The Subdued Giant: The Predicament of the Law in Harnessing Global Markets
| Published date | 01 September 2009 |
| DOI | 10.3366/E0954889009000413 |
| Pages | 302-325 |
| Date | 01 September 2009 |
| Author | Norman Mugarura |
The article delineates that it is impossible to have any meaningful regional or global market economy in the absence of a proper functioning
Proper functioning in this respect is simply supposed to mean a system where laws are applied equally and non-discriminatorily – a system that is not inclined to favour one side against the other.
legal system. As such, law as an instrument for social change should provide a framework in which to order a meaningful global economy. It is my submission that global co-operation is necessary to avoid the adverse effect of the prisoner's dilemma, in which each participant is unsure of whether others will cooperate, or engage in behaviour detriment to the stability of the global economy.R. Bollen, ‘The International Financial System and Future Global Regulation’,
In 1977, the then president of Uganda – Ida Amin Dada, pulled Uganda out of the East African Community (EAC) initiative, apparently unhappy with the asymmetric distribution of the benefits generated from the EAC between the three integrated East African countries of Kenya, Tanzania and Uganda. Although Amin was always impulsive in his action, the above move seemed to have been well thought through.
This identifies and exploits any inconsistencies in the market and undermines the effectiveness of capital regulation. See C. Mattens, ‘Managing Capital Accord’ (2000) p. 4, available at
Capital adequacy has been criticised that the required eight-percent capital reserve is arbitrary since it doesn't reflect the lows and highs of a business. In an ideal world, a well-designed regulatory system should see capital reserves rising during periods of high profitability and earnings for banks and falling in a recessionary period. See, E. I. Altman and A. Saunders, ‘An Analysis and Critique of the BIS Proposal of Capital Adequacy and Ratings’, 25
M. Bagheri and C. Nakajima, ‘Optimal Level of Financial Regulation under the GATS: Regulatory Competition and Co-operation Framework for Capital Adequacy and Disclosure of Information’, 5(2)
Janet Dine argues that the concept of transnational corporations is in fact a fallacy because them so-called corporations would have been created as American or British companies in their home countries in accordance with their home laws, and simply by operating in foreign countries doesn't necessarily make them trans-national. See Janet Dine,
B. De Sousa Santos,
In the current global climate, states have lost their sovereign space as the competition for markets intensifies. The fact that law is surbordinate to power in the event of conflicting interests connotes that law alone cannot help to salvage global relations; and secondly the global system is prone to abuse since it is characteristically contingent upon the dynamics of power and the tendency for the powerful states to assert their leverage to dominate global regimes.
Vividly captured by the phrase that ‘power is corrupt and absolute power corrupts people absolutely’.
It is my contention that subscribing to global initiatives be preceded by tailored reforms at a local level to enhance the co-existence of the two societies, that is, ‘the local’ and ‘the ‘global’. Using Uganda as a referent point, the paper highlights the tenuous nature of developing economies, which are often deficient in infrastructural development and prone to the vagaries of the putative global era. In light of the above, many developing economies have become marginal participants in the global economy because of the dictates of the global market economy. The systemic global failures are aggregated by the fact that human rights and the environment – the embodiments of human life, have been surbordinated to rapacious global capitalism, generating legitimacy crisis and the increasing antipathy towards the system that is potentially capable of unlocking abundant development opportunities.
This situation is captured by demonstrations that have been witnessed in almost every part of the globe over what is seen as perpetuation of injustice in the name of trade.
Firstly, the twin problems of underdevelopment and its effect have significantly curtailed the local society's potential to create robust national institutions to leverage the adoption of necessary global initiatives.
Oxfam,
This has had wide implications for every fibre of human life.
I agree entirely with Rosalyn Higgins
R. Higgins, ‘Problems & Process’,
De Sousa Santos,
P. Allott, ‘The Concept of International Law’, 3
R. Folk, ‘The Role of Law in World Society: Present Crisis and Futures Prospects’, in
The legal system of a society is supposed to provide an operational framework for securing good values that are commonly regarded normative by the society – peace, security, freedom within which the society can function – be ordered or organised. Hence, the paper argues that without law to foster fundamental freedoms, chaos would be loosened upon societies: cars would not safely move on the roads, children would not safely go to school, people would not safely live with one another, aeroplanes would not safely fly and land; and without it perhaps one should also like to add that life would literally stall.
Higgins,
In addressing the interaction of globalisation and the law, there are two distinct issues worthy of mention. Firstly, the adoption and implementation across large swathe of the globe of what are now widely accepted as valuable legal norms and approaches. Secondly, the increasing number of areas of the law which are now subject to international agreements more or less binding on the states parties to them. Most obvious are trade laws and the international sale of goods (which among them cover a range of issues from tariffs to contract enforcement and intellectual property rights). Therefore there is need to protect those legal specificities that express and define the values and attitudes of local and national communities.
Likewise national parliaments (governments), courts, human rights, democracy, the environment or global institutions, this paper illuminates that globalisation of markets initially thought to salvage the North-South divide has so far not been able to realise its anticipated objectives.
The World...
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