DIGITAL BOUNDARIES: DOMESTIC PREFERENCES AND DIGITAL TRADE POLICY

Abstract

The emerging digital economy holds tremendous economic and transformative potential for countries, industries and populations. Powered by data, the digital economic order thrives on seamless information flows that connect the world via the Internet. However, as frictions emerge between trade and Internet norms, states have asserted regulatory sovereignty over their jurisdictions, drawing digital boundaries along their physical borders. What are their reasons for this? In the current literature, such restrictiveness is often attributed to state preferences, which range from infant industry protection to national security. Yet, domestic legislation is not a one-sided affair where the state can enact regulations on a whim. Domestic interest groups have a role in this policymaking process, in which they provide input and communicate their preferences. As such, I will be adopting a domestic political economy approach to address why countries implement restrictive digital policy. Drawing on collective action theory, I argue that concentrated interests will have greater influence over diffuse interests in digital policy. Not only do the latter face difficulties to mobilise, they also tend to lack policy expertise or resources that could support their engagement with policymakers. This hypothesis seeks to analyse the influence of emerging actors and industries in the digital economy, such as electronic commerce, cloud computing and civil society organisations supporting Internet freedoms. For this paper, I examine two case studies, Indonesia and the Philippines, and the interaction between government and societal groups in the area of data policy. Future work can further explore the interest alignment of societal groups and how they impact regional digital governance.