Regulation

A gravity model for regulation?

Most people think “gravity models”, such as the gravity model of trade, are about kilometres on a map. Trade does often fall with physical distance. But research shows something else matters a lot: cultural distance. Shared language, legal heritage, and political norms pull countries together and make policy ideas move faster than geography alone would suggest.

In trade theory, we talk about “multilateral resistance” and “border effects”, which are frictions above distance. These frictions are often cultural and institutional. Studies show how common language, colonial ties, and legal systems increase cross-border flows. International business research confirms that gravity works through institutional and cultural proximity, not just geography.

The same applies to regulation. Regulatory contagion often spreads to the most familiar countries, which are not always the nearest ones. For example, proposals for a generational smoking ban appeared in Tasmania as far back as 2000, aiming to ban tobacco sales to anyone born in the new millennium. The “generational ban” idea re-emerged in various New England towns in over the following decade and a half, before it went national in New Zealand in 2022, followed by the UK in 2023. These countries share a language, parliamentary systems, strong public health traditions, and a common-law heritage. That cultural and institutional familiarity made the concept politically easier to adopt.

This is not to say that a shared culture and language is the only factor for regulatory contagion. Generational bans have also surfaced in places with very different systems, such as Malaysia, which proposed a nationwide ban in 2022 (it was later struck down). In these cases, other factors — local activism, domestic public health priorities, political agendas, and global treaty commitments — might have helped push the idea, despite cultural and institutional distance from earlier adopters.

I think the takeaway for corporate and regulatory affairs professionals is this: when scanning for regulatory trends internationally, do not rely on lazy assumptions based on regional trends. It is not always about who is nearby, but often which jurisdictions regulators look to for leadership and ideas.

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Regulation

In praise of unsexy innovation

This post is adapted from a post on my LinkedIn profile.

A Waymo vehicle on the street in San Francisco.
The driverless Waymo taxicab that took us around San Francisco last month

A month after leaving California, the hotel and car hire still haven’t finalised the charge on my credit card. Both are still sitting as pending authorisations.

This is normal in the US, but it’s astonishing when you’re used to the UK and Europe, where card payments settle in a day or two at most, and instant payment notifications are quite common.

It also captures a paradox of Californian tech. I could ride in a Waymo with no driver through steep, messy streets in San Franciso. Yet the payments infrastructure struggles to do something as basic as clearing a bill.

We talk a lot about learning from Silicon Valley. But sometimes the lesson runs the other way. Britain’s payments and fintech infrastructure is an order of magnitude faster, cleaner and more reliable. That’s an asset we rarely celebrate.

Are we too quick to idolise visible innovation while undervaluing the invisible systems that already work?

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