulatory Map

The regulatory space (Hancher and Moran, 1989) is complex and subsequently even more politicized as interactions within and between distinct sites of regulation (Cooper and Robson, 2006) become more multifaceted and possibly contradictory. We suggest the need to understand the boundaries of different sites within the regulatory space and shifts in those boundaries of regulation as they impact which site of regulation may develop specific rules. In turn, as different sites of regulation have different mandates and appeal to different interests, the regulator who develops the rules will impact not only their form and content but the consequences the rules have for different segments of society.

Regulatory debates, particularly those involving financial conduct and governance activities, have become increasingly prevalent in our post-financial crisis world. Regulatory responses to crises in confidence in financial markets have a long history of offering transparency and disclosure as a ‘solution’ to such crises (Merino and Neimark, 1982). Recently, the conduct and activities of the extractive industries have been a serious concern for many commentators, with these industries regarded as pits of opacity and questionable corporate conduct (Juncker, 2014). Prominent among such concerns have been proposals for so-called country-by-country (CBC) reporting of the payments that firms in the extractive industries make and that nation states receive in the form of taxes, royalties, and signature bonuses (among others) for operations in resource-rich countries.

Considering the number of sites in which CBC proposals have been considered and their highly contested nature, the issue is noteworthy as a transnational regulatory initiative that provides a window as to how different, potentially competing sites of regulation, respond to the initiative and how they mobilize particular interests in (re) interpreting their mandates. In relation to this issue, calls for financial transparency and disclosure by the extractive industries have been raised in three arenas: the International Accounting Standards Board (IASB); the European Union; and, the U.S. legislature and related Securities and Exchange Commission (SEC) rulings. We build these sub-cases from an extensive collection of primary source materials, including documents obtained from the public archives of a variety of actors and institutions, related to activities occurring during the years from 2002 to 2014.

We focus, firstly, on understanding how the field around proposals for CBC reporting by the extractive industries is organized. Secondly, we focus on the way in which discursive debates between critical actors reveal perceptions of regulatory institutions with regard to their jurisdiction and their mandate. Finally, recent years have seen increasing interest in transnational governance issues in which complex constellations of actors/institutions seek to shape policy-making debates and outcomes (Djelic and Sahlin-Andersson, 2006). However, we still have much to learn about actors and organizations who aim to shape transnational issues and relationships between these actors and organizations in the regulatory space. This is important because the relationship between the actors in the regulatory space, including the modern state, large MNCs, and professional service firms, among others, brings into question both the mode and outcome of regulating accounting (Puxty et al, 1987).