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Smart Library on Globalization > Smart Library on Law and Globalization > Perspectives on Law and Globalization > Overview: What Influences the Local Reception of Global Law?
 
Limits on the Power of International Organizations
 
Certain features may limit the ability of otherwise powerful international financial institutions to bring about law reform.
 

Scholars Terry Halliday and Bruce Carruthers, in their study of bankruptcy law reform in different East Asian countries, note several ways that countries weakened by economic crisis resisted the influence of powerful international financial institutions (IFIs).

They argue that the ability of countries to resist powerful international actors is not simply a matter of local creativity and cunning. The situation and structure of IFIs may undercut their ability to influence constituent countries.

Powerful IFIs Have Limitations

Several features limit IFI influence:

  • IFIs often have little time when acting in crisis situations. Time pressures are also partly the reason for the failure of IFIs to build support and consensus within countries and to obtain political commitment from key constituencies.
  • IFIs have limited attention spans. Staff are often responsible for monitoring multiple countries on different continents.
  • IFIs often suffer from an inability to accurately “diagnose” the problem or situation in the country. For instance, IFI staff may not be trained appropriately, the IFI may lack experienced in-country staff or they may have limited access to domestic information sources.
  • IFIs rely on precedents or experiences in other countries. Effectively adapting these precedents to local institutional and cultural conditions may be beyond the usual expertise of IFI professionals.
  • IFIs can appear careless of national sensibilities. These tensions may engender nationalist resentment that can be exploited by local constituencies.
  • Asymmetries of power between IFIs and countries may be too small for the IFIs to exert significant leverage.

Resistance or Inability to Comply?

In addition to limitations inherent in the structure and operations of IFIs, aspects of a country’s situation may also cause the transplantation of law to be ineffective.

By definition, a country in economic crisis has limited resources to enact reform. And, the restriction of resources is not limited merely to capital. A country’s home-grown institutions may simply lack the capacity to make use of IFI cash infusions to create lasting legal reform. In other words, a foiled intervention does not always indicate resistance. It may simply indicate inability.

However, Halliday and Carruthers point out that governments may seek to pass resistance efforts off as inability. When a country is simultaneously undergoing many transformations (for example, economic, political and legal), claims that they are unable to enact the reforms seem plausible. They suggest that both scholars and practitioners proceed on the premise that governments are always in control when compliance with IFI reforms is forestalled. They say that even if this premise is wrong, it may help avoid the mistake too often made about the weak—that they are powerless.

 
Data and Methods:

Data Source:

Based on interviews with actors involved in the development of international insolvency law.

Funding Sources:

American Bar Foundation.

 
Full Text Availability:
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Reference

Halliday, Terence C., and Bruce G. Carruthers. 2007. "Foiling the Hegemons: Limits to the Globalisation of Corporate Insolvency Regimes in Indonesia, Korea and China." Pp. 255-301 in Law and Globalization in Asia Since the Crisis, edited by Christoph Antons and Volkmar Gessner. Oxford: Hart Publishing.

 
 
 
 
 
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