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Globalization and the future of

the law of the sovereign state

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Eric C. Ip*

Globalization is transforming the contemporary international system. Two major developments

have arisen at the expense of the law of the sovereign state. First, specialized regimes of public
international law have proliferated into areas previously monopolized by the state, such as
human rights, environmental law, and trade law. Second, rules enacted by intergovernmental
organizations and transnational corporations have become increasingly prominent. Inevitably,
intertwined with these developments is the undermining of the Westphalian constitutional
concepts of state sovereignty. Combining the approaches of international political economy
and sociolegal theory, this paper contributes to the jurisprudential debate by arguing that
globalization is far from the simple negation of sovereignty and state law. Global processes
have transformed state law in remarkable ways. At the same time, state law is highly adaptive
and plays a significant role in recasting transnational developments. More importantly,
the current distinction between global and state law is increasingly blurred in practice. The
outcome of these interactions demands a rethinking of what “law” is.

1.  Introduction
Since the seventeenth century, the legal framework of the sovereign state has served
as the paradigmatic arena for political governance and economic exchange.1 The
institution of sovereignty has been constitutionalized on both national and inter-
national levels.2 Domestically, it is usually chaneled through a prominent legal fic-
tion, the national constitution, which gives “formal notice that a people had legally
and legitimately self-determined their form of self-rule.”3 State law typically claims

* Doctor of Philosophy candidate, Centre for Socio-Legal Studies, Faculty of Law, University of Oxford;
Teaching Fellow, School of Public Policy, University College London; Honorary Academic Tutor in Law
and Social Sciences, St. John’s College, The University of Hong Kong. Email: eric.ip@law.ox.ac.uk
1
See Marcílio T. Franca, Westphalia: A Paradigm? A Dialogue between Law, Art and Philosophy of Science,
8 German L. J. 955, 956 (2007).
2
See Michael J. Warning, Transnational Public Governance: Networks, Law, and Legitimacy 11 (2009).
3
Douglas Howland & Luise White, Introduction: Sovereignty and the Study of States, in The State of Sover-
eignty: Territories, Laws, Populations 10 (Douglas Howland & Luise White, eds., 2009).

I•CON (2010), Vol. 8 No. 3, 636–655 doi: 10.1093/icon/moq033

 Globalization and the future of the law of the sovereign state   637

“final authority” over matters within its territorial jurisdiction.4 Similarly, traditional
international rules have been fundamentally concerned with interstate relations and
not domestic matters. Public international law’s formal insistence on equal sovereign
rights both constitutes and guarantees state law’s independent constitutional identity
and autonomy. However, a number of recent developments have rendered assertions
of the absolute juridical sovereignty of state law increasingly problematic. Nonstate

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actors such as intergovernmental organizations (IGOs), international nongovern-
mental organizations (INGOs), and transnational corporations (TNCs) have assumed
greater political and economic importance in the contemporary world. Many of these
nonstate actors have penetrated deeply into national legal systems and contributed
“progressively” to the transnationalization of international law.5
The intensification of human interactions and the diffusion of normative structures
on a global scale are seemingly irreversible. There is a “wide consensus” that some
kind of “erosion” of sovereignty has taken place.6 Many old visions of the Westphalian
arrangement are no longer viable; states are no longer the sole legislators and legal
enforcers. Two major developments highlight the international legal system’s partial
withdrawal from its established state-centric orientation and its embrace of globally
relevant concerns: the proliferation of specialized regimes of international law, which
extend into major domestic policy areas, and the rising prominence of transnational
regulatory regimes enacted by nonstate actors. The rise of nonstate regulation of
issues previously monopolized by state legal control raises important questions about
the future of state law. Will national authorities’ claims to sovereign constitutional
autonomy be increasingly marginalized as globalization intensifies? Will the general
relevance of state law diminish over time? Will sovereign state legal orders be ultim-
ately replaced by other mechanisms of social control?
This paper argues that the actual impact of globalization on the state’s legal
apparatus is far more complex than that of simple negation. Global forces are likely
to transform state law; however, state law has a remarkable capacity to adapt to dif-
ferent environments and to constrain the actions of transnational actors. The result
of these interactions is likely to force a reworking of the concept of “law.” Sections 2
and 3 discuss how the growing prominence of nonstate actors and transnational law7
are changing the face of international law and governance. Section 4 begins with a
review of the ambiguous concepts of the sovereign state and state law. It demonstrates
that the relationship between domestic, international, transnational, and global insti-
tutions is complicated and interwoven. Next, this section analyzes the impact of state
legal actors on global and transnational governance and explains the implications for
the future of state law. Section 5 concludes.

4
See Denis J. Galligan, Law in Modern Society 175 (2007).
5
Jan Klabbers, An Introduction to International Institutional Law 313 (2009).
6
George Ritzer, The Globalization of Nothing 2 5 (2007).
7
For a brief discussion of public and private transnational law, see Warning, supra note 2, at 60.
638   I•CON 8 (2010), 636–655

2.  The globalization of international law and governance

2.1.  Globalization and sovereignty
Globalization is a rich if ambiguous concept, as well as one of the most difficult modern
phenomena to define clearly.8 It is outside the scope of this inquiry to discuss and
evaluate the full implications of economic globalization and its critiques. Nonethe-

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less, it is largely uncontroversial to suggest that globalization has exerted an immense
impact on the sovereign state. The transnational spread of capital and the formation of
global markets entail the replacement of previously fragmented national economies.9
Sovereign states are experiencing increased difficulties in supplying regulatory and
redistributive public goods and establishing and enforcing property rights in the face
of relatively open trade, rapid information-technology advances, and considerable
financial deregulation.10 Additionally, both market relations and political discontent
with economic policies have virtually become “borderless.”11
Transnational actors in the form of IGOs, INGOs, TNCs, along with the trans-
national networks of state agencies, private foundations, and migrants, now play sub-
stantial roles on the global stage.12 Apparently, assertions of Hobbesian sovereignty
are now impotent.13 The emergence of “sovereignty-free actors” in international gov-
ernance implies that the currently inadequate state-centric international system is
changing in light of new transnational developments.14 International relations theo-
rists disagree on the influence of nonstate actors on state sovereignty.15 Realists tend
to be indifferent to the potential challenge posed by nonstate actors to the power of the
state. For realists, the success of IGOs, INGOs, and other transnational entities depends
heavily on the support of powerful states. Conversely, constructivists hold that non-
state actors have become pivotal transmitters of social structures that condition state
action. The standard neoliberal interpretation of globalization sees a decline in state
territoriality.16 According to this view, state sovereignty has been “compromised” by

8
Stephen McBride & John Wiseman, Introduction, in Globalization and its Discontents 22 (Stephen mcbride &
John Wiseman eds., 2000); Anoushiravan Ehteshami, Globalization and Geopolitics in the Middle East: Old
Games, New Rules 17 (2007).
9
Syed J. Maswood, International Political Economy and Globalization 2–4 (2008).
10
Philip Cerny, Globalization and the Changing Logic of Collective Action, in Theory and Structure in Interna-
tional Political Economy: An International Organization Reader 125 (Charles Lipson & Benjamin J. Cohen eds.,
2000).
11
See Amartya Sen, Identity and Violence: The Illusion of Destiny 125 (2007).
12
Klaus Dingwerth & Philip Pattberg, Actors, Arenas, and Issues in Global Governance, in Palgrave Advances in
Global Governance 44 (Jim Whitman ed., 2009).
13
See Martin Loughlin, Sword and Scales: An Examination of the Relationship Between Law and Politics
145–147 (2000).
14
W. Andy Knight, Global Governance as a Summative Phenomenon, in Palgrave Advances in Global Govern-
ance 177 (Jim Whitman ed., 2009).
15
Margaret Karns & Karen Mingst, International Organizations: the Politics and Processes of Global Govern-
ance 252 (2009); Kelly-kate S. Pease, International Organizations: Perspectives on Governance in the Twenty-
first Century 41–56, 89–100 (2010).
16
Johannes Dragsbaek Schmidt & Jacques Hersh, Globalization and Social Change 1–16 (2000).
 Globalization and the future of the law of the sovereign state   639

the competing interests of nonstate actors like NGOs. Indeed, many national rules bar-
ring the movement of labor, goods, services, and capital have been replaced by new
institutions that span several territories. However, arguments that nonstate actors are
nothing more than agents of power centers or arenas of interstate cooperation, sub-
sidiary to national interests, do not account for the dynamic and often subtle changes
they have brought to the belief systems of international society.

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Major TNCs, which are largely unconstrained by the legal systems of individual
states, now account for a massive proportion of global production.17 Complex
economic, humanitarian, health, and environmental problems no longer heed the
artificial boundaries imposed by states.18 As expected, the rapid growth of effective
political and economic institutions beyond the national government is unprece-
dented.19 Intensified exchanges in commerce, migration, technology, and culture
have increased the interdependence of states.20 Economies have become subordinate
to international power more than to state regulation.21 International problems are
often too complicated to be effectively resolved by individual national governments.22
State and nonstate actors are increasingly linked in new partnership arrangements
that “compress the national interest with economic interest.”23 Diverse entities,
ranging from powerful TNCs to previously marginalized grassroots actors, are now
capable of posing formidable challenges to state-control policies.24 In short, the state
is “obliged” to share power with other groups within complicated, multilayered net-
works of political power.25
It is tempting to accept that the relationship between the global and the local is
inherently paradoxical.26 However, this is not entirely accurate. The two are not
merely opposing forces; they may also be mutually reinforcing partners.27 Assertions
that transnational developments are wholly concerned with the modern state’s loss

17
Loughlin, supra note 13, at 144.
18
Karns & Mingst, supra note 15, at 25.
19
See John Wiseman, Alternatives to Oppressive Globalization, in Globalization and its Discontents 219 (Stephen
Mcbride & John Wiseman eds., 2000).
20
Anthony Anghie, Basic Principles of International Law: A Historical Perspective, in International Law for
International Relations 65 (Basak Cali ed., 2010).
21
James J. Rice & Michael J. Prince, A ‘Double Movement’: Implications of Globalization and Pluralization for
the Canadian Welfare State, in Globalization and its Discontents 172 (Stephen Mcbride & John Wiseman eds.,
2000).
22
Richard Higgott, International Political Institutions, in The Oxford Handbook of Political Institutions 625
(R.A.W. Rhodes, Sarah A. Binder & Bert A. Rockman eds., 2008).
23
Alfred C. Aman Jr., Globalization, Democracy, and the Need for a New Administrative Law, 49 U.C.L.A. L. Rev.
1687, 1694 (2002).
24
Christoph Antons & Volkmar Gessner, Introduction, in Globalization and Resistance: Law Reform in Asia
Since the Crisis 4 (Christoph Antons & Volkmar Gessner eds., 2007).
25
David Held, Cosmpolitanism, in Governing Globalization: Power, Authority, and Global Governance 307
(David Held & Anthony G. Mcgrew eds., 2002).
26
Mohamed S. Abdel Wahab, Cultural Globalization and Public Policy: Exclusion of Foreign Law in the Global
Village, in Law and Sociology: Volume Eight 375–376 (Michael Freeman ed., 2006).
27
Heather Hofmeister & Andre P. Breitenstein, Contemporary Processes of Transnationalization and Globalization,
23 Int’l Sociology 480, 480–486 (2008).
640   I•CON 8 (2010), 636–655

of control over the migration of capital and people are largely mistaken. It should be
recalled that the elevation of the constitutional state, to its current legally supreme
position in the international system, is itself a transnational occurrence. The spread
of the sovereign nation-state as a dominant form of political association from Western
Europe to most of the world in the past three hundred years is an example of “global
interconnectedness.”28

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2.2.  The need for pluralist legal perspectives
The entrenched vision of law as a “uniform and monopolistic” set of rules that gov-
erns a given community is currently experiencing a collapse.29 To approach legal
phenomena pluralistically—from the multiplicity of “global, international, transnational,
regional, inter-communal, municipal, substate and non-state local” perspectives—
enhances our understanding of the globalization of international governance.30
A “useful” legal pluralism should recognize the importance of state law but refrain from
assuming that everything is inferior to it.31 State law should be neither understood as
the supreme system of social ordering nor simply seen as parallel to other legal orders.
The relationship between the law of the state and other normative structures is crucial
to the understanding of legal phenomena as a whole.32
Contemporary jurisprudential scholars, such as H. L. A. Hart, John Rawls, Ronald
Dworkin, Hans Kelsen, and Joseph Raz, remain too focused on scholarly approaches
that concentrate excessively on formal state legal norms.33 In particular, Hart and
Kelsen are largely against the notions of legal pluralism and nonstate law.34 Many
professional lawyers rely on the primacy of the “closed systems” of state law as the
“regulator of social relations.”35 Mainstream social-science writings on globalization
often neglect the role of law. However, legal academia tends to emphasize the role of
legal forces to the detriment of globalization.36 As such, legal pluralism, which recog-
nizes the coexistence of multiple legal orders within the same social space, has become
more important than ever.37

28
Andrew Linklater, Globalization and the Transformation of Political Community, in The Globalization of
World Politics: An Introduction to International Relations 547 (John Baylis, Steve Smith & Patricia Owens
eds., 2008).
29
Brian Z. Tamanaha, Understanding Legal Pluralism: Past to Present, Local to Global, 30 Syd. L. Rev. 375, 409
(2008).
30
William Twinning, Globalization and Legal Theory 252 (2000).
31
Roger Cotterrell, Transnational Communities and the Concept of Law, 21 Ratio Juris 1, 10 (2008).
32
William Twinning, General Jurisprudence 375 (2009).
33
Werner F. Menski, Comparative Law in a Global Context: The Legal Systems of Asia and Africa 5 (C 2006).
34
Twinning, supra note 30, at 250.
35
Menski, supra note 33, at 7–8.
36
Id., at 8.
37
Twinning, supra note 30, at 216.
 Globalization and the future of the law of the sovereign state   641

Long before globalization was put under the spotlight, “constellations of legal plural-
isms” were already in existence.38 Independent and mutually recognizing legal orders
predated the constitutional framework of the modern state. For example, the laws of
the Holy Roman Empire were of a “pre-state” and “transboundary organizational
form.”39 The predecessor of the modern German state was not a “nation” but a patch-
work of politically linked territories of imperial electors and princes within the over-

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arching constitutional structure of the empire.40 The implementation of the empire’s
law was left in the hands of the monarchs of small and medium-size kingdoms,41 who
were active in making their own laws. By the sixteenth century, the seven-hundred-
year-old empire had issued its own legal regulations,42 running concurrently with the
legislative activities of the constituent countries and without stimulating any major
legal conflict that could bring the imperial constitutional system to a breaking point.
This was not an isolated phenomenon. What makes present-day transnational legal
pluralism different from this older form of legal pluralism is the former’s rejection of
the idea that law must always be formally identifiable with the activities of the nation,
the state, or the government.43
Marc Hertogh identifies “three waves” of nonstate legal development: colonialism,
domestic legal pluralism, and globalization.44 As he argues, without reliable historical
baselines for comparison, it is difficult to determine empirically whether more nonstate
law exists than before. Nevertheless, it is certain that since the advent of modernity,
people have become accustomed to adopting state law as the standard paradigm for
legal phenomena. This may explain why the increasing visibility of nonstate law is
often surprising. For instance, the regulatory system of domain names arose from the
decisions of managers and engineers of internet companies, not public authorities.

2.3.  The global transformation of international law

Before the end of the Second World War, legally speaking, states were “sovereign in
an almost absolute sense, exercising supreme authority.”45 When the Westphalian
doctrine of absolute sovereignty was prevalent in the late nineteenth and early twen-
tieth century, it was commonly assumed that the autonomous decisional powers of

38
Franz Benda-Beckmann & Keebet von Benda-Beckmann, Transnationalization of Law, Globalization, and
Legal Pluralism: A Legal Anthropological Perspective, in Globalization and Resistance: Law Reform in Asia Since
the Crisis 73 (Christoph Antons & Volkmar Gessner eds., 2007).
39
Dietmar Willoweit, The Holy Roman Empire as a Legal System, in Legislation and Justice 124 (Antonio
Padoa-schioppa ed., 1997).
40
Id., at 123.
41
Id.
42
Id., at 129.
43
Gunther Teuber, Global Bukowina: Legal Pluralism in the World Society, in Global Law Without a State 12
(Gunther Teuber ed., 1997).
44
Marc Hertogh, What is Non-state Law? Mapping the Other Hemisphere of the Legal World, in International
Governance and Law: State Regulation and Non-state Law 1–18 (Hanneke Van Shooten & Jonathan Verschuuren
eds., 2008).
45
David P. Forsythe, Human Rights in International Relations 21 (2006).
642   I•CON 8 (2010), 636–655

constitutionally independent sovereign states could not and would not be weakened
by their activities in international institutions.46 International law was essentially
concerned with forestalling conflicts and confirming the independence of municipal
jurisdictions. Sovereign states in the post-1945 world began to make use of mutual
consent to establish institutions that, paradoxically, limited the exercise of sovereignty.
Although public international law is likely to endure as a normative “horizontal form

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of cooperation,” there are compelling signs that it is gradually moving away from
the restrictions imposed by state-centric principles.47 In particular, its dyadic mode of
organization is undergoing a process of “thickening” into a triadic architecture in
which third-party, nonstate actors, such as IGOs, arbitration panels, and international
courts, have a greater role.48
Currently, the state cannot ignore issues related to the wider interests of humanity,
even within its own borders. Individuals and groups enjoy greater recognition as sub-
jects of international law, as seen in the expansion of legal regimes and enforceable
mechanisms in the fields of international human rights law, international refugee
law, and international criminal law.49 Victor Peskin observes that the United Nations
Security Council’s ad hoc tribunals for the former Yugoslavia and Rwanda “contin-
ued to trump state sovereignty insofar as targeted states and all other UN members
were legally bound to comply.”50 However, the development of international criminal
tribunals suggests a “changing balance of tribunal authority and state sovereignty.”
He criticizes the “next generation” of war crimes tribunals as supporting the expan-
sion of the influence of state judicial actors as well as the strengthening of the doctrine
of sovereignty.
The Rome statute of the International Criminal Court (ICC) upholds the principle
of complementarity and recognizes that states do not have to collaborate with the
court unless they have ratified the statute. However, this is only part of the picture.
The establishment of special hybrid courts in Cambodia, East Timor, Lebanon,
and Sierra Leone means that states no longer see sovereign state law alone as a

46
Andres Osiander, The States System of Europe, 1640–1990: Peacemaking and the Conditions of International
Stability 3 (1994).
47
Heyvaert notes that “international law is undergoing a transformation affecting both constituent parts
of its essence: the role of states as sole authors of international norms and the binding nature of norms.
Both the proliferation of ‘decentered’ forms of international regulation, emanating from non-state actors
and the explosive growth of aspirational, coordinating, or facilitating instruments which only partially
correspond to the ideal type of the binding norm enforceable through coercion push the study of inter-
national law in new and challenging directions.” See Veerle Heyvaert, Levelling Down, Levelling Up, and
Governing Across: Three Responses to Hybridization in International Law, 20 Eur. J. Int’l L. 647, 648 (2009);
Andrew Halpin & Volker Roeben, Introduction, in Theorizing the Global Legal Order 4 (Andrew Halpin &
Volker Roeben eds., 2009).
48
Andrew Hurrell, On Global Order: Power, Values, and the Constitution of International Society 62 (2007).
49
Christian Reus-Smit, International Law, in The Globalization of World Politics: An Introduction to Interna-
tional Relations 287 (John Baylis, Steve Smith & Patricia Owens eds., 2008).
50
Victor Peskin, International Justice in Rwanda and the Balkans: Virtual Trials and the Struggle for State
Cooperation 246–247 (2008).
 Globalization and the future of the law of the sovereign state   643

sufficient means of punishing serious war crimes. The decisions of international judges
and prosecutors now permeate and shape the domestic criminal law of these countries.
William Burke-White further asserts that the ICC has become “part of a system of multi-
level global governance” through its alteration of state preferences and policies and its
deterrence of future crimes through judicial and prosecutorial pronouncements.51
International law has evolved into a central framework for the “emergent system”

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of global governance. This system supplies the normative mechanisms for the
establishment of IGOs and the facilitation of the international response to issues as
diverse as nuclear proliferation, climate change, ocean use, and the functioning of
the world trade system.52 Alexandra Khrebtukova insightfully points out, “[n]ational
borders no longer confine the diverse views that prioritize subjects of international law
. . . . different perspectives are often less identifiable with specific states than with dis-
crete branches of the law, each manifesting separate functional perceptions of what
that law should take as its primary focus.”53 The “deformalized” management of inter-
national affairs and the multiplicity of IGOs, international tribunals, and INGOs have
severely undermined the classical notion of international law as the only legal regime
governing the interactions of states and peoples.54 Currently, public international law
is experiencing a “fragmentation” of its branches.55 Interstate treaties are no longer
the only influential international legal instruments. Deformalization has triggered an
explosion of uncoordinated, specialized legal instruments that rely heavily on experts,
specialists, and groups.56 Pragmatic nonstate actors have also contributed signifi-
cantly to the reinterpretation, redefinition, and elaboration of international norms.
This has substantially extended the ambit of the otherwise self-possessed regimes of
international environmental law, international economic law, international humani-
tarian law, and international investment law, to name a few.
Transnational processes have produced a new conception of “global law.”57 For
Pierrick Le Goff, globalized legal norms, which deal mainly with the political economy,
are different from public and private international law in scope and purpose, and they
are conceptually broader than commercial transnational law.58 A “malleable” set of

51
William W. Burke-White, Complementarity in Practice: The International Criminal Court as Part of a System
of Multi-level Global Governance in the Democratic Republic of Congo, 18 Leiden J. Int’l. L. 557, 589–590
(2005).
52
Shirley V. Scott, The Problem of Unequal Treaties in Contemporary International Law: How the Powerful have
Reneged on the Political Compacts within which Five Cornerstone Treaties of Global Governance are Situated, 4
J. Int’l. L. & Int’l. Rel. 101, 102 (2008).
53
Alexandra Khrebtukova, A Call to Freedom: Towards a Philosophy of International Law in an Era of Fragmentation,
4 J. Int’l. l. & Int’l. Rel. 51, 101–102 (2008).
54
Stephan Hobe, Globalization: A Challenge to the Nation State and to International Law, in Transnational Legal
Processes 388 (Michael Likosyky ed. 2002).
55
Martti Koskenniemi, Global Governance and Public International Law, 37 Kritische Justiz 241, 242–245
(2004).
56
Id.
57
Pierrick Le Goff, Global Law: A Legal Phenomenon Emerging from the Process of Globalization, 14 Ind. J. Global
Legal Stud. 119, 121–126 (2007).
58
Id.
644   I•CON 8 (2010), 636–655

norms, driven by professionals, may eventually succeed in constructing a stronger

worldwide political order.59 The notion of global law represents a “multicultural, multi-
national, and multidisciplinary” occurrence, not a formalized legal system.60 Accord-
ingly, converging international practices and developing regimes on a global scale,
such as international environmental or trade laws, can be regarded as components of
the concept of the global law, broadly defined. Globally relevant legal rules do not rest

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on one regime, one territory, or one branch of law but on “invisible” colleges, markets,
professionals, and networks that transcend nations. Its “organizational backbone”
is not a unitary world government but an “anarchical array” of fragmented trans-
national networks connecting bureaucracies, agencies, and organizations.61 From
this perspective, the rise of global law is largely independent of the nation-state.62
However, the line between global and local is not always clear. Werner Menski cor-
rectly notes that law—state-made or not—is inherently a “global phenomenon” be-
cause the “basic constituents of ethical values, social norms, and state rules,” with the
appearance of “myriad cultural-specific variations,” are actually located in all corners
of the world.63 The increased citation of judgments and borrowing of legal doctrines
from international and foreign courts by domestic judges is a concrete sign of a devel-
oping transnational legal culture. The ongoing codification and harmonization of law
on the international plane is beneficial to lawyers who work for cross-border causes.64
Global law is not confined to a particular field or area between or beyond states.
Transnational law can be understood as a kind of global law with a smaller spatial
coverage.65 One of its core objectives is to foster “cooperation” beyond political and geo-
graphical boundaries.66 Unlike state law, transnational law is not formulated in domestic
legislatures and courts but in new arenas outside of the regulatory influence of any indi-
vidual state. Today, the establishment and interpretation of transnational norms have
become “pluralized.”67 Many transnational, rule-based activities are associated with
networks of governmental agencies, commerce, NGOs, social movements, IGOs, and
legal professionals. Informal rule systems and economic influences sometimes “super-
sede” state-driven international law in structuring the global political economy.68 Fields
of rising importance include cyber law, procurement, and transitional justice.69

59
John Flood, Globalization and Law, in An Introduction to Law and Social Theory 313 (Reza Banakar & Max
Travers eds., 2002).
60
Le Goff, supra note 57, at 127–128.
61
Stefan Oeter, Theorizing the Global Legal Order–An Institutionalist Perspective in Theorizing the Global Legal
Order, in Theorizing the Global Legal Order 81 (Andrew Halpin & Volker Roeben eds., 2009).
62
Teuber, supra note 43, at 4.
63
Menski, supra note 33, at 610.
64
David B. Goldman, Globalization and the Western Legal Tradition: Recurring Patterns of Law and Authority
35 (2007).
65
Antons & Gessner, supra note 24, at 4.
66
Hobe, supra note 54, at 108.
67
Robert O. Keohane, Power and Governance in a Partially Globalized World 214 (2002).
68
A. Claire Cutler, Private Power and Global Authority: Transnational Merchant Law in the Global Political
Economy 1 (2003).
69
William Twinning, Implications of ‘Globalization’ for Law as a Discipline, in Theorizing the Global Legal Order
43 (Andrew Halpin & Volker Roeben eds., 2009).
 Globalization and the future of the law of the sovereign state   645

3.  The rise of transnational law

3.1.  Private transnational law
The prevailing role of sovereign state law in the regulation of cross-border economic
transactions is increasingly at odds with flourishing regional and global economies.
In response to the regulatory fragmentation of the world market, the international

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business community has developed a common set of rules intended to reduce costs.70
The lex mercatoria, or merchant law, is one of the most notable models of private trans-
national law. Its roots can be traced back to the Middle Ages. The medieval lex merca-
toria was a European transnational custom that underwent a process of domestication
in history. It was absorbed into English domestic common law and then transplanted
to the United States’s legal system, where it was later codified. Finally, as an outcome
of the uploading of legal norms from the state to the international sphere, its principles
became part of commercial treaty law.71
Modern lex mercatoria is a self-governing, nonstate legal order that is tailor-made
for the resolution of transnational commercial disputes. It blends “trade usages, model
contracts, standard clauses, general principles, international commercial arbitration
with a body of expert legal writing” into a coherent and precise body of norms.72 As the
legal foundation of global capitalism, it offers business people from dissimilar cultural
backgrounds a common language to transact stably and predictably.73 Multinational
corporations now use standardized contract forms and conditions, which are recog-
nized by the participants of global business and not by officials of the sovereign state.
Much of transnational law is deeply fragmented. Despite the considerable success of
modern merchant law in building a new transnational legal culture, it is fundamen-
tally an Anglo-American and European phenomenon.74 Arbitral bodies, widely con-
sidered superior to their national counterparts in dealing with cross-border problems,
continue to serve as the chief institutions for resolving transnational commercial
disputes in many parts of the world. Moreover, transnational legal regimes are special-
ized and uncoordinated. A budding lex sportive internationalis regulates conflicts asso-
ciated with the Olympic Games, and a lex constructionis is increasingly influential in
transnational construction contracts.75 The Forestry Stewardship Council is another
relevant nonstate institution that systematically enforces norms for national envir-
onmental conditions.76 Yet another form of transnational law exists in the spread of

70
Federico Ortino & Matteo Ortino, Law of the Global Economy: In Need of a New Methodological Approach?,
in International Economic Law: The State and Future of the Discipline 99 (Colin Picker, Isabella D. Bunn &
Douglas W. Arner eds., 2008).
71
Harold Koh, Why Transnational Law Matters, 24 Penn. St. Int’l. Rev. 746, 747 (2006).
72
Benn Steil & Manuel Hinds, Money, Markets, and Sovereignty 26 (2009).
73
Cutler, supra note 68, at 35.
74
Brian Z. Tamanaha, A General Jurisprudence of Law and Society 128 (2001).
75
Andreas Fischer-Lescano & Gunther Teuber, Regime-Collisions: The Vain Search for Legal Unity in the Frag-
mentation of Global Law, 25 Mich. J. Int’l. L. 999, 1034 (2004).
76
John Gillespie, Developing a Framework for Understanding the Localization of Global Scripts in East Asia, in
Theorizing the Global Legal Order 219 (Andrew Halpin & Volker Roeben eds., 2009).
646   I•CON 8 (2010), 636–655

highly localized religious and customary laws from one country to another because
of migration, the internet and the influence of media, social movements, and NGOs.77
A notable example is the state-recognized usage of Islamic law by minority communities
in predominantly Christian nations.

3.2.  International institutional law as public transnational law

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The beginning of the twenty-first century witnessed the proliferation of international
institutions that altered the traditional politics of interstate relations.78 The World
Trade Organization (WTO), for instance, actively promoted a fundamental set of rules
and procedures for the regulation of the global economy. The WTO’s expansive elab-
oration of legal norms through dispute-resolution processes has gradually consti-
tuted a legal order that is independent of the states parties.79 Responding to the 9/11
attacks, the UN Security Council enacted a series of resolutions that gradually devel-
oped into a growing corpus of legal norms as well as a “global system of standards,
expectations, reporting, and assessment” demanding universal state action against
acts of terrorism.80
Vertical supranationalism, another sign of the globalization of the international
system, is playing an ever-more explicit role in the traditionally horizontal regime of
public international law. International human rights law is a clear example of law
that claims universal authority over all states and peoples. The European Union (EU)
is notable for producing binding supranational law in diverse areas like agriculture,
competition policy, energy, human rights, monetary affairs, public health, security,
and trade.81 EU law claims authority over a number of sovereign states at the same
time, and domestic legal authorities throughout Europe notably accept its validity.
Jürgen Habermas sees this cosmopolitan development on the regional level as posi-
tively steering peoples toward a “constitutionalized world society,” though he rightly
cautions that nation-states will still have an important role to play in the globalizing
world.82
The expansion of IGO rule making, treaty interpretation, and dispute-settlement
power has effectively turned IGOs into self-contained legal and political communi-
ties.83 Continuous state consent is no longer possible for the authorization of the mas-
sive number of IGO legislative actions. In addition, IGOs have seized opportunities to

77
Antons & Gessner, supra note 24, at 4.
78
Kenneth Abbot et al., The Concept of Legalization, in International Law and International Relations 129
(Beth A. Simmons & Richard H. Steinberg eds., 2006).
79
Id.
80
Eward C. Luck, Un Security Council: Practice and Promise 104 (Routledge 2006); Simon Chesterman, Thomas
Franck & David Malone, Law and Practice of the United Nations: Documents and Commentary 109 (2008).
81
Tamanaha, supra note 74, at 122–123.
82
See Jürgen Habermas, Ch. 11: A Political Constitution for the Pluralist World Society, in Jurgen Habermas,
Between Naturalism and Religion: Philosophical Essays (2008).
83
Jan Klabbers, The Paradox of International Institutional Law, 13 Int’l. Org. L. Rev. 1, 13 (2008).
 Globalization and the future of the law of the sovereign state   647

decide the content of major international norms and to induce states to act consist-
ently with their preferred interpretations.84 Many IGOs are capable of disseminating
new rules in the international community.85 Therefore, IGOs can be seen as key
proponents of the legalization of international governance.86 The assignment of legal
implementation, interpretation, and conflict management responsibilities to IGOs
contributes significantly to the divergence of international bureaucratic interests

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from those of their state political masters.
Furthermore, international tribunals have become centers for coordinating policies
at the global and regional level, from trade and monetary issues to labor standards and
environmental pollution.87 In effect, international courts add value to international
governance by providing important information about whether a policy or action is
permissible under the norms of the existing international political structure.88 This
enables transnational judicial actors to manufacture new norms in the name of law
clarification, to shape the expectations of other international actors, and to indirectly
condition the behavior of state actors in the future.
Moreover, the progression of “transgovernmental regulation networks” has led to
the emergence of a common, if not yet unified, set of principles governing adminis-
trative functions in areas such as security, banking, intellectual property, and invest-
ment.89 Similar shared principles seem to be developing in the area of international
adjudication as well.90 Another outcome of transnational legal cross-fertilization is
that international courts are behaving increasingly alike in their judgments on an
assortment of matters, including the rules of evidence, provisional measures, judicial
interpretation, and remedies.
However, the rise of global law does not necessarily imply that a common law of
humanity is in the making. Domestic legal systems are likely to develop similarities,
though differences in cultural, religious, and legal dimensions will remain. An example
is family law, which is rooted in profoundly local social customs and conscience.91 The
emergence of a global law on social security or religious practice is equally inconceiv-
able, at least in the foreseeable future. Moreover, universal norms that aspire to cover
the entirety of the human race are problematic. The Universal Declaration of Human
Rights is, at times, troubled by contradictory conceptions of local human rights as well
as conflicting legal norms of free trade.92 A unitary system of global law is unlikely to

84
Katharina P. Coleman, International Organizations and Peace Enforcement: The Politics of International
Legitimacy 71 (2007).
85
Michael Barnett & Martha Finnemore, Rules for the World: International Organizations in Global Politics 31
(2004).
86
Jan Klabbers, Anne Peters & Geir Ulfstein, The Constitutionalization of International Law 49 (2009).
87
Ran Hirschl, The Judicialization of Politics, in The Oxford Handbook of Law and Politics 119 (Kenneth E.
Whittington, R. Daniel Keleman & Gregory A. Caldeira eds., 2008).
88
Andrew T. Guzman, How International Law Works: A Rational Choice Theory 54 (2008).
89
See Simon Chesterman, Globalization Rules: Accountability, Power, and the Prospects of Global Administrative
Law, 14 Global Governance 39 (2008).
90
Chester Brown, a Common Law of International Adjudication 260–261 (2007).
91
See Wahab, supra note 26.
92
Goldman, supra note 64, at 302.
648   I•CON 8 (2010), 636–655

result from the current worldwide diffusion of legal phenomena.93 It is doubtful that
the international community would agree to follow one rule system, one language,
one culture, or one law.94 In this world, the coexistence and overlapping of different
norms does not eliminate local distinctiveness.

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4.  The reformulation of sovereign state law
4.1.  The sovereign state
States and their governments should not be taken for granted; they are no more than
abstractions of social life.95 Indeed, the ideas of “state,” “sovereignty,” “law,” and
“national interests” are unstable and intersubjective concepts. They are mental con-
structs that exist wholly in the human mind.96 According to Alexander Wendt, sover-
eignty is not only “a property of individual states” but also “an institution shared by
many states” and characterized by a common expectation that “states will not try to
take away each other’s life and liberty.”97 As Andrew Hurrell points out, “sovereignty
can only be meaningful if it is recognized by others.”98 Hence, traditional public inter-
national law and the state are in a symbiotic relationship. The former defines the lat-
ter, and the latter constitutes the former.
In practice, however, the status of official UN membership conceals “wide variations”
among states.99 Formal sovereign equality does not erase the immense disparities
between states in terms of economic wealth, military power, territory, population,
and the ability to exercise political and legal influence in the international commu-
nity.100 It is thus “terribly misleading” to call all states and their nominal leaders
equal “sovereigns.”101 Corrupted and brutal military regimes do not differ much
from organized groups of criminal gangsters.102 For most of its existence, state power
has been fragmented or ineffective in many areas of control and in many countries.
Many national political regimes do not even control the whole of their claimed ter-
ritories. At any rate, it is highly doubtful that the state has ever been as powerful as
many—including those who hold that global forces necessarily weaken the domestic
polity—believe.

93
Sabino Cassese, The Globalization of Law, 37 N.Y.U. J. Int’l. L. & Pol. 973, 992 (2006).
94
See Menski, supra note 33, at 3.
95
Chunying Xin, The Theory and Practice of Legal Transplant, in Diverse Legal Culture in the Age of Globaliza-
tion 4 (Chunying Xin ed., 2007).
96
See Philip Allott, The Concept of International Law, 10 Eur. J. Int’l. L. 31 (1999).
97
Alexander Wendt, Social Theory of International Politics 280 (1999).
98
Hurrell, supra note 48, at 49.
99
Twinning, supra note 30, at 51.
100
Michael Byers, Custom, Power, and the Power of Rules 35 (1999).
101
David Kennedy, Leader, Clerk, or Policy Entrepreneur?, in Secretary or General? The UN Secretary General in
World Politics 165 (Simon Chesterman ed., 2007).
102
See Vaughan Lowe, International Law 22 (2007); Phil Williams & Gregory Baudin-O’Hayon, Organized
Crime and Money Laundering, in Governing Globalization: Power, Authority, and Global Governance 139
(David Held & Anthony G. Mcgrew eds., 2002).
 Globalization and the future of the law of the sovereign state   649

Nonetheless, the sovereign state, as a powerful constellation of organized political

institutions, is deeply entrenched. It perseveres in the minds of many as a defining
element of political identity. A host of factors supports the argument that the modern
state is likely to retain its role as a prominent form of political association, at least
for the foreseeable future. States are the only “effective authorities” in the exercise of
military might.103 The contest for national resources continues to be a “crucial factor”

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that affects “struggles at other geographical and political levels.”104 The ability of state
bureaucracies to exercise substantial control over their citizens through the practices
of policing, judging, and administering remains largely intact, even in a so-called era
of “global governance.”105
In addition, domestic polities are able to simultaneously exploit the economic profits
of globalization while maintaining core belief systems, such as nationalism, to pro-
mote social relationships.106 Governments play crucial roles in structuring the rela-
tively new relationship between the global market and civil society.107 Identities and
“human consciousness” are often shaped by the very existence of state borders.108 In
this respect, national ideological constructs are much more important than any form
of global awareness in conditioning people’s concepts of who they are.
Formally, states refuse to acknowledge any higher juridical authority. However,
this does not prevent state officials from utilizing global discourse as an instrument
to consolidate their rule. The public belief that sovereignty is under stress actually
provides officials and lawyers with fuel to shift the blame to transnational forces.109
Occasionally, national politicians manipulate exaggerated accounts of transnational
influences to reassure voters that they are doing the “right thing.”110 The discourse of
“constraint or absence of choice” and the “withering” of sovereignty enable national
policy makers to pursue greater power on behalf of the state.111

4.2.  State law and nonstate legal orders

States are governed by elites, who are, of course, human beings. When humans
communicate, they inevitably express whether something is acceptable or not,112 in

103
Eric Hobsbawm, Globalization, Democracy, and Terrorism 23 (2007).
104
Wiseman, supra note 19, at 222–223.
105
Mark Laffey & Jutta Weldes, Policing and Global Governance, in Power in Global Governance 79 (Michael N.
Barnett & Raymond Duvall eds., 2005); see Richard Mohr, Local Court Reforms and ‘Global’ Law, 3 Utrecht
L. Rev. 58 (2005).
106
Andrew Hurrell, Power, Institutions, and the Production of Inequality, in Power in Global Governance 50
(Michael N. Barnett & Raymond Duvall eds., 2005)
107
Wiseman, supra note 19, at 220.
108
Nadita Sharma, The Making of the Citizen Self and Citizen Other: Canada’s Non-Immigrant Employment
Authorization, in Globalization and its Discontents 129 (Stephen McBride & John Wiseman eds., 2000).
109
Matthew Watson, Foundations of International Political Economy 205 (2005).
110
Id.
111
Rob Watts, The Right Thing: Globalization and the Policy Process—A Case Study, in Globalization and its
Discontents 78–79 (Stephen McBride & John Wiseman eds., 2000).
112
Renate Holub, Antonio Gramsci: Beyond Marxism and Postmodernism 164 (1992).
650   I•CON 8 (2010), 636–655

various formats and with varying levels of preciseness.113 As such, state politicians
and bureaucrats unavoidably make rules in the course of discharging their duties.
The foundations of the modern constitutional state rest on the assumption that people
can be politically ruled under rational authoritative propositions that speak, argue,
command, and justify in the language of law.114 Public policy is justified in rational-
legal terms.115 Philip Bobbitt indicates that there is probably no state without law.116

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Domestic law is a normative structure through which modern states are politically
constructed and governed.
For John Austin, the nineteenth-century English legal positivist, state law is
equivalent to the imperative of the sovereign. Thus, it is all that a jurisprudent should
study.117 Another leading positivist, H. L. A. Hart, conceptualized law as the combin-
ation of primary and secondary rules authorized by a “rule of recognition.”118 If we
assume that the constitutional design and political-economic conditions of each state
are somehow unique, there cannot be a single model of state law. State law serves a
variety of purposes. He asserts that it is implausible for law to emerge until the state
has attained a legitimate use of violence. Additionally, the state needs law to justify
the fight against foreign interference.119 Brian Tamanaha describes state law as a
“preeminent form of law.” 120 Because of the special position occupied by the state in
the international political space, state law has the “distinctive” ability to accomplish a
wide spectrum of plausible goals and operations.
Sovereign state law provides domestic authorities with the political legitimacy that
makes the effective use of coercive force possible. Law and politics give shape and sub-
stance to each other.121 State law is not merely a body of technical rules imposed on indi-
viduals by those who dominate the formal lawmaking process. It is also an important
integrative force in modern societies.122 This echoes the earlier view of Durkheim that
law, while at times oppressive, consistently functions to hold individuals and groups to-
gether. Weber also treats law as a tool in the governing of complicated socioeconomic
interactions.123 Gramsci’s perspective on the subject is more skeptical. He argues that do-
mestic law has much to offer the state that wants to disseminate its official worldview and
discourage other undesirable and politically incorrect customs and understandings.124

113
Wayne Sandholtz & Alec Stone Sweet, Law, Politics, and International Governance, in The Politics of Inter-
national Law 240 (Christian Reus-Smit ed., 2004).
114
Goldman, supra note 64, at 300.
115
James G. Finlayson, Habermas: A Very Short Introduction 106–109 (2005).
116
Philip Bobbit, The Shield of Achilles: War, Peace, and the Course of History 6 (2003).
117
See John Austin, The Province of Jurisprudence Determined (2000).
118
See H.L.A. Hart, The Concept of Law (1997).
119
Id., at 216.
120
Tamanaha, supra note 29, at 411.
121
Ian Ward, A Critical Introduction to European Law 227 (2009).
122
See Jürgen Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy
(1996).
123
Alan Hunt, The Problematization of Law in Classical Social Theory, in An Introduction to Law and Social
Theory 24–26 (Reza Banakar & Max Travers eds., 2002).
124
Antonio Gramsci, Selections From the Prison Notebooks of Antonio Gramsci 246 (Quintin Hoare & Geoffrey
Smith eds.,1992).
 Globalization and the future of the law of the sovereign state   651

Global political authority will likely remain fragmented for the near future. It is
true that “global governance institutions,” such as the WTO, the World Bank, the
International Monetary Fund (IMF), the ICC, and transnational networks of judges,
regulators, and environmental policy makers, claim and exercise the authority to en-
force universal rules. However, they do not seek to “perform anything approaching
[the] full range of governmental functions” or to “monopolize the legitimate use of vio-

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lence within a territory.”125 These central functions of sovereign state law are not yet
replaceable. States are likely to retain their roles as the “unique vectors of law creation
and enforcement” that focus on the preservation of regional diversity, which cannot
be guaranteed on a global scale.126 The vast array of local problems around the world
presupposes that a centralized global regulative authority is largely impossible.
Global legal norms and actors are understandably less responsive to local social
complications than are their domestic counterparts. In this respect, sovereign state
law is still prominent, even with the globalization of the international legal order.
National law’s values and doctrines typically have strong historic ties to the governed
communities, and its practices are institutionalized in politics and society. Within the
state, law ensures legitimacy through successive historical experiments. As a rela-
tively young regime, transnational law has yet to experience a comparable period of
development. This development is necessary because the moral legitimacy of trans-
national law lies in fluid communities and networks, not consolidated institutions.127
Hence, it is irrelevant whether the claims of state sovereignty to absolute supremacy
are true. Rather, it is the durability of state law that matters.
The profusion of globally focused human rights principles, extraterritorial enforce-
ment arrangements, and economic rules has paradoxically modified the reach of state
law.128 Globalization is not a unidirectional, exogenous force acting on the laws of
sovereign states. In fact, state legal actors are highly relevant in the development of
global and transnational regulatory rules. Municipal courts are becoming “global
governors,” as they regularly deliver judgments with extensive normative implica-
tions on transnational actors.129 In the U.S. alone, thousands of transnational disputes
are resolved in the federal courts every year. Judicial decisions of this sort inevitably
“allocate resources” among transnational litigants in stipulating legal jurisdiction in
various cross-border cases. Domestic court proceedings provide transnational actors
with crucial and influential information that shapes their strategic behavior.130 The
ability of state law to forge daily “human imagination” has made localities “veritable

125
Allen Buchanan & Robert O. Keohane, The Legitimacy of Global Governance Institutions, in Legitimacy,
Justice, and Public International Law 30 (Lukas H. Meyer ed., 2009).
126
Brigitte Stern, How to Regulate Globalization?, in The Role of Law in International Politics 267 (Michael
Byers ed., 2000).
127
Cotterrell, supra note 31, at 15–16.
128
Id., at 5.
129
See Christopher Whytock, Transnational Law, Domestic Courts, and Global Governance, University of Utah
S. J. Quinney College of Law Legal Studies Research Article Series (No. 07–05, 2007), available at: http://
ssrn.com/abstracts=976274.
130
Id.
652   I•CON 8 (2010), 636–655

partners” in the global order.131 Some writers claim that the legal institutions of sov-
ereign states play a “critical role” in developing the rules that govern economic activ-
ities, both local and global.132
Transnational processes are exceptionally complex. Nonstate actors do not auto-
matically emerge. States do not naturally compromise their political reach. In many
cases, transnational coalitions stem from domestic politics. They may be the offshoots

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of strategic partnerships between specialized domestic bureaucracies, business cor-
porations, civil society organizations, and other public authorities, often with an aim
of overcoming political opposition within national governments and legislatures.133
Transnational law is not a wholly new invention. It derives principles, terminologies,
and ideas from other normative systems, especially sovereign state law.
Most transnational legal practitioners and international judges who devise and
carry out nonstate legal norms received their basic professional training in national
law schools, and most are qualified in at least one domestic jurisdiction. There is no
established transnational law school in any meaningful sense. The same people also
appear before municipal courts that apply state law. High-ranking national judges
meet regularly in international conferences and serve with others on transnational
bodies. Additionally, numerous transnational legal actors are the same judges, law-
yers, legislators, and bureaucrats who have contributed to the progression of sover-
eign state law. The application of law in a globalized world is still, to a considerable
extent, at the discretion of these elites.134 State and nonstate laws are in a composite
relationship; they are much more than merely opposing forces.

4.3.  The adaptive power of state law

The processes of globalization force national legal authorities to take nonstate actors
and transnational entities seriously. In an era when multiple, overlapping legal orders
are increasingly accepted and respected, it is clear that sovereign state law is no longer
nor necessarily the most powerful legal regime in every circumstance.135 The rela-
tively diminished importance of the politically organized sovereign state has eroded
certain “modern reference points” of legal theory.136 If transnational forces are break-
ing down traditional national borders, it is debatable whether sovereign state law can
maintain the fiction of absolute sovereignty as well as its constitutional autonomy.
The contention here, however, is that even if these claims are likely to fall prey to the
changing circumstances of the world, this is by no means equivalent to the marginal-
ization of state law.

131
Yishai Blank, Localism in the New Global Legal Order, 47 Harv. Int’l. L. J. 263, 281 (2006).
132
Daniel W. Drezner, All Politics is Global: Explaining International Regulatory Regimes 34 (2007).
133
Oeter, supra note 61, at 74.
134
Catherine Dupre, Globalization and Judicial Reasoning: Building Blocks for a Method of Interpretation, in
Theorizing the Global Legal Order 123 (Andrew Halpin & Volker Roeben eds., 2009).
135
Twinning, supra note 29, at 84.
136
Cotterrell, supra note 30, at 5.
 Globalization and the future of the law of the sovereign state   653

After all, the state is a historical product of centuries of evolution. Development and
transformation have always been “the order of the day.”137 State law has a remarkable
capacity for co-opting and codifying other normative systems, assimilating them into
its own system. For instance, it is capable of catering to global trends, such as political
liberalization and social pluralization, by recognizing religious and customary norms
and giving effect to nonbinding international standards like the United Nations Dec-

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laration on the Rights of Indigenous Peoples.138 State law is not isolated from societal
developments. Judicial perceptions and legislative beliefs correlate, however slowly,
with the normative changes in society. Conversely, state law plays a proactive role in
modifying social norms by managing the ideologies of its constituent populations.139
These properties of state law are unlikely to change in any basic sense, even in an age
of globalization. Backed by the political will of the coercive state apparatus, domestic
legal systems constrain the choices of transnational actors. Furthermore, sovereign
state law shapes the evolution of global legal norms.140
As long as the institutionalization of various kinds of transnational regulatory
mechanisms endures, it is improbable that the perceived superior status of state law
can be substantiated. Even so, the reaction of state legal actors to transnational effects
should not be neglected. Governments are visibly, albeit implicitly, expanding their
regulatory powers in the exercise of their internal sovereignty when they face external
pressures.141 Networks of global civil society have provoked the state to strengthen
its intrusion into previously neglected areas, such as the environment, water, and
rights to land. These new forms of state power are frequently justified on the grounds
of economic or technical progress. State authorities do not simply ignore the trans-
national challenge to their powers. Arguably, global processes do not dominate state
institutions any more than the statist forces that defy globalization.142 In the wake of
the state’s reassertion of authority, evidence suggests that the “renationalization” of
transnational law, including the lex mercatoria, is occurring.143 It is not surprising that
state agencies, now organized as part of international or regional economic blocs, sub-
ject business actors and the lex mercatoria to greater pressure to obey national policies.
Likewise, transnational financial law produced by communities of bankers is often
reincorporated into sovereign state law.144
The persistence of state law correlates positively with the state’s coercive influence
over daily lives. State law is backed by the armed governing apparatus of the sover-
eign and is sustained by the rich resources of the state. In many instances, sovereign

137
Georg Sorensen, The Transformation of the State: Beyond the Myth of Retreat 22 (2004).
138
Stephen Allen, The UN Declaration on the Rights of Indigenous Peoples: Towards a Global Legal Order on Indi-
genous Rights?, in Theorizing the Global Legal Order 207 (Andrew Halpin & Volker Roeben eds., 2009).
139
Anne Griffiths, Legal Pluralism, in An Introduction to Law and Social Theory 309–310 (Reza Banakar &
Max Travers eds., 2002).
140
See Pizhao Che, The Globalization of Law, 4 Tsinghua L. Rev. 53 (2002).
141
Benda-Beckmann & Benda-Beckmann, supra note 41, at 70.
142
John W. Cioffi, Governing Globalization? The State, Law, and Structural Change in Corporate Governance, 27
J. L. & Soc. 572, 600 (2000).
143
Teuber, supra note 42, at 28.
144
Paul Berman, Global Legal Pluralism, 80 S. Cal. L. Rev. 1155, 1162 (2007).
654   I•CON 8 (2010), 636–655

state law continues to be the most authoritative and precise normative framework.
Nonetheless, the conventional division between state and nonstate law is fading.
Traditional formalist and statist conceptions of law are no longer adequate. Analyses
of law using the state as the exclusive focal point of the international system are un-
likely to be theoretically rigorous.145 The relationships, similarities, and differences be-
tween state law and multilevel rules should be given more attention in the academy

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and the legal profession.

5.  Conclusions
The international system has become less a state-centric, coordinative mechanism
than a collectivity of specialized transnational regimes that penetrates into the pol-
itical constitution of domestic polities. Technological advancements have acceler-
ated the migration and transplantation of legal rules and practices. Nonstate actors
like IGOs, INGOs, TNCs, and cross-border social movements have become significant
actors in international governance. They have assumed the power to create trans-
national law that governs many dimensions of the political economy that was previ-
ously monopolized by the jurisdiction of the sovereign state.
Sovereignty is at the heart of both public international law and the legal constitu-
tion of the territorial state. Substantive changes in the international system unavoid-
ably affect the shape of sovereignty and the future of state law. Indeed, in numerous
cases, the state’s effective monopoly on all legitimate coercive forces within its territory
is no longer empirically defensible. The ability of state law to regulate transnational-
ized activities like cyber disputes and cross-border commercial transactions effectively
is on the verge of decline. Nonetheless, the interplay between law and globalization
is plagued by uncertainties.146 Global forces have brought about both intolerable in-
equality and new opportunities for exchange. The concept of global law is debatable
precisely because it is both global and legal. In many respects, transnational norms
assume regulatory powers at the expense of municipal legal systems. The relation-
ship between nonstate and state law is further complicated by the deformalization of
regulation. The legal norms originating from the less formal rule-making processes of
nonstate international actors (including IGOs and lex mercatoria) is altering percep-
tions about what the notion of “law” really means.
The modern state and its law are transforming. Undoubtedly, transnational actors
have profoundly influenced the content and character of municipal legal systems.
However, the globalization of international governance is not about the marginal-
ization of one legal order by another. After all, the homogenization of law on a global
scale is largely speculative. A unified constitutional order of mankind is not in the

Griffiths, supra note 137, at 298.

145

Cassese, supra note 93, at 992–993.

146
 Globalization and the future of the law of the sovereign state   655

making, at least in the foreseeable future. However, the state may at times strategic-
ally choose to comply with international and transnational norms instead of its own
traditional state law; the adaptive power of state law should not be underestimated.
It may focus less on maintaining sovereign claims to territorial supremacy and more
on the protection of local practices and regional diversity. In the end, the fundamental
functions of state law, in structuring the institutional architecture of the state, chan-

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neling wide-ranging national social policies, and responding to localized needs and
conflicts, are irreplaceable. The interplay between the global and the local is far more
complex than mere conflict. People who enact and enforce state law frequently shape
nonstate law at the same time. Importantly, legal elites whose outlook is both local
and transnational possess the extraordinary power to decide whether state or non-
state law is to be followed in a particular policy or situation.
The public imagination of a global takeover of sovereign rights provides national
political elites with a resource to strengthen their existing powers and extend the
state’s regulatory influence into new areas. Domestic governments, which control the
armed forces and important natural and economic resources, are unlikely to give up
their vested interests unconditionally. In general, sovereign state law is strong and
flexible enough to endure the many challenges ahead. Despite globalization, sover-
eign state law is likely to retain its political influence over the lives of the vast majority
of peoples around the world.