Must a Conflicts Approach be Narrow-minded?

This week I had the pleasure of presenting my forthcoming article, “Managing Regulatory Arbitrage: A Conflict of Laws Approach” at the Tulane law school. (A description of the paper is here.) Tulane is a faculty with deep expertise in Conflicts and comparative law so I was really excited to get reactions of colleagues there.
One particular criticism of the paper, from Professor Adeno Addis, really got me thinking. He asked, what about the interest of third parties to derivatives contracts? He was thinking especially about the interests of the developing world in financial transactions which produce considerable externalities beyond the North Atlantic region where most of the derivatives market is based.
This is an important criticism. It is true that a conflict of laws analysis works its magic often by defining the “interests” at stake in a transaction in a quite narrow way such that wider third party interests are excluded. While many critics of US post-realist conflicts analysis have attacked the American approach on this basis, it is also the case that vested rights approaches and civilian approaches narrowly define the relevant interests as the “private interests” of specific rights holders without regard to the more “public” concerns of a wider class of third parties.
I often hear a more simple version of this criticism that goes like this: the technicalities of conflicts obscure the real politics of financial regulation. They turn fundamental disagreements, say, about whose interests matter more–those of the big financial firms that sell derivatives or those of the consumers of those products–into a bunch of technical mumbo jumbo. This is wrong, the criticism goes, because we should talk directly and explicitly about what is really at stake, rather than hiding the ball. I understand but disagree with this criticism. As I have suggested elsewhere, sometimes using the vocabulary of legal technique can be useful, as long as everyone understands that it is only a vocabulary, a way of channeling and framing a political conversation.
But Professor Addis’s criticism is more challenging. He reframes the political point in a way that conflicts can and must deal with it–what about third party interests?
By way of the beginnings of a response, I would say just that–that conflicts can and must deal with third party interests. There are plenty of conflicts cases in which such interests are recognized as legitimate and folded into the conflicts analysis, and there is nothing that prevents sophisticated decision-makers from doing this even more. In fact, in the hypothetical discussed in my paper, the SEC in effect evokes the third party interests of owners of US real estate who saw their investments devastated by the impact of the mortgage backed securities market. But it is up to judges or regulators to think actively, with technical sophistication and legal imagination, about such interests, and about the trade-off between “resolving conflicts problems” and taking a richer and more complete picture of the interests at stake in any legal issue.