Governance Interoperability Cost

Definition

The aggregate coordination overhead imposed when regulatory regimes addressing comparable policy objectives lack structural interoperability across jurisdictions. Distinct from compliance cost — a country can have strict regulation with low GIC (structurally coherent) or lenient regulation with high GIC (structurally fragmented).

Formula

Example

A fintech firm operating across Australia, Singapore, and the UK faces GIC not from the strictness of each regime but from the structural incompatibility of their licensing, reporting, and escalation architectures.

Source

GIC Section 1