Private Ordering

Abstract

The sharing of regulatory authority with private actors ("private ordering") has lengthy historical precedent and, in recent years, has been rapidly expanding in scope, domestically and abroad. Nowhere is its expansion as prevalent as in the commercial, financial, and business sector ("commercial private ordering"), such as the recent entrusting by the U.S. government to the Internet Corporation for Assigned Names and Numbers (ICANN), a private nonprofit corporation, with the task of controlling the Internet domain name system and the assignment of Internet protocol numbers, or the entrusting by the Securities and Exchange Commission to the privately organized Financial Accounting Standards Board with the power to promulgate public accounting standards.

Whereas traditional private ordering derives its legitimacy from costly procedural safeguards (essentially the same as those protecting the legitimacy of administrative agency rule-making), the purported legitimacy of commercial private ordering derives from separate premises: that the goal of commercial regulation is efficiency, and that private institutions can operate more