WHAT IS REGULATION? Veronika Zapletalová
WHAT IS REGULATION?
• Selznick: „regulation as sustained and focused control exercised by a public agency over
activities that are valued by a community“
• Three different senses of regulation:
• as a specific set of commands
•as deliberate state influence
•as all forms of social or economic influence
• a ‘red light’ concept vs. a ‘green light’ concept
ISSUES ON THE REGULATORY AGENDA
• During the 20th century, a steady growth in regulation took place from the 1930th onwards. e.g. licensing of goods
and passage carryings by roads.
• In the post-war period, marketing boards followed in the cotton, crofting, sugar and iron and steel industries, and
the first US-style independent regulatory agency was established in Britain in 1954 with the Independent Television
Authority (ITA).
• During the 80ties and 90ties, much stress was placed by governments and commentators, on the problems and
costs of regulation and the case of deregulating of economy.
• By the mid-1990s regulation and deregulation had moved to positions high on the political agenda.
• By the turn of the millennium, the appropriateness of regulatory strategies and structures had become a
significant public concern, and this led to a set of responses and debates over the first decade following 2000.
• Main topics:
• governance of regulatory bodies
• effects and biases of regulatory regimes
• emergence of new technologies and products.
WHAT IS ‘GOOD REGULATION’?
• To decide whether a system of regulation is good, acceptable, or in need of reform it is
necessary to be clear about the benchmarks that are relevant in such an evaluation.
• But how to decide what is ‘good regulation’?
• Five key tests:
•Is the action or regime supported by legislative authority?
•Is there an appropriate scheme of accountability?
•Are procedures fair, accessible, and open?
•Is the regulator acting with sufficient expertise?
•Is the action or regime efficient?
FIVE CRITERIA FOR ‘GOOD REGULATION’
• The Legislative mandate
• Accountability
• Due process
• Expertise
• Efficiency Baldwin; Cave & Lodge 2012
THE LEGISLATIVE MANDATE
Claim to legacy Essence of claim Problems
Legislative mandate Authorization from elected
legislature
• Parliament’s intention may be
vague.
• Stated objectives for
regulation may exist in
tension or conflict
• Parliament may have
delegated the power to fleshout
objectives.
• Large discretions may be
given to regulators.
ACCOUNTABILITY
Claim to legacy Essence of claim Problems
Accountability or control Regulator is properly
accountable and controlled
and so is democratically
responsive
• Is the body holding to
account properly
representative?
• Is the trade-off of
accountability and
efficiency acceptable?
DUE PROCESS
Claim to legacy Essence of claim Problems
Due process Support is merited because
procedures are sufficiently fair,
accessible, and open, to expose to
democratic influence
• Who should be allowed
to participate?
• What is the acceptable
trade-off between
openness or
accessibility and
efficiency?
• Is the mode of
participation
appropriate?
EXPERTISE
Claim to legacy Essence of claim Problems
Expertise Trust to my expertise because a judgeent has
to be made on the basis of a number of
factors and variables and specialized
knowledge skills and experience have to be
applied
• Public is poorly positioned to evaluate
expertise
• Difficult to expert to explain reasoning of
judgement to lay persons.
• General distrust of experts and arcane
language
• Public desire for openness and accountability.
• Conflicts between experts undermine public
confidence.
• Public may see experts as self-interested or
captured.
• Public skeptical of neutrality of regulatory
decisions where certain parties gain
advantages.
EFFICIENCY
Claim to legacy Essence of claim Problems
Efficiency Legislative mandate is being implemented
efficiently. Efficient results are produced.
• See problems of legislative
mandate claims.
• Conflicts with legislative
mandate may arise.
• Distributional questions may
be begged or left out of
account.
• Measuring efficiency is
difficult.
MEASURING REGULATORY QUALITY
• The cumulations of these benchmarks is very useful in the case of
understanding how the ‘good regulation’ should be structured.
• On the other hand, the disadvantages of the cumulations of benchmarks is
that divergent and inconsistent approaches to the pursuit of regulatory quality
can be encountered not merely between different jurisdictions, but within
individual governmental programmes.
• The way forward is probably to deal more rigorously with trade-offs between
objectives and values.
REGULATION AND THE EUROPEAN UNION
• The two basic trends could be recognized inside the EU:
•growing EU-level involvement in regulatory activities
•separating regulatory activities from other executive functions
• How to describe the EU regulatory state?
• The three dynamics could be recognized here:
•the rise of EU agencies
•the evolving character of regulatory decision making in the cases of competition and the ‘Lamfalussy
process’
•the conflicts between expertise and politics
THE RISE OF EU AGENCIES
• The idea of agencification has become increasingly prominent in the EU regulatory
landscape since the 1990s
• The agencies became a particularly prominent feature of the EU governance agenda post
2000.
• Giandomenico Majone: „the authority of these EU-level regulatory agencies in not based
on formal legal sources, but on their ability to provide credible information“
• The rise of agencies could be seen as a solution to the European Commission’s credible
commitment problem as identified by the member states.
LAMFALUSSY PROCESS
THE CONFLICTS BETWEEN EXPERTISE AND POLITICS
• Connected to the tensions that regulatory regimes face when there is
uncertainty about the interpretations of the precautionary principle.
• Precautionary principle to risk management states that if an action or
policy has a suspected risk of causing harm to the public, or to
the environment, in the absence of scientific consensus (that the action or
policy is not harmful), the burden of proof that it is not harmful falls on those
taking that action.
• E.g. Pfizer case from 2002
REGULATION AND DEVELOPMENT
Three key lines of argumentation focus on:
- the dominance of economic interaction and interdependence in shaping domestic
regulation
- the claim ‘nothing new under the sun’ - in the world of development, some states and
firms are more autonomous and dominant than others and the remainder are merely
at the receiving end of regulatory changes
- the transformative character of contemporary globalization and the processes
whereby technological and social changes encourage complex interaction effects
with the ‘old’ world of established economic and social power.
THANK YOU FOR ATTENTION! zapletal@fss.muni.cz