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This article examines how the regulatory policies of countries are interdependent. In particular, it identifies three modes of interdependence: competitive, coordinative, and informational. In the competitive mode the essential structure of interdependence is for countries to attempt to have distinctive policies that provide some advantage over other countries, but where the equilibrium set of policies is suboptimal for all. In the coordinative mode, there is an advantage for all countries to adopt the same policy, but exactly which policy is adopted may have significant distributional consequences. Lastly, in the informational mode, the choices and experiences of countries produce informational externalities, pointing the way for other countries to policy decisions. This article examines the logic underpinning each of these modes of interdependence, and draws out the governance implications of each mode.
