Showing papers in "Regulation & Governance in 2009"

Nurturing regulatory compliance: Is procedural justice effective when people question the legitimacy of the law?

Abstract: Procedural justice generally enhances an authority's legitimacy and encourages people to comply with an authority's decisions and rules. We argue, however, that previous research on procedural justice and legitimacy has examined legitimacy in a limited way by focusing solely on the perceived legitimacy of authorities and ignoring how people may perceive the legitimacy of the laws and rules they enforce. In addition, no research to date has examined how such perceptions of legitimacy may moderate the effect of procedural justice on compliance behavior. Using survey data collected across three different regulatory contexts – taxation (Study 1), social security (Study 2), and law enforcement (Study 3) – the findings suggest that one's perceptions of the legitimacy of the law moderates the effect of procedural justice on compliance behaviors; procedural justice is more important for shaping compliance behaviors when people question the legitimacy of the laws than when they accept them as legitimate. An explanation of these findings using a social distancing framework is offered, along with a discussion of the implications the findings have on enforcement.

Legitimating beliefs: Sources and indicators

Abstract: The more a government is effective and fair, the more legitimacy that government is likely to attain, and the more it will possess the potential to elicit compliance without excessive monitoring or punitive action. We explore this proposition using contemporary survey data from sub-Saharan Africa. In particular, we are interested in the conditions that promote popular legitimating beliefs that provide support for governments that are attempting to serve their entire populations competently and in a manner that is relatively impartial and equitable. This article provides empirical support for a long hypothesized link between the extent of government effectiveness, procedural justice, and citizens' willingness to defer to governmental tax authority. The sample, drawn from a continuum of developing societies in Africa, allows us to analyze the impact of variations in government effectiveness and citizen perceptions of fairness on the sense of obligation to comply with the tax authorities, our indicator for legitimating beliefs.

Testing responsive regulation in regulatory enforcement

Abstract: The policy ideals of responsive regulation have been developed on the basis of substantial empirical evidence. The overall formulation of responsive regulation theory itself, however, has rarely been empirically tested. This article sets out the theoretical concept of responsive regulation in the context of business regulation enforcement and discusses how we might operationalize and empirically measure it. We develop two alternative theoretical interpretations of responsive regulatory enforcement: “tit for tat” responsive regulation and “restorative justice” responsive regulation. We then measure business firms' perceptions of the reactions and counter-reactions of a regulatory enforcement agency throughout the investigation and enforcement process. We find little evidence of tit for tat responsiveness actually occurring in practice. To the extent that tit for tat responsiveness does exist, we find a small amount of evidence that it has the hypothesized effects on behavior but not on attitudes. We find clearer evidence of restorative justice responsiveness having the hypothesized effects on attitudes but not on behavior.

Comparing the legitimacy and effectiveness of global hard and soft law: An analytical framework

Abstract: The international norms that are developed as tools of global governance can be placed on a continuum from traditional “hard law” treaties to the vaguest and voluntary “soft law.” In this article we develop an analytical framework for comparing norms on different positions along the continuum, thus for comparing international hard and soft law. We root the framework in both the rationalist and the constructivist paradigms of international relations by focusing on two overarching evaluative criteria: effectiveness and legitimacy. These broad concepts are divided into smaller building blocks encompassing mechanisms through which norms can exert influence; for example, by changing material incentives, identities, and building capacity, and by contributing to building source-based, procedural, and substantive legitimacy. We illustrate the applicability of the framework with three norm processes of varying degrees of “softness” in global climate governance.

Responsive regulation at the Dutch Food and Consumer Product Safety Authority: An empirical assessment of assumptions underlying the theory

Abstract: Responsive regulation usually boils down to the assumption that enforcers should not shift to coercing before it has become clear that persuading does not work. This presupposes that it is possible to determine what the correct enforcement style is, that enforcers can apply the most suitable style, and that enforcers control the negative unintended consequences of their conduct. We have studied the applicability of these presuppositions at the Dutch Food and Consumer Product Safety Authority by way of observations, interviews, and a survey. The applicability of all three presuppositions has proven problematic; enforcement agents apply different styles in comparable cases; they are impeded in applying the most appropriate style; and they do not control the perverse consequences of their conduct because regulatees tend to perceive it as more coercive than intended by inspectors. Our findings are not unique to this inspectorate and hence raise questions about the applicability of the theory of responsive regulation.

The devaluation of life

Abstract: The US Environmental Protection Agency (EPA) has been the target of two recent controversies involving the devaluation of life: the 2003 use of a senior discount for the value of statistical life for people over age 65, and the 2008 downward reassessment of the value of statistical life by the EPA Air Office. Even though these new values of statistical life were still among the highest used in the Federal government, there was a strong negative public reaction to each. The public outcry over the EPA policies appears to have stemmed from an irrational response to decreases in the value of statistical life. Proposed Congressional legislation that purportedly seeks to reform the valuations would politicize benefit assessments. A sounder approach is to establish a peer-reviewed scientific advisory panel to advise agencies on the value of statistical life.

Counting on codes: An examination of transnational codes as a regulatory governance mechanism for nanotechnologies

Abstract: This article examines the rise of nanotechnology-specific codes of conduct (nano-codes) as a private governance mechanism to manage potential risks and promote the technology. It examines their effectiveness as well as their legitimacy as regulatory instruments in the public domain. The study first maps the rise of voluntary nano-codes and the roles played by different actors. Focusing on five specific nano-codes, the article then discusses their adequacy in terms of scientific uncertainty, gaps in existing regulatory regimes, and broader societal concerns. It concludes that these voluntary nano-codes have weaknesses including a lack of explicit standards on which to base independent monitoring, as well as no sanctions for poor compliance. At the same time it also highlights the potential power of these governance mechanisms under conditions of uncertainty and co-regulation with government. It is likely that nano-codes will become the “first cut” of a new governance regime for nanotechnologies.

Not again! Public perception, regulation, and nanotechnology

Abstract: It is often argued that immediate government action regarding nanotechnology is needed to ensure that public opinion does not mistakenly view nanotechnology as dangerous, to restore public trust in government, and to increase the legitimacy of government action through increased public participation. This article questions whether governments can achieve these goals. As the world lurches toward regulation of nanotechnology, we should ask Why the rush? Can anticipatory action, perceived as the government doing something, fulfill the competing hopes to “restore trust,”“pave the way” for nanotechnology, “increase awareness,” and “satisfy democratic notions of accountability”? Or is government action more likely to increase existing divisions over nanotechnology's future?

Citizen oversight of independent police services: Bifurcated accountability, regulation creep, and lesson learning

Abstract: Examining developments in England and Wales, this paper considers police reform in the context of the tension between operational independence and citizen oversight of complaints. An appreciation of the nexus between regulation and accountability is presented in order to help understand how the traditional bifurcated accountability paradigm maintained police autonomy in the late twentieth century and the recent trend towards regulation of the police. Particular significance is attached to the shooting of Jean Charles de Menezes as a critical moment in the history of police governance. The lesson-learning strategy of the Independent Police Complaints Commission, created under the Police Reform Act 2002, is singled out as an important driver of police reform.

Divided government and US federal rulemaking

Abstract: Despite paying a great deal of attention to the effects of divided government on legislative outputs, scholars of American politics have surprisingly ignored the potential impact of divided government on bureaucratic regulatory outputs. In this article we argue that divided government should reduce the volume of federal agency rulemaking. We test this hypothesis against a data set covering 21,000 rules from 1983 to 2005. Our study is one of the first to analyze the determinants of federal bureaucratic rulemaking activity across such a long period of time. Our results demonstrate that during periods of divided government, agencies issue fewer rules and fewer substantively significant rules than they do during periods of unified government. These findings suggest that divided government impedes agency rulemaking.

Cost-benefit analysis: New foundations on shifting sand

Abstract: New Foundations of Cost–Benefit Analysis, by Matthew Adler and Eric Posner, represents the most ambitious and credible effort to date to build a solid theoretical defense of the use of cost–benefit analysis (CBA) in evaluating government regulation. In this review, three cost–benefit “skeptics” offer their reactions to this ambitious and important book. We note its virtues – its humility, its scrupulousness, its open-mindedness. We also explore its vices. If preferences are to be “laundered,” is it intellectually defensible to remove the bad but not consider adding the good? Does Adler's and Posner's welfarism really play the limited role they suppose, or does it risk “crowding out” other important deontological and distributional values? If CBA is merely a decision procedure that provides an imperfect proxy of welfare – the moral criterion we really care about – how do we know that the proxy it provides in practice will actually be accurate enough to be useful? Isn't this at bottom an empirical question that cannot be answered by this thoroughly theoretical book? If CBA is no more than an imperfect proxy for welfare, then alternative imperfect decision procedures may perform better in the real world.

From corporatism to lawyocracy? On liberalization and juridification

Abstract: In 1997 Robert Kagan questioned whether European countries had to fear the coming of American style adversarial legalism. He answered this question with a qualified “no.” Today we are no longer so sure the answer is “no,” even in a country that Kagan considered the antipole of US adversarial legalism, the Netherlands, traditionally characterized by informal and consensual conflict resolution. In the present article we chart a trend of increasing juridification and legalism, that is, more formal and legal conflict resolution, in the Netherlands between 1970 and 2008. The trend is related to major changes in economic governance institutions, which generated a shift from corporatism toward lawyocracy; from power of the associations of civil society toward power of courts, lawyers, and judges. Yet the newly dominant system of governance is modified and merged with elements of the old system, producing a specific Dutch version, which one could call “corporatist lawyocracy.” We identify two types of liberalization as major driving forces: social liberalization in the 1970s and 1980s, followed by economic liberalization in the subsequent decades. If one considers economic liberalization a product of neoliberal “Reaganomics,” the legal changes are in a way an “American export product,” although a different one than the lawyering styles of large international American law firms mentioned by Kelemen and Sibbitt in 2004.

Adversarialism versus legalism: Juridification and litigation in corporate governance reform

Abstract: Recent reforms of corporate governance law and related litigation rules in the US and in Germany indicate that reports of the spread of adversarial legalism are greatly exaggerated. Politics and legislation in the US since the mid-1990s have turned quite decisively against shareholder litigation even as corporate governance and securities law reforms have expanded the role and scope of the regulatory state. Germany's extraordinary expansion of financial and corporate governance regulation since the early 1990s exemplifies juridification. Although these reforms included some liberalization of shareholder litigation rules, the changes reflected skepticism towards private litigation and imposed new constraints on the most prevalent forms of shareholder suits. Marketization of economic relations and the era of finance capitalism have produced far more legalism than adversarialism, more regulation than judicialization, and more ex ante transparency rules than ex post litigation remedies.

The regulatory state and the UK Labour Government's re-regulation of provision in the English National Health Service

Abstract: Following its election in 1997, the UK Labour Government embarked upon a 10 year program of reform of the National Health Service (NHS). By 2005, Labour had doubled the NHS budget and dramatically transformed the shape of the Service. In England, a basic characteristic of the NHS is the organizational split between provider and commissioning agencies. In this article I argue that Labour's re-regulation of NHS provision is a coherent representation of the influence of the “regulatory state” in restructuring arrangements between government, market, and society. The article offers an account of the regulatory state based on a discussion of five key theses: The Audit Society, Regulation Inside Government, The New Regulatory State, The British Regulatory State, and Regulatory Capitalism. The article unfolds Labour's program of reform across themes common to these accounts: the division of labor between state and society, the division of labor within the state, the formalization of previously informal controls, and the development of meta-regulatory techniques of enforced self-regulation. It concludes that the key themes of the regulatory state are at work in Labour's transformation of NHS provision and it offers a discussion of the implications for both scholars of regulation and the UK and European health policy literature.

Regulation and voluntarism: A case study of governance in the making

Abstract: In this article I analyze a multi-stakeholder process of environmental regulation. By grounding the article in the literature on regulatory capitalism and governance, I follow the career of a specific legislative process: the enactment of Israel's Deposit Law on Beverage Containers, which aims to delegate the responsibility for recycling to industry. I show that one crucial result of this process was the creation of a non-profit entity licensed to act as a compliance mechanism. This new entity enabled industry to distance itself from the responsibility of recycling, and thereby frustrated the original objective of the legislation, which was to implement the principle of “extended producer responsibility.” Furthermore, this entity, owned by commercial companies and yet acting as an environmentally friendly organization, allowed industry to promote an anti-regulatory agenda via a “civic voice.” The study moves methodologically from considering governance as an institutional structure to analyzing the process of “governancing,” through which authoritative capacities and legal responsibilities are distributed among state and non-state actors. Two key findings are that this process and its outcome (i) are premised on an ideology of civic voluntarism, which ultimately delegates environmental responsibilities to citizens; and (ii) facilitate an anti-regulatory climate that serves commercial interests.

The political valuation of life

Abstract: Squaring life with money was never, in any society, a simple affair. Even in our highly commercialized world, the valuation of human existence through pecuniary means continues to be surrounded by all kinds of moral prohibition. Thus institutions dealing in the monetary commensuration of life (or death) often need to carry out a considerable amount of symbolic work before they succeed in making their business acceptable. It is through such cultural elaboration, for instance, that companies proposing life insurance policies (insurance policies tied to the life of an individual) and, later, viatical settlements (the purchase of life insurance policies for a cash fee, typically from owners with shorter life expectancy) were able to obtain social approval for their activities (Zelizer 1979; Heimer 2003; Quinn 2008) or that a partial market for human tissue finally developed in the US (Healy 2006). But other similar trades are still illegal today. Yet it is also true that dollars and life (as well as, correlatively, death) get mixed much more often than we are willing to recognize. In advanced industrial societies, the process of monetary commensuration is often controlled by large, bureaucratic organizations endowed with what Max Weber (1978) called rational-legal authority. Public policy agencies and courts but also corporations or insurance companies concerned with risk management routinely rely on economic methodologies to compensate relatives for a personal loss, chart courses of action in health or environmental policy, or choose between programs of workplace safety. Under their influence, the highly moral and emotional boundary between life and death has undergone a rationalistic conversion, which has both managed to keep the moral issues hidden and permitted a pragmatic expansion of economic calculus to promote various public or corporate goals.

"Adversarial legalism" in the German system of industrial relations?

Abstract: The US has a distinctive legal style, which Robert Kagan has called “adversarial legalism.” It is marked by a pattern of political decisionmaking and conflict resolution in which the courtrooms and the law are systematically exploited as political arenas for making and implementing political settlements and policy outlines. In this article it is argued that a “German way” of adversarial legalism is about to emerge in the German industrial relations system. Economic liberalization, the fragmentation and decentralization of lawmaking authority in the political sphere, and the common-law-like nature of German labor law have contributed to the appearance of a judicialized pattern of governance. Nonetheless, Germany is not converging on the “American way of law” and major differences are expected to persist in the years to come.

Power to the legal professionals: Is there an Americanization of European law?

Abstract: Twelve years ago, Robert Kagan asked “Should Europe worry about adversarial legalism?” He answered this question with a qualified “no,” and identified a number of sources of resistance to such a trend. More recently, he broadened the issue in this journal by asking whether European countries experience an “Americanization” of their legal systems. The articles in this Symposium on the Americanization of European Law all revisit that question. The present article introduces the topic, discusses the elements that make up adversarial legalism, and summarizes and compares the findings of the articles in the Symposium. The articles find an increase in one dimension of adversarial legalism, namely, more legalism, that is, more litigation, more formalism, and more verdicts interfering with politics, but hardly any increase in adversarialism. Tenacious pre-existing national legal and political cultures and institutions resist a further move in the direction of American style adversarial legalism. The mix of more litigation, more legalism, and more politicization, overlaid on the pre-existing hierarchic authority of courts and legal functionaries has, however, strengthened the societal and political power of the judiciary vis-a-vis other powers. A professional elite is increasingly making the political choices that in a democratic society ought to be made by democratic representatives. Perhaps Europe should worry about this.

Salt, high blood pressure, and performance‐based regulation

Abstract: Performance-based regulation is a new approach to public health promotion. The aim of this article is to explain how this idea might be applied to the public health goal of reducing salt consumption as a way of reducing high blood pressure and thereby saving lives. Performance-based regulation is compared with competing regulatory strategies.

Reply to the comments on "The devaluation of life"

Abstract: tive and question the moral integrity of the economic approach. Such a reservation commonly arises within regulatory agencies and for the public when the value of statistical life (VSL) methodology is not fully understood. While VSL methodology is now a mainstream economics research area and is in line with Robinson’s policy analysis prescriptions, she points out that government agencies share a responsibility to communicate to the public the rationale for the methodology and the reasons underlying changes in the VSL measures. Fundamental failures in communication may have contributed to the recent policy debacles involving the use of VSL figures. The historical context of benefit–cost analysis provides a useful starting point for understanding why I advocate the policy application of the VSL measure despite the controversy surrounding these figures. Both Carruthers and Fourcade discuss the historical development of benefit–cost analysis, which was introduced as a policy evaluation tool within the context of public works projects. The Army Corps of Engineers and the US Department of the Interior’s Bureau of Reclamation have long assessed the economic benefits and costs of dams and related water resource projects and have used these estimates to justify the efforts, which are required by legislation to meet the test that a project’s benefits exceed the costs. Critiquing these economic assessments was my first published encounter with the cost–benefit methodology. In Berkman and Viscusi (1973), we concluded that many of the purported economic benefits calculated by the Bureau of Reclamation were overstated. But more importantly, we found that while the adverse ecological consequences of the dams were discussed in the policy assessments, those effects were subsequently easily ignored because no monetary value was attached to them. One lesson I derived from this experience is that monetizing difficult-to-quantify outcomes does not devalue them but rather makes it possible for such effects to be treated as just as real and consequential as more conventional economic effects. Fourcade’s concern with the moral issues involved in valuing lives echoes the concerns formerly expressed by regulatory agencies. However, attempts to evade the intrinsic valuations of life that are implicit in the design of risk regulations have led to comparative neglect of lives in much the same way that adverse environmental consequences of dams

The German Gemeinwirtschaftslehre: Implications for modern nonprofit economics

Abstract: This article examines the way modern nonprofit economics can be informed by the Gemeinwirtschaftslehre, a strand of public and nonprofit economics that was popular in German-speaking countries until the 1980s. Despite its present decline, the Gemeinwirtschaftslehre yields a valuable implication that nonprofit firms address market failure by supplanting the pecuniary entrepreneurial motivation with a nonpecuniary one. In this article, this implication is used to reconsider two central and controversial issues in modern nonprofit economics: the rationale behind the nondistribution constraint in nonprofit firms, and the integration between the market failure and supply-side theories of the nonprofit sector. The article concludes by discussing the emerging prospects for empirical research.