What happens to a public, domestic institution when its authority is delegated to a privately run, transnational institution? I argue that outsourcing traditionally national legal responsibilities to transnational bodies can lead to the stagnation of domestic institutional capacity. I examine this through a study of international commercial arbitration (ICA), a widely used system of cross-border commercial dispute resolution. I argue that ICA provides commercial actors an “exit option” from weak public institutions, reducing pressure on the state to invest in capacity-enhancing reform. I find that the enactment of strong protections for ICA leads to the gradual erosion of the capacity of domestic legal institutions, particularly in countries with already weak legal systems. I test the mechanism driving this dynamic using dispute data from the International Chamber of Commerce. I find that pro-arbitration laws increase the use of international arbitration by national firms, suggesting that firms use ICA as an escape from domestic institutions. This article contributes to debates on globalization and development as well as work on the second-order effects of global governance institutions.

中文翻译：

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分拆国家：全球私人治理时代的法律发展

当一个公共的国内机构的权力被委托给一个私营的跨国机构时，会发生什么？我认为，将传统上的国家法律责任外包给跨国机构可能会导致国内机构能力的停滞。我通过对国际商事仲裁（ICA）的研究来检验这一点，国际商事仲裁是一种广泛使用的跨境商事争议解决系统。我认为 ICA 为商业行为者提供了从薄弱的公共机构中退出的选择，从而减轻了国家投资能力增强改革的压力。我发现，对 ICA 实施强有力的保护会导致国内法律机构的能力逐渐受到侵蚀，特别是在法律体系本来就薄弱的国家。我使用国际商会的争议数据测试了驱动这种动态的机制。我发现支持仲裁的法律增加了国内公司对国际仲裁的使用，这表明公司利用 ICA 来逃避国内机构。本文为关于全球化和发展的辩论以及全球治理机构的二阶效应的研究做出了贡献。