Since 1945 the number of multilateral development banks (MDBs) has increased at a linear rate, with approximately one new MDB created every three years. The proliferation of MDBs has resulted in an inefficient duplication of international institutions with overlapping functions. Further, this trend contradicts our existing understanding of why states create countervailing international organizations. This article proposes a novel, two-step theoretical model of institutional change and creation in an attempt to explain this empirical puzzle. Utilizing the complementarities of rational-choice and historical institutionalism, the model demonstrates that the rational actions of states in the past can lead to seemingly irrational institutional change in the future. This process results in the repetitive creation of countervailing MDBs designed to solve the same functional problems. To evaluate the model's hypotheses, three case studies are undertaken, employing archival material, internal documents, and 48 interviews conducted by the author in London, Washington, D.C. and Manila, Philippines. The empirical results are of direct interest to policy-makers currently negotiating the structure of new MDBs in Asia and Latin America.
Public agencies outsource a wide variety of tasks to nonstate actors, or what can be referred to as regulatory intermediaries. In certain circumstances, these agencies may seek to disempower those regulatory intermediaries by reclaiming, duplicating, or transferring the outsourced task. When will these disempowerment attempts be successful? This article presents the Market Structure Hypothesis, which contends that the level of competition between regulatory intermediaries will, all things equal, determine whether disempowerment attempts succeed. To test this hypothesis, this article examines the U.S. Securities and Exchange Commission's attempts to acquire the independent capacity to conduct nationwide trade surveillance in the 1980s (Market Oversight Surveillance System) and 2010s (Consolidated Audit Trail). Evidence derives from archival materials, a Freedom of Information Act Request, and 60 interviews in Oxford, London, Toronto, New York City, and Washington, DC. The empirical results corroborate the hypothesis' expectations, contributing to our understanding of public-private partnerships and shedding new empirical light on an understudied topic of securities regulation.
The original version of this article contained a typesetting mistake: Table 2 was incorrectly presented in the PDF. The original article has been corrected.
Advances in telecommunication technology in the nineteenth century encouraged greater centralization of liquidity on single, dominant exchanges in most major industrialized countries. Electronic trading, in contrast, has precipitated increased market fragmentation, creating a host of new regulatory dilemmas. In an attempt to understand this phenomenon, this chapter proposes a two-stage process of market structural development in response to electronic trading. This process is then examined in equities and foreign exchange markets. Despite significant differences between these two asset classes, they have exhibited a remarkably similar pattern of disintermediation followed by reintermediation. This analysis is followed by a survey of recent regulatory approaches to mitigate the negative externalities associated with electronic trading. It concludes with a brief discussion on the future of market fragmentation and centralization in global capital markets.
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