The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

International Coordination of Regulation

  • David Lazer
Reference work entry


Trade among states with diverse regulatory systems creates the possibility of taking advantage of the cost differentials in production that result. However, it is increasingly clear that what happens in one jurisdiction affects policy in other jurisdictions. It is often argued that this creates a ‘race to the bottom’ effect, where the most lax regulation gains an advantage, but the evidence on this is mixed, at best, and there is a plausible argument too for a ‘race to the top’ effect, where states set high regulatory standards as a barrier to entry.


Comparative advantage Delaware effect California effect Policy information interdependence Race to the bottom Race to the top Regulation Regulatory competition 

JEL Classifications

K2 K23 L50 L51 
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Thanks go to Elta Smith, for her research assistance with respect to this paper.


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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David Lazer
    • 1
  1. 1.