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Between International Standards and Transnational Greed

Providing Transnational Rule of Law in Times of Economic Crisis


The article discusses the process of transnationalisation of the rule of law in times of globalisation. The economic crisis serves as a stage for our analysis, in which the preconditions of the rule of law are challenged. The Austrian case study focuses on the breakdown of the Austrian banking systems and enables us to understand how international standards and European regulation affect the domestic concept of the rule of law, especially in terms of helping to re-establish the rule of law in times of crisis. The example provides insights into how, in the specific interrelation between the domestic rule of law shaped by Austrian legal culture and the implementation of international and European elements of the rule of law, a unique transnational concept of the rule of law is developed. The article concludes that it is necessary to understand the rule of law in a global context in its plurality of transnational rules of law, which depend on the unique interrelation between the respective national legal systems and the international level.

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  1. See Schiff Berman (2013), who stresses the hybridity in a post-sovereign deterritorialised world.

  2. See Tamanaha (2011), pp. 1–17 in the context of the legal pluralism debate in developing countries. Global legal pluralism makes the implications for the rule of law even more complex.

  3. While Peerenboom (2009), p. 7 argues that we should ‘give up the quest for a consensus definition or conception of rule of law and to accept that it is’, Tamanaha (2004), p. 113 emphasises that the ‘rule of law cannot be about everything good that people desire from government’ used by many different actors in different ways for different purposes.

  4. Sobota (Sobota 1997) lists more than 100 elements of the rule of law from a German perspective.

  5. Dicey (1982), pp. 179–200 provides one of the most influential and most debated concepts of the rule of law.

  6. See, with regard to the different philosophical approaches, Krygier (2012), pp. 233–249.

  7. As Krygier (2008), pp. 68–69 stresses, it is important to focus on the function and not on the form.

  8. The article does not intend to re-negotiate the understanding of the rule of law in general, but rather to evaluate the effects of the economic crises on the different understandings on the rule of law.

  9. Sajó (1999); see also Tamanaha (2008), p. 4–5.

  10. See Bingham (2011) pp. 90–109.

  11. See the discussion on substantive version of the rule of law in Tamanaha, n. 3, pp. 102–113.

  12. For a precise analysis from a constitutional perspective, see Teubner (2012).

  13. See e.g. Loughlin (2010), pp. 315–324.

  14. See regarding traditional international law e.g. McCorquodale (2016), pp. 277–304 or with regard to informal international law Duquet et al. (2014), pp. 75–95; see also the discussion about defining the rule of law at <>. Accessed 14 September 2016.

  15. See Sect. 4.

  16. See also Kleinfeld and Nicolaïdis (2008), pp. 139–170.

  17. See the manifold examples in von Bogdandy (2010).

  18. Bingham argues that the rule of law requires compliance by the state with its obligations in international law as well as in national law (Bingham, n. 10, p. 110).

  19. See Mattei and Nader (2008), who illustrate how the international rule of law fosters inequalities.

  20. Thus, the article does not aim to define an international rule of law or to provide comparative analysis if the rule of law domestically, but rather to create an interrelation between the two layers. Peerenboom, n. 3, p. 8 already mentioned that ‘[a]nother area where there needs to be more theoretical and empirical work is in the relationship between international rule of law and domestic rule of law’.

  21. Nollkaemper 2009, pp. 76–77 is using the notion of an ‘internationalized rule of law’ for this ‘in-between’ element of the rule of law.

  22. See e.g. Walker (2008), pp. 119–138; Beaulac (2008), pp. 197–223; Goldston (2009), pp. 38–45.

  23. Noelkaemper, n. 21, p. 76.

  24. See <>. Accessed 15 March 2016; see also the critics of such an approach, Mattei and Nader (2008).

  25. The constitution-making process, however, resulted in other problems. See e.g. Landemore (2015), pp. 166–191, Oddsdóttir (2014), pp. 1207–1220; B. Thorarensen, ‘Why the Making of a Crowd-Sourced Constitution in Iceland Failed’, <>. Accessed 15 March 2016.

  26. The role of the international economic interests shall not be underestimated in the Argentinian context.

  27. See Luhmann (2015).

  28. Luhmann (2007), 390.

  29. Obviously an economic crisis not only affects the legal system of a country, but also other social systems, like the political system or even the academic system. In many countries, universities have come under pressure because of cuts in state funding, the lack of fee-paying students or the limited investments by corporations.

  30. See e.g. Cramme and Hobolt (2015).

  31. See Sect. 1.

  32. See insight to the Austrian banking system in Cordt et al. (2015).

  33. See the rise and fall of the Austrian social partnership in Tálos (2006), pp. 425–442.

  34. See Sect. 3.2.2.

  35. See the traditional understanding of the Austrian bank secrecy in Liebscher (1984), pp. 253–255.

  36. See in Cordt et al., n. 32.

  37. Foreign Currency Loans are a high-risk banking model which was used by Austrian banks on a regular basis, especially in the context of private financing of houses. There was a significant lack of information about the risks for the consumers.

  38. These three scandals are just three examples of significant damages of Austrian banks. But further examples could be found easily. Another remarkable scandal refers to the Meinl bank, which still makes courts busy and led to bizarre legal action by this bank on the basis of a BIT (bilateral investment treaty) between Austria and Malta.

  39. See Sect. 3.1.

  40. See <>. Accessed 14 September 2016.

  41. See <>. Accessed 14 September 2016.

  42. See n. 40.

  43. For the broader picture relating to the effects of Jörg Haider and the Freedom Party in a European context, see Lachmayer (2016).

  44. See <>. Accessed 14 September 2016.

  45. See n. 44.

  46. See regarding the impact of the economic crisis on social welfare in Europe O’Cinneide (2014), pp. 169–201.

  47. See e.g. the Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD IV) or the Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms (CRR). See also <>. Accessed 14 September 2016.

  48. <>. Accessed 14 September 2016.

  49. <>. Accessed 14 September 2016.

  50. See regarding the role of the rule of law in informal international law making Duquet et al., n. 14, pp. 75–95.

  51. See already the Directives 89/646/EC; 2000/12/EC; 2002/87/EC; 2006/48/EC; see also Raschauer (2010), pp. 161–265.

  52. See Kerres and Pröll (2009), pp. 623–626.

  53. <>. Accessed 14 September 2016.

  54. Günther and Jergitsch (2016), pp. 106–118.

  55. See Sect. 3.1.

  56. See Abele et al. (2016), pp. 12–23.

  57. <>. Accessed 14 September 2016.

  58. See n. 44.

  59. <>. Accessed 14 September 2016.

  60. <>. Accessed 14 September 2016.

  61. Stability Fee Act, Federal Law Gazette I 2010/111.

  62. There was an academic discussion about the constitutionality of the bank levy in Austria (see e.g. Hofko (2011), pp. 936–941). The Austrian Constitutional Court, however, confirmed the constitutionality of the bank levy (see Austrian Constitutional Court 14. 12. 2011, B 886/11).

  63. See the report: <>. Accessed 14 September 2016.

  64. See Article 53 Austrian Constitution, amended by Federal Law Gazette I 2014/101.

  65. <>. Accessed 14 September 2016.

  66. Austrian Constitutional Court 28.7.2015, G 239/2015, see also Raschauer (2015), pp. 928–930, Wutscher (2015), pp. 586–592, Potacs and Wutscher (2014), pp. 248–259.

  67. See Adams 2014.

  68. See Sec. 2 para. 4 Federal Budget Act and Article 2 of the Agreement of the Federation, the states and the municipalities on the Austrian Stability Mechanism 2012, Federal Law Gazette I 2013/30.

  69. These developments especially refer to Raiffeisen International Bank and the Erste Group.

  70. See the theoretical concept of an international rule of law by Beaulac, n. 22, pp. 197–223.

  71. Noellkaemper, n. 21, pp. 76–77 identifies certain contents of an internationalised rule of law, but does not focus on the different domestic concepts of the rule of law.

  72. See the comprehensive analysis by Cramme and Hobolt (2015).

  73. See in this context from a UK perspective e.g. Ewing (2010).

  74. See regarding an even stronger approach towards pluralism in the European context Avbelj (2012), pp. 400–409.


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Correspondence to Konrad Lachmayer.

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Lachmayer, K. Between International Standards and Transnational Greed. Hague J Rule Law 8, 291–309 (2016).

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  • Transnationalisation
  • Rule of law
  • Austria
  • Limiting government
  • Independent judiciary
  • Equality