Globalisation, National Democratic Institutions and the Impact of Global Regulatory Governance on Developing Countries

• Jurisdiction: South Africa
• Pages: 68-89
• Author: Dennis Davis
• Date: 15 August 2019
• Published date: 15 August 2019
• Citation: 2009 Acta Juridica 68

Globalisation, National Democratic

Institutions and the Impact of Global

Regulatory Governance on

Developing Countries

DENNIS DAVIS* & HUGH CORDER†

University of Cape Town

I INTRODUCTION

The past f‌ive years have witnessed the launch of a new era of scholarly

research and writing, known as Global Administrative Law (GAL). Its

proponents have approached it primarily (though by no means exclu-

sively) from the perspective of a sophisticated, highly developed political

economy, which has played the leading role in the advancement of a

system of what amounts to global governance, with special emphasis on

the f‌inancial and trade sectors. Their focus has been the identif‌ication and

development of regulatory mechanisms to render the exercise of discre-

tion and authority at the supra-national level both transparent and

accountable. In doing so, existing models and rules at both international

and domestic levels have been relied on, again chief‌ly from the perspec-

tive of the developed world.

This paper poses (and seeks to answer) questions about the likelihood

of success of this project and about its potential benef‌its, viewed particu-

larly from the vantage point of the developing world. Wedo so by tracing

the evolution of administrative law within common-law systems, and by

situating the rise of GAL within the global political economy of the last 25

years. Wediscuss a particular diff‌iculty, which is presented by the apparent

absence of a sovereign power at the global level, but recognise that this

need not be fatal to the project. Weargue that recent developments in the

‘constitutionalised’ administrative law of post-apartheid South Africa

provide useful indicators for possible paths which GAL could follow.

II ADMINISTRATIVELAW WITHIN THE STATE

The development of administrative law is shaped by the dominant theory

of the state. For much of the nineteenth century the state was designed to

* Judge of the High Court of South Africa; Honorary Professor in the Faculty of Law,

University of Cape Town.

† Professor of Public Law, University of Cape Town.We are indebted to Janice Bleazard for

outstanding research assistance.

68

2009 Acta Juridica 68

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play a limited, almost negative role – at best a referee to enforce the rules

of the market.

1

Thus, in chapter 6 of his Road to Serfdom, Hayek, a major

protagonist of the minimal state, gave explicit political content to Dicey’s

f‌irm view that a rule of law based upon individual rights was incompatible

with administrative law, by contending that the welfare state was incom-

patible with the rule of law.

2

However, for most of the twentieth century

neither Hayek nor Dicey’s view found much favour as forms of the

welfare state spread through the developed world, particularly after the

economic depression of the 1920s, and administrative law developed in

form and content to accommodate such a changed form of state. In

general, it can be said that judicial and other processes of administrative

review became more sophisticated and detailed, involving a greater

degree of scrutiny of administrative action. Such developments were

justif‌ied by the need for levels of surveillance appropriate to meet the

rapid burgeoning of executive authority in the typical welfare state. This

regulatory approach was not entirely negative, as it also played a facilita-

tive (‘green light’) role. In a signif‌icant study of dominant legal develop-

ments over the past 150 years, Duncan Kennedy writes that:

The crises of the modern factory . . . and the urban slum, and later the crisis of

the f‌inancial markets and the Great Depression, all derived from the failure of

coherently individualist law to respond to the coherently social needs of

modern conditions of interdependence....There was labor legislation, the

regulation of urban areas through landlord/tenant, sanitary and zoning

regimes, the regulation of f‌inancial markets and the development of new

institutions of international law.

3

The dominance of the welfare state survived only until the end of the

third quarter of the twentieth century. The oil price shocks of the 1970s,

the deregulation of f‌inancial markets, the resilience of stagf‌lation to policy

initiatives and the dramatic developments in information technology

ushered in a new form of neo-liberalism in which market forces were

considered superior to other forms of social ordering. Central to the rise

of this new hegemony was the elimination of domestic market regulation

and all regulatory barriers to international trade. In 1990 John Williamson

published a critical article setting out the conceptual basis for the neo-

liberal global framework, which turned into an iconic neo-liberal text.

4

A

1

C Harlow & R Rawlings Law and Administration 2ed (1997) 9ff. In the f‌irst edition of this

work (1984), the authors refer to this as the ‘red light’model, using the traff‌ic light analogy.

2

A V Dicey An Introduction to the Study of the Law of the Constitution 10ed (1961) 227; see

F Hayek The Road to Serfdom (1944).

3

D Kennedy ‘Three globalizations of law and legal thought: 1850–2000’ in D Trubek &

ASantos (eds) The New Law and Economic Development: A Critical Appraisal (2006).

4

J Williamson ‘What Washington means by policy reform’ in J Williamson (ed) Latin

American Adjustment: How Much has Happened? (1990).

69THE IMPACT OF GLOBAL REGULATORY GOVERNANCE ON DEVELOPING COUNTRIES

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