Introduction to Regulating Law

Lawyers’ Ethics and Professional Responsibility, 2015

Self-regulation is justified by a situation of market failure. An example is where consumers cannot judge the product they are buying. This is usually the case with legal services. This is a situation of information asymmetries, where the producer knows more than the purchaser. Self-regulation is a good solution when private law cannot correct this problem adequately or cheaply enough, or where conventional public regulation is less good or more expensive. 2 The preference for self-regulation over public regulation largely stems from the expertise held by the regulated sector. Formulating, implementing and amending standards is arguably cheaper for a self-regulatory agency than an external agency. Monitoring and enforcement costs are reduced and borne by the industry, rather than the taxpayer. There are many concerns about the legitimacy and economic effect of self-regulation. Self-regulatory agencies that are not democratic cannot legitimately represent their membership. The accumulation of too many functions, from rule formation to enforcement for example, offends the principle of the separation of powers. Restrictions on entry to selfregulated industries, and 'rules of etiquette', can restrict the supply of services. This enables those in self-regulated industries to claim higher profits, 'rents', than would be available in a competitive market. ii. Enforced Self-regulation Concern that self-regulation can too easily favour the regulated group have led to adjustments in regimes. Schemes whereby industries make their own rules, but have them approved by public agencies, are potentially more efficient and less costly than direct state regulation. Such schemes have been called 'enforced self-regulation'. 3 These regimes are often supported by compliance officers within firms who are under an obligation to report regulatory infractions. Regimes involving state monitoring were originally advocated as a way of dealing with self-regulatory failure. Enforced self-regulation can be accompanied by strategies to increase competition and reduce rents. Competition between self-regulatory agencies can be sufficient to reduce prices, but this alone is not a solution. Ideally, consumers should be able to purchase the quality they can afford. Unfortunately, if consumers can compare price but not quality, this may force quality to be consistently cut, leading to a 'race to the bottom'. Therefore, some control over quality needs to be exercised. This can be provided by external rating agencies, or by a public agency charged with eliminating anti-competitive practices and maintaining minimum quality standards. Mixed regulation A number of different regulatory regimes can be operated as part of a self-regulatory regime or, more typically, though a government appointed agency. i. Responsive regulation Responsive regulation proposes an alternative to the choice between deterrence regimes, punishing after the event, and compliance regimes, involving preventative persuasion. Combined strategies, of initial persuasion, followed up by deterrent sanctions for recalcitrant offenders, offers a dual approach. 4 It also forms a part of a wider suite, or pyramid, of strategies, starting with self-regulation but ending with strictly enforced sanctions for non-compliance as a final step. Compliance regimes can be developed through ongoing relationships between regulators and regulated entities. Their success depends on the transparency and clear communication between the parties. 5 Visits by regulators to regulated organisations check the 2

The Theory and Practice of Legislation, 2019

We live in an age where legislation and regulation make an increasing impact on our lives. The expansion of legislative and regulatory activities and outputs in the last century and especially in the last four decades has been followed by a growth of scholarly interest. However, far too little attention has been paid to the conceptual and empirical exploration of the relationships between legislation and regulation, and especially to the democratic consequences of their co-evolution, substitutivity, and intersection. This essay provides an introduction to the special issue on legislation and regulation. After introducing the topic, it presents three analytical distinctions between legislation and regulation and introduces the contributions to the issue.

Revue d'économie financière (English ed.), 2000

Référence : Frison-Roche Marie-Anne. How Should the Powers of Regulatory Authorities be Established in Terms of Law. In: Revue d'économie financière (English ed.), n°60, 2000. Security and financial regulation. pp. 85-99. Lien : http://www.persee.fr/doc/ecofi_1767-4603_2000_num_60_5_4506 Résumé : The financial authority, independent of the government and with quasi executive, legislative and judicial power, is like a monster in the French political system, but it could not be another way : the market regulator does not depend on the government because the latter, means of Treasury, is also an actor on the market. The principle of impartiality must prevail, but we need to find a new type of legitimacy to root the Authority’s power. It could come from the market itself. The foundation would be the contract between market and Authority. But the Authority must be able to overturn the will of the place, indeed to serve other interests. We can propose a legitimacy by rhetorical logic : the financial Authority may exercise its power legitimately because it is the arena which receives the arguments of different interests, adjudicates them, and would take decisions based on proof of objective and public reasonings. This third objective body would create Law from within the market. The failure to establish this would destroy the Authority’s legitimacy.

Encyclopedia of Law and Economics

2013

The aim of this paper is identify and compare the key features of regulatory systems in industrialised countries. By way of essential background, the first section deals with the constitutional and cultural environment which underpins the systems, but it also includes a discussion of regulatory traditions and styles which, for example as between anglophone and continental European regimes are significantly different. Institutional frameworks are discussed in the second section, covering, inter alia, the relationship between regulatory agencies and government, the breadth of remit of regulatory institutions and the degree of discretion conferred on them by legislation. The latter necessarily gives rise to issues concerning the forms of and institutions of accountability. In the third section, we consider regulatory procedures and management. Noteworthy here are, on the one hand, the systems of consultation and the extent to which public hearings are encouraged and, on the other, cost-benefit or regulatory impact analysis to which, in some jurisdictions, are mandatory for regulatory policy-makers. The final section is concerned with legal instruments and here we concentrate on the growing distance between traditional "command and control" methods and those relying on financial incentives and other economic instruments. Appended to the paper are two case studies which attempt to show how these features are deployed by different jurisdictions in two areas of concrete policy-making: taxicabs and water quality.

Policy and Society, 2007

In this article we examine the preconditions for fulfilling the aims of regulatory reform, exemplified through the case of Norway. We cover both the process of regulatory reorganization and decisionmaking within established regulatory structures. We argue that regulatory agencies operate in a complex political-administrative context and that we must combine instrumental and institutional perspectives to understand how they work in practice. This is done by applying a transformative approach that embraces organizational-structural elements, interests, cultural components and features from the institutional environment. We describe how a new regulatory reform policy has been introduced in Norway and focus on agency reform processes in two policy areas and on regulatory practice in two regulatory agencies. The main picture is that there is a loose coupling between the OECD regulatory policy ideal and a) general Norwegian regulatory policy; b) the reorganization of regulatory agencies in specific policy areas; and c) regulatory practice in individual cases.

Annals of Public and Cooperative Economics, 2002

2007

Regulation of business activity is nearly as old as law itself. In the last century, though, the use of regulation by modern governments has grown markedly in both volume and significance, to the point where nearly every facet of today’s economy is subject to some form of regulation. When successful, regulation can deliver important benefits to society; however, regulation can also impose undue costs on the economy and, when designed or implemented poorly, fail to meet public needs at all. Given the importance of sound regulation to society, its study by scholars of law and social science is also of paramount importance. In this chapter, we review the state of the field by focusing on four major areas of empirical research: (1) regulatory policy making, (2) regulatory enforcement, (3) business responses to regulation, and (4) innovative models of regulation. We begin by reviewing the political economy literature on the factors that influence government regulators as well as the ways...

Contemporary Politics, 2018

Regulatory governance frameworks have become essential building blocks of world society. From supply chains to the regimes surrounding international organizations, extensive governance frameworks have emerged which structure and channel a variety of social exchanges, including economic, political, legal and cultural, on a global scale. Against this background, this special issue sets out to explore the multifaceted meaning, potential and impact as well as the social praxis of regulatory governance. Under the notions rules, resistance and responsibility the special issue pins out three overall dimensions of regulation and governance thereby providing a theoretical and conceptual framework for grasping the phenomenon of regulatory governance. This is combined with extensive case studies on a number of regulatory governance settings ranging from the World Bank to agricultural reforms carried by the International Transitional Administrations (ITAs) in Kosovo and Iraq as well as global supply chains and their impact on the garment industry in Bangladesh.

Brookings-Wharton Papers on Financial Services, 2001