The Brussels Effect: The Rise of a Regulatory Superstate in Europe

Despite its economic and political struggles, the European Union exerts considerable influence over worldwide markets through its regulatory and legal framework, writes Professor Anu Bradford in a new law review article.

New York, January 8, 2013—The European Union has made headlines recently as it struggles to deal with the global financial crisis and its impact on EU member nations. But Columbia Law School Professor Anu Bradford is drawing attention to the economic and political union for a different reason: Its outsized and underestimated ability to influence worldwide markets through the adoption of its regulatory and legal framework.

Professor Anu Bradford
 In “The Brussels Effect,” a law review article just published in the Northwestern University Law Review, Bradford writes that rules and regulations promulgated in the European Union have “penetrated many aspects of economic life within and outside of Europe through the process of ‘unilateral regulatory globalization,’” a phenomenon she calls “the Brussels effect.”
Unlike in political globalization, in which regulations are adopted after political bodies agree to adhere to them, or unilateral coercion, in which regulations are adopted through the threat or use of sanctions, unilateral regulatory globalization occurs through market mechanisms.
Because the EU has the world’s largest internal market, Bradford writes, companies that want to trade with the union must decide whether to adopt one set of standards for Europe and another or multiple other sets of standards for the rest of the world. In most cases, they choose to adopt one standard—that of the EU. Therefore, despite its financial and political shortcomings, the EU is a major force in the global economy.
“While traditional tools of power have waned in importance—it is increasingly difficult to exert influence through raw military power or rely on economic sanctions or conditional incentives—regulatory power that the EU possesses is more durable, more deployable, and less easily undermined by others,” Bradford writes.
Bradford joined the Columbia Law School faculty in July. A scholar of international economic law and European Union law, she co-directs the Law School’s Center for European Legal Studies. Earlier in her career, she practiced with Cleary Gottlieb Steen & Hamilton in Brussels. In 2010, Bradford was named a Young Global Leader by the World Economic Forum.