*{Redefining the roles of business and government for the 21st century [http://www.weforum.org/site/knowledgenavigator.nsf/Content/Redefining%20the%20roles%20of%20business%20and%20government%20for%20the%2021st%20century?open&topic_id=300250000&theme_id=300]

            29.01.2000

            Annual Meeting 2000}

            Opening the session, moderator Esther Dyson, Chairman of EDventure Holdings, USA, said governments used to have a monopoly in certain areas while business competed against business, but now governments and regulatory agencies are competing for business. Cancelling a credit card sale may be a more effective remedy for dissatisfied Internet customers than going to the regulators.

            William Daley, US Secretary of Commerce, said it is difficult for any country to effectively enforce its laws when multinationals can move anywhere for optimal tax and regulatory conditions. Governments can't innovate as fast as the private sector, but this is nothing new. The Internet accelerates these trends. Bilateral agreements are one approach to regulation but are limited in scope, and multilateral institutions are "even slower than governments". Self-regulation with the government playing a back-up role had worked in the case of the stock exchanges, but Seattle showed that deep suspicions can be aroused when governments hand over regulatory responsibilities to others.

            Rolf-Ernest Breuer, Co-Chairman of the Annual Meeting 2000 and Spokesman of Deutsche Bank's Group Board, said the idea that financial markets are moving beyond government's reach and that businesses have to be reined in is based on the premise that the interests of government and business diverge. But both are interested in the stability and other conditions that foster growth and employment, and efficient financial markets are a prerequisite for economic growth. The interrelationship is healthy, although governments may react nervously when the markets show them a red card. Believing in market transparency and the caution of investors, he also said transparency could be improved in governments and NGOs. 

            Takashi Imai, Chairman of Keidanren - Japan Federation of Economic Organizations, observed that globalization is irreversible but the inability of workers to cross boundaries freely means that demands on governments, for job security for example, will grow and will also be expressed through NGOs, as in Seattle. He said inflows of FDI have a large influence on domestic employment and can dispel feelings of job insecurity.

            Richard A. Grasso, Chairman and Chief Executive Officer of the New York Stock Exchange, cited the moves for supervision of global financial markets as a model reflecting the convergence of business and government. The answer is a mosaic that allows the private sector to bring self-regulation together with government incentives and disincentives on a global format. The NYSE plays its role in the oversight of issuers in partnership with supervisors around the world. No one set of standards fits all. On the question of regulating Internet companies, he said investors penalize issuers who seek regulatory arbitrage in safe havens. Companies that disclose what they do with people's data, for instance, can charge a premium with a discount against those that don't. Responding to questions from the floor, Grasso and other panellists said the WTO should also become more transparent.

            Speaking as chairman of the Internet Corporation for Assigned Names and Numbers (ICANN), Esther Dyson said ICANN was established as part of the transition from management and funding of the Internet by the US government to regulation of the Internet by itself. She described ICANN as an experiment, a new form of non-governmental, not-for-profit organization regulating a small part of the international infrastructure. One of the choices facing regulators involves how much protection the investor needs versus how much disclosure is necessary for investors to protect themselves. Although she didn't summarize the session because it "hadn't reached many conclusions", she suggested putting an NGO representative on the panel next time.                  

                  *{Contributors:       Breuer Rolf-Ernst
                  Daley William M.
                  Dyson Esther
                  Grasso Dick
                  Imai Takashi
                  Sinha Yashwant}