additionally on the institutional components of domestic markets, that is, the domestic institutions
that create markets in the first place and in which they are embedded. These institutions
determine a polity’s regulatory capacity, the missing link between market size and market power.
We introduce the term effective market power to highlight the role that regulatory capacity plays
in transforming latent market power vested in market size into an effective tool for international
regulatory influence.
The focus on regulatory capacity and the domestic institutions that transform market size
into effective market power is based on recent contributions in the field of comparative political
economy. The study of comparative political economy has undergone a micro-institutional
revolution whose insights, unfortunately, have barley found their way into the field of
international political economy. Most importantly, we build on recent work that examines the
political and economic implications of sector-specific regulatory institutional structures against
the background of broader, polity-level variation in regulatory styles and policymaking
capabilities. Because of the intricate linkages among domestic and international market
regulation, this area is particularly well suited to explore contributions of domestic micro-
institutional analysis to examinations of international problems. In addition to shedding light on
critical determinants of influence patterns in international market regulation, a principal goal of
this study is therefore to intensify the dialog between two closely related fields – comparative
political economy and international political economy – that have hitherto insufficiently drawn
on each others’ strengths and insights.
This paper begins with an analysis of existing International Relations literature that
stresses the role of market size as a proxy for market power and derives empirically verifiable
expectations from it. Section two develops the effective market power perspective by defining
regulatory capacity and introducing qualitative measures for its assessment in a given industry,
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Convention