Regulating globally, implementing locally: The financial codes and standards effort

This article explores the effort, during the last decade, to develop a set of global standards and codes to govern international capital markets. I posit that, despite global capital market pressures, this effort should have limited success in low and middle-income countries. Drawing upon a historical institutionalist framework, I suggest that domestic political institutions, as well as interests, often will lead to the failure of governments to implement global codes and standards. After describing briefly the motivations for and substance of the standards and code project, I summarize trends in the national implementation of such standards. I then point to several instances of policy feedback, in which the existing domestic regulatory institutions in middle-income countries rendered the adoption of new international rules difficult, technically as well as politically.