The California effect is the shift of regulation—such as antitrust, environmental, data privacy, and artificial intelligence regulations—toward political jurisdictions with stricter regulatory standards.[1][2]
Terminology
Sometimes the expression “California effect” is used to describe the shift of regulation toward regulation introduced in California, which typically involves stricter regulatory standards. The expression “Brussels effect” is used in a similar sense, to describe the shift of regulation toward regulation introduced by the European Union.[3]
A distinction is sometimes made between de jure and de facto versions of the Brussels effect. EU regulation may cause countries outside the EU to adopt similar standards, and these standards may in turn influence firms operating in these non-EU jurisdictions. This is an example of de jure Brussels effect, because the firms are legally required to comply with these new standards. In other cases, however, the firms may voluntarily decide to comply with EU law even in the absence of similar regulation outside the European Union, typically because doing so simplifies their business processes. An example is firms that modify their websites to comply with General Data Protection Regulation (GDPR) not just in the EU but globally, even when not legally required to do so.[4]
Further reading
Bradford, Anu (2021) The Brussels Effect: How the European Union Rules the World, New York: Oxford University Press.
Vogel, David (1995) Trading up: Consumer and Environmental Regulation in a Global Economy, Cambridge, Massachusetts: Harvard University Press, ch. 8.
Related entries
AI governance | European Union | global governance | international relations | law | policy | standards and regulation
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Vogel, David (1995) Trading up: Consumer and Environmental Regulation in a Global Economy, Cambridge, Massachusetts: Harvard University Press, p. 259.
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Princen, Sebastiaan (1999) The California effect in the EC’s external relations: a comparison of the leghold trap and beef-hormone issues between the EC and the U.S. and Canada, ECSA Sixth Biennial International, p. 1.
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Bradford, Anu (2021) The Brussels Effect: How the European Union Rules the World, New York: Oxford University Press.
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Engler, Alex (2022) The EU AI Act will have global impact, but a limited Brussels effect, Brookings, June 8.
What I’ve written as the body text is basically a placeholder. I think relying so heavily on Wikipedia quotes is probably against the norms for Forum entries.
If and when someone does have time to improve this entry, I’d suggest:
Noting how this seems most relevant and most often discussed in EA via the potential importance of the Brussels effect in particular for AI governance
Noting that that may be a major factor in how much to prioritize working in the EU to influence AI policy
It’s plausible this should be renamed/rescoped to Brussels effect or to some name combining or covering both the California effect and the Brussels effect. But my current (low-confidence) understanding is that the California effect is actually a broad category that the Brussels effect is one instance of, such that the current name covers the Brussels effect as well.
This is also my impression.
One thing I forgot to flag earlier is that, despite the California effect being (I think) a broader category that includes the Brussels effect, the Brussels effect seems the more commonly discussed and recognized term in EA and AI governance circles. So it’s still plausible that Brussels effect is a better name and the entry should just mention that this is a subtype of the California effect and that posts about the latter are also in-scope.
(But I’m ~agnostic and it probably doesn’t matter much which option we go for.)