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Economists on the other hand argue that differences in national rules and regulations are just one factor which determine comparative advantage and many writers have argued that "regulatory competition" is positively beneficial as a way of selecting the best norms, and cite the writings of Tiebout in support of this claim.
Regulatory competition can be defined as the process where regulators deliberately set out to provide a more favourable regulatory environment, in order either to promote the competitiveness of domestic industries or to attract more business activity from abroad. The setting of national regulations in response to the actual or expected impact on internationally mobile goods, services or factors on national economic activity may lead to a form of arbitrage by economic actors across the various market opportunities...
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