Governance Interoperability Cost: A Framework and Index for Measuring Cross-Border Regulatory Coordination in Advanced Economies

Roshan Ghadamian
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Roshan Ghadamian: Institute for Regenerative Systems Architecture

IRSA Working Papers from Institute for Regenerative Systems Architecture

Abstract: Debate about regulatory burden is usually a debate about how much regulation there is. This paper argues that in integrated advanced economies the more consequential variable is how regulatory systems fit together, and names it Governance Interoperability Cost (GIC): the aggregate coordination overhead imposed on organisations when regimes pursuing comparable objectives lack structural interoperability across jurisdictions. GIC is distinct from compliance cost. Compliance cost answers what is required to meet the standard; interoperability cost answers what is required to reconcile several standards that are substantively similar but procedurally distinct. High standards do not imply high GIC, and moderate standards implemented divergently can generate a great deal of it. Five mechanisms generate it — regulatory duplication, interpretive divergence, reporting non-standardisation, escalation-pathway multiplicity and liability asymmetry — and they compound rather than add. The paper specifies a proxy index, GIC = FP - IC, over friction pressure and interoperability capability, with sources, normalisation, weights and a dataset schema. âš ï¸ No country is scored. The index is specified and left unpopulated, and its limitations are stated: the proxies capture regulatory activity and domestic institutional quality rather than cross-jurisdictional coordination itself. The claim is that reframing cross-border friction as architecture rather than as a deregulatory question identifies reductions in overhead that cost no regulatory integrity.

Keywords: governance interoperability cost; regulatory coordination; compliance cost; cross-border regulation; regulatory architecture; index construction (search for similar items in EconPapers)
JEL-codes: F13 F15 K20 L51 O43 (search for similar items in EconPapers)
Date: 2026-02
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