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The book focuses on the philosophical underpinnings, problems, and consequences of regulatory competition. The term ‘regulatory competition’ describes a dynamic in which states as producers of legal rules compete for the favour of mobile consumers of their legal products. Besides discussing regulatory competition, a factual phenomenon, identifying the structural conditions for law markets to occur and referring to particular fields of law where competitive dynamics among legislators can be observed, arguments critical of regulatory competition as a policy approach are presented from the perspective of political theory and philosophy. These arguments provide a clearer picture of the incompatibilities between the theoretical pedigree of regulatory competition—the assumptions we must accept in order to see its promises and its appeal—and other sets of beliefs and commitments that shape our thinking about law and the state. They come to the conclusion that the existence of so-called ‘law markets’ that come with a commodification of law itself is at odds with both our conception of the functions of legal rules and of key political ideals and principles such as democracy, state autonomy, and political authority.

This chapter introduces regulatory competition as a conceptual framework and factual phenomenon. It discusses the structural preconditions of a ‘law market’, including state suppliers’ incentives to compete at all. It closes with a glance at a number of areas in which competitive dynamics among legislators can be found to operate. Law markets have emerged in a growing number of fields, most prominently in the ‘charter competition’ between US states for being chosen as a place of incorporation, with Delaware being the market leader. Another example that has been under intense academic scrutiny is tax competition: states compete for tax revenue and try to offer ‘tax products’ that appeal to mobile individuals and corporations. Further examples discussed in this chapter are drawn from contract, labour, and insolvency law, as well as dispute resolution.