Showing papers in "Regulation & Governance in 2018"

Algorithmic regulation: A critical interrogation

Abstract: Innovations in networked digital communications technologies, including the rise of “Big Data,” ubiquitous computing, and cloud storage systems, may be giving rise to a new system of social ordering known as algorithmic regulation Algorithmic regulation refers to decisionmaking systems that regulate a domain of activity in order to manage risk or alter behavior through continual computational generation of knowledge by systematically collecting data (in real time on a continuous basis) emitted directly from numerous dynamic components pertaining to the regulated environment in order to identify and, if necessary, automatically refine (or prompt refinement of) the system's operations to attain a pre-specified goal This study provides a descriptive analysis of algorithmic regulation, classifying these decisionmaking systems as either reactive or pre-emptive, and offers a taxonomy that identifies eight different forms of algorithmic regulation based on their configuration at each of the three stages of the cybernetic process: notably, at the level of standard setting (adaptive vs fixed behavioral standards), information-gathering and monitoring (historic data vs predictions based on inferred data), and at the level of sanction and behavioral change (automatic execution vs recommender systems) It maps the contours of several emerging debates surrounding algorithmic regulation, drawing upon insights from regulatory governance studies, legal critiques, surveillance studies, and critical data studies to highlight various concerns about the legitimacy of algorithmic regulation

Multinationals as global institution: Power, authority and relative autonomy

Abstract: This article aims to inform the long-standing and unresolved debate between voluntary corporate social responsibility and initiatives to impose binding legal obligations on multinational enterprises. The two approaches share a common feature: neither can fully specify its own scope conditions, that is, how much of the people and planet agenda either can expect to deliver. The reason they share this feature is also the same: neither is based on a foundational political analysis of the multinational enterprise in the context of global governance. Such an analysis is essential for providing background to and perspective on what either approach can hope to achieve, and how. This article begins to bridge the gap by illustrating aspects of the political power, authority, and relative autonomy of the contemporary multinational enterprise. The conclusion spells out some implications for the debate itself, and for further research.

A worldwide consensus on nudging? Not quite, but almost

Abstract: Nudges are choice-preserving interventions that steer people's behavior in specific directions while still allowing them to go their own way. Some nudges have been controversial, because they are seen as objectionably paternalistic. This study reports on nationally representative surveys in eight diverse countries, investigating what people actually think about nudges and nudging. The study covers Australia, Brazil, Canada, China, Japan, Russia, South Africa, and South Korea. Generally, we find strong majority support for nudges in all countries, with the important exception of Japan, and with spectacularly high approval rates in China and South Korea. We connect the findings here to earlier studies involving Denmark, France, Germany, Hungary, Italy, the United Kingdom, and the United States. Our primary conclusion is that while citizens generally approve of health and safety nudges, the nations of the world appear to fall into three distinct categories: (i) a group of nations, mostly liberal democracies, where strong majorities approve of nudges whenever they (a) are seen to fit with the interests and values of most citizens and (b) do not have illicit purposes; (ii) a group of nations where overwhelming majorities approve of nearly all nudges; and (iii) a group of nations that usually show majority approval, but markedly reduced approval rates. We offer some speculations about the relationship between approval rates and trust.

Experimentalism in transnational forest governance: Implementing European Union Forest Law Enforcement, Governance and Trade (FLEGT) Voluntary Partnership Agreements in Indonesia and Ghana

Abstract: Over the past decade, the European Union (EU) has created a novel experimentalist architecture for transnational forest governance: the Forest Law Enforcement, Governance and Trade (FLEGT) initiative. This innovative architecture comprises extensive participation by civil society stakeholders in establishing and revising open-ended framework goals (Voluntary Partnership Agreements [VPAs] with developing countries aimed at promoting sustainable forest governance and preventing illegal logging) and metrics for assessing progress toward them (legality standards and indicators) through monitoring and review of local implementation, underpinned by a penalty default mechanism to sanction non-cooperation (the EU Timber Regulation that prohibits operators from placing illegally harvested wood on the European market). This paper analyzes the implementation of VPAs in Indonesia and Ghana, the two countries furthest advanced toward issuing FLEGT export licences. A central finding is the reciprocal relationship between the experimentalist architecture of the FLEGT initiative and transnational civil society activism, whereby the VPAs’ insistence on stakeholder participation, independent monitoring, and joint implementation review, underwritten by the EU, empowers domestic non-governmental organizations with local knowledge to expose problems on the ground, hold public authorities accountable for addressing them, and contribute to developing provisional solutions.

Agency proliferation and the globalization of the regulatory state: Introducing a data set on the institutional features of regulatory agencies

Abstract: State structures have experienced significant transformation with the spread of globalization. This paper examines how to measure one major change that has occurred in recent decades: the worldwide proliferation of public agencies with regulatory tasks. It remains unclear how their configurations vary across countries and sectors, and what can be learned from these variations. To better identify these agencies worldwide, we introduce a new dataset on the institutional features of 799 agencies in 115 countries and 17 policy sectors. The dataset contains variables from their institutional profiles, covering a broad range of formal characteristics. To examine the diverse faces the regulatory state has adopted along its globalization path in depth, our variables are grouped into four blocs: regulatory responsibilities, managerial autonomy, political independence, and public accountability. As such, we depart from the view that a single dimension does capture the actual diversity of institutional forms regulatory agencies may exhibit. We also use factor and cluster analyses to assess their various forms, and suggest a typology of agency institutional models to facilitate more precise studies on the regulatory state. Results confirm that the regulatory state shows greater variety than usually expected.

Citizen co-production of cyber security: Self-help, vigilantes, and cybercrime

Abstract: Given the limited resources and capabilities of states to maintain cyber security, a variety of co-production efforts have been made by individuals or by collectives, of varying degrees of organization and coordination. This article identifies different forms of citizen co-production of cyber security and notes the risk of unintended consequences. Safeguards and principles are proposed in order to facilitate constructive citizen/netizen co-production of cyber security. Although co-production of security can contribute to social control, only those activities within the bounds of the law should be encouraged. Activities of private citizens/netizens that test the limits of legality should be closely circumscribed.

A decision analytic model to guide early‐stage government regulatory action: Applications for synthetic biology

Abstract: Synthetic biology (SB) involves the alteration of living cells and biomolecules for specific purposes. Products developed using these approaches could have significant societal benefits, but also pose uncertain risks to human and environmental health. Policymakers currently face decisions regarding how stringently to regulate and monitor various SB applications. This is a complex task, in which policymakers must balance uncertain economic, political, social, and health‐related decision factors associated with SB use. We argue that formal decision analytical tools could serve as a method to integrate available evidence‐based information and expert judgment on the impacts associated with SB innovations, synthesize that information into quantitative indicators, and serve as the first step toward guiding governance of these emerging technologies. For this paper, we apply multi‐criteria decision analysis to a specific case of SB, a micro‐robot based on biological cells called “cyberplasm.” We use data from a Delphi study to assess cyberplasm governance options and demonstrate how such decision tools may be used for assessments of SB oversight.

Regulation under uncertainty: The coevolution of industry and regulation

Abstract: As production and design disintegrate and become more collaborative, involving dynamic relations between customers and firms supplying complex subsystems and service, products and production methods become more innovative but also more hazardous. The inadvertent co-production of latent hazards by independent firms is forcing firms and regulators to address the problem of uncertainty – the inability to anticipate, much less assign a probability to future states of the world – more directly than before. Under uncertainty, neither the regulator nor the regulated firms know what needs to be done. The regulator must induce firms to systematically canvas their practices and identify potential hazards. But recognizing the fallibility of all such efforts, the regulator must further foster the institutionalization of incident or event reporting procedures: systems to register failures in products or production processes that could be precursors to catastrophe; to trace out and correct their root causes; to alert others in similar situations to the potential hazard; and to make certain that countermeasures to ensure the safety of current operations are taken and the design requirements for the next generation of the implicated components or installations are updated accordingly. In this essay we develop these arguments and look closely at changes in the Norwegian offshore oil and gas industry and its regulator, the Petroleum Safety Authority to better understand the coevolution of vertically disintegrated industry and new forms of regulation.

Beyond regulatory capture: Coproducing expertise for critical infrastructure protection

Abstract: Complex industries such as petroleum production, civil aviation, and nuclear power produce “public risks” that are widely distributed and temporally remote, and thus tend to be ignored by the risk producers. Regulation is perhaps the most common policy tool for governing such risks, but requires expert knowledge that often resides solely within the industries. Hence, many scholars and policymakers raise concerns about “regulatory capture,” wherein regulation serves private interests rather than the public good. This paper argues that regulatory capture framing has tended to limit understanding of expertise and its role in governing public risks. Most studies of regulatory capture treat expertise as a source of knowledge and skills that are created exogenously to political processes, and which can therefore be politically neutral. By contrast, we draw on work in science and technology studies that highlight the value-laden and relational nature of knowledge and expertise, showing how its formation is endogenous to political processes. Thus, we argue for both broadening analyses of regulatory capture to consider the historically contingent and uncertain process of creating expert knowledge, and going beyond the capture framing by considering the challenge of negotiating different epistemologies and ways of life. We illustrate this analytic strategy by examining the history of and current debate about critical infrastructure protection standards to protect the United States electric power grid from cyberattack. We conclude by considering the broader implications of these findings for governing public risks.

Public Orchestration, Social Networks, and Transnational Environmental Governance: Lessons from the Aviation Industry

Abstract: This article contributes to current debates on the potential and limitations of transnational environmental governance, addressing in particular the issue of how private and public regulation compete and/or reinforce each other – and with what results. One of the most influential approaches to emerge in recent years has been that of “orchestration.” But while recent discussions have focused on a narrow interpretation of orchestration as intermediation, we argue that there is analytical traction in studying orchestration as a combination of directive and facilitative tools. We also argue that a social network analytical perspective on orchestration can improve our understanding of how governments and international organizations can shape transnational environmental governance. Through a case study of aviation, we provide two contributions to these debates: first, we propose four analytical factors that facilitate the possible emergence of orchestration (issue visibility, interest alignment, issue scope, and regulatory fragmentation and uncertainty); and second, we argue that orchestrators are more likely to succeed when they employ two strategies: (i) they use a combination of directive and facilitative instruments, including the provision of feasible incentives for industry actors to change their behavior, backed up by regulation or a credible regulatory threat; and (ii) they are robustly embedded in, and involved in the formation of, the relevant transnational networks of actors and institutions that provide the infrastructure of governance.

Transnational delegation in global environmental governance: When do non-state actors govern?

Abstract: Non-state actors – including firms, non-governmental organizations, and networks – are now a permanent fixture in environmental politics. However, we know surprisingly little about when states choose to delegate to non-state actors through multilateral treaties. This paper provides an historical picture, tracing patterns of delegation to non-state agents in a random sample of multilateral environmental agreements from 1902 to 2002. I introduce a new unit of analysis – the policy function – to understand what non-state actors actually do as agents. I find that analyses of delegation are sensitive to the unit of analysis; patterns of delegation at the treaty level are very different from those at the level of individual policy functions. While overall the decision to delegate to non-state actors – what I term transnational delegation – is rare, it has grown over time. Complex treaties, those with secretariats, and those focused on the management of nature are more apt to delegate to non-state actors. Non-state agents fill a small, but growing role in multilateral environmental treaties.

The redistributive impact of hypocrisy in international taxation

Abstract: Why do tax havens, whose attractiveness for foreign investors depends upon financial secrecy, agree to automatically report account data to foreign governments? From a contractualist perspective, their cooperation should be motivated by the expectation of joint gains. Prior to such agreement, however, tax havens expected outflows of foreign capital and reductions in economic activity as likely outcomes. We show that the United States (US) imposed automatic information exchange on these countries without itself participating. The result is a strongly redistributive regime that worsens the economic situation of tax havens. By means of a difference-in-differences analysis, we ascertain a substantial and statistically significant negative effect of a US sanction threat on the value of assets held by foreigners in tax havens relative to non-havens. The effect becomes stronger when the US is included in the non-haven group. The analysis confirms the US's ability to redistribute financial wealth internationally through organized hypocrisy.

How does knowledge circulate in a regulatory network? Observing a European Platform of Regulatory Authorities meeting

Abstract: Multi-level networks of regulatory authorities are considered as vectors of knowledge circulation, norm diffusion, and regulatory coordination. However, this is often assumed without empirical scrutiny of the concrete “micro-dynamics” between individual participants in networks, which remain a “black box” for analysts. This paper is mainly based on direct observation and informal interviews conducted during a meeting of the European Platform of Regulatory Authorities in charge of regulation of the broadcasting sector. It seeks to elucidate what deliberation, socialization, and learning, considered as devices typical of “soft” governance modes, mean as concrete social practices within a network.

Regulatory inspection and the changing legitimacy of health and safety

Abstract: The regulation of conduct via law is a key mechanism through which broader social meanings are negotiated and expressed. The use of regulatory tools to bring about desired outcomes reflects existing social and political understandings about¬ institutional legitimacy, the meanings attached to regulation, and the values it seeks to advance. But these contextual understandings are not static, and their evolution poses challenges for regulators, particularly when they reflect political framing processes. This paper shows how inspection has been reshaped as a tool within the United Kingdom’s health and safety system by changes in the meanings attached to the concept of ‘risk-based regulation’. While rates of inspection have fallen dramatically in recent years, the nature and quality of inspection have also been fundamentally reshaped via an increasingly procedural and economically-rational ‘risk-based’ policy context. This has had consequences for the transformative and symbolic value of inspection as a tool of regulatory practice.

Limits of regulatory responsiveness: Democraticcredentials of responsive regulation

Abstract: Responsiveness and accountability constitute the process of democratic representation, reinforcing each other. Responsiveness asks elected representatives to adopt policies ex ante preferred by citizens, while accountability consists in the people‘s ex post sanctioning of the representatives based on the policy outcomes. However, the regulatory literature tends to interpret responsiveness narrowly between a regulator and regulatees: the regulator is responsive to regulatees‘ compliance without considering broader public needs and preferences. Democratic regulatory responsiveness requires that the regulator should be responsive to the people, not just regulatees. We address this theoretical gap by pointing out the perils of regulatory capture and advancing John Braithwaite‘s idea of tripartism as a remedy. We draw out two conditions of democratic regulatory responsiveness from Philip Selznick — comprehensiveness and proactiveness. Then we propose overlapping networked responsiveness based on indirect reciprocity among various stakeholders. This mechanism is the key to connecting regulatory responsiveness with accountability.

Temporary legislation, better regulation, and experimentalist governance: An empirical study

Abstract: This article presents the findings of an extensive multi-method empirical study that explored the relationship between temporary legislation, better regulation, and experimentalist governance. Temporary (or “sunset”) legislation – statutory provisions enacted for a limited time and set to expire unless their validity is extended – is often hailed as a key tool for promoting experimental and better regulation. Despite the importance of temporary legislation and the burgeoning theoretical scholarship on the subject, there is still a dearth of empirical studies about how temporary legislation is used in practice. The lack of empirical evidence creates a lacuna in at least three areas of theoretical scholarship, concerning temporary legislation, better regulation, and experimentalist governance. This paper is a first step to fill this gap.

Interest group representation in the formal design of European Union agencies

Abstract: This article examines the decision to include interest group representation (IGR) in the most important decisionmaking bodies of European Union agencies (EAs). The study shows that there is considerable variation among agencies: some agencies have no IGR, others have formal rules that establish a clear distribution of the number of representatives among stakeholders, while other agencies are ambiguous with regard to the number of representatives that each group should have. In addition, interest group representatives have the right to vote in some of the agencies with IGR, while in others they only have an advisory role. This article identifies three broad types of groups normally represented: representatives of capital (e.g. industry), representatives of labor (e.g. trade unions), and citizens' representatives (e.g. non-governmental organizations, consumer groups). The findings suggest that informative agencies are more likely to have IGR than agencies performing operational/management tasks. The findings also suggest that the involvement of the European Parliament in the design of EAs is more likely to lead to a provision for the representation of stakeholders. Finally, case studies of the European Food Safety Agency and the European Agency for Safety and Health at Work demonstrate that interest groups could play an important role by pushing European Union institutions to include stakeholder representatives in EAs.

Partisan politics, welfare states, and environmental policy outputs in the OECD countries, 1975–2005

Abstract: Building on the burgeoning literature on the association between the welfare state and the environmental state, this study empirically examines how the politics of the former has affected the development of the latter. We suggest that the size of the welfare state shapes the calculus of environmental policy costs by partisan governments. A generous welfare state lowers the costs perceived by the left-wing government, as large redistributive spending allows the government to mitigate the adverse impact of the new environmental policy on its core supporters, industrial workers. A generous welfare state also implies diminished marginal political returns from additional welfare commitment by the left-wing government, which lowers the opportunity costs of environmental policy expansion. To the contrary, because of lower overall regulatory and taxation pressure, a small welfare state reduces the costs of environmental policy expansion as perceived by a right-wing government. Our theoretical narrative is supported in a dynamic panel data analysis of environmental policy outputs in 25 Organisation for Economic Co-operation and Development member states during the period 1975–2005.

Regulating Islamic banks in authoritarian settings: Malaysia and the United Arab Emirates in comparative perspective

Abstract: The research and fieldwork was supported by a postdoctoral fellowship from the AXA Research Fund. Jose Castillejo Mobility Grant from the Spanish Ministry of Education, Culture and Sport enabled a research stay at Princeton Institute for International and Regional Studies.

Ideological influences on governance and regulation: The comparative case of supreme courts

Abstract: A key influence on governance and regulation is the ideology of individual decisionmakers. However, certain branches of government – such as courts – while wielding wide ranging regulatory powers, are expected to do so with no attitudinal influence. We posit a dynamic response model to investigate attitudinal behavior in different national courts. Our ideological scores are estimated based on probability models that formalize the assumption that judicial decisions consist of ideological, strategic, and jurisprudential components. The Dynamic Comparative Attitudinal Measure estimates the attitudinal decisionmaking on the institution as a whole. Additionally, we estimate Ideological Ideal Point Preference for individual justices. Empirical results with original data for political and religious rights rulings in the Supreme Courts of the United States, Canada, India, the Philippines, and Israel corroborate the measures' validity. Future studies can utilize Ideological Ideal Point Preference and the Dynamic Comparative Attitudinal Measure to cover additional courts, legal spheres, and time frames, and to estimate government deference.

Toward the usable recognition of individual benefits and costs in regulatory analysis and governance

Abstract: Regulatory agencies in the United States and Europe have well-deserved reputations for fixating on the total benefits and costs of proposed and final regulatory actions, without doing any more than anecdotally mentioning the subpopulations and individuals who may bear disproportionate costs or reap disproportionate benefits. This is especially true on the “cost” side of the cost–benefit ledger, where analysts exert little effort to even inform decisionmakers and the public that the costs of regulations might be distributed either regressively or progressively. Many scholars and advocates have observed that regulation can increase the efficiency of markets, but caution about its untoward (or suboptimal) effects on equity. Here, we argue that without considering distributional information about costs and benefits, regulatory policies in fact can also cause violence to notions of efficiency, for two reasons: (i) society cannot hope to approach Pareto-efficient outcomes without identifying those who must lose so that others can gain more; and (ii) because the harm experienced by involuntary risks and by imposed regulatory costs is likely non-linear in its magnitude (at the individual level), efficiency is, in fact, a strong function of the shape of the distribution of these effects. This article reviews evidence about the distribution of regulatory costs and benefits, describes how agencies fail to incorporate readily available distributional information, and sketches a vision for how they could analyze costs and benefits to promote more efficient regulatory choices and outcomes.

Two spheres of regulation: Balancing social and economic goals

Abstract: Independent regulatory authorities hold comprehensive policy mandates that cover both economic and social goals. They take on various roles in market regulation, competition policy, consumer protection, and labor inspection. This article questions whether policymakers are driven by different rationales when delegating the realization of social, as opposed to economic goals, and analyzes how regulators accommodate their various roles in practice. The conceptual framework links the literature on delegation and organizational models. Comparative analysis of postal policy in France, Germany, and the United Kingdom covers a serious area of potential conflict between social and economic regulation. Variation in delegation points to the relevance of instrumental considerations, but also to the politics of institutional arrangements. Variation in regulatory practice shows that organizational models make a difference in accommodating conflict. The article makes a strong case that social and economic regulation need to be addressed as two distinct, yet interacting spheres. © 2017 John Wiley & Sons Australia, Ltd

Regulatory Analysis Procedures and Political Influence on Bureaucratic Policymaking

Abstract: Well-known theories suggest that administrative procedures may be used as mechanisms of political control of the bureaucracy. This study investigates whether three common regulatory analysis procedures—cost-benefit analysis, risk assessment, and economic impact analysis—lead to greater influence by political officials on bureaucratic policymaking. Multivariate analyses of data from a unique survey of state administrators indicate that regulatory analysis requirements are associated with decreases in the perceived influence of elected political officials on the content of administrative rules. This association is particularly evident in cases where proposed rules are subjected to a cost–benefit test. These findings contradict prominent theories of administrative procedures, but are consistent with recent research on the political power of administrative agencies.

The politics of resonance: Transnational sustainability governance in Argentina

Abstract: Why do private governance initiatives trigger greater participation in one country than another? This article examines the domestic dimension of transnational regulation through a case study of private sustainability governance in Argentina. Drawing from theories of contentious politics, the argument poses that the resonance of transnational private governance is shaped by the semantic compatibility of “incoming” sustainability programs against national political culture. Analyzing the limited participation of Argentine actors in contemporary sustainability initiatives, the article claims that the validity and relevance of sustainability programs is affected by three dimensions of national political culture accentuated over the last decade: a politicized model of state-society relations, the low visibility of environmental matters, and a widespread anti-corporate culture. By examining the ideational fundamentals of the “politics of resonance” in Argentina, the article makes a relevant and original contribution to transnational regulation literature, highlighting the need for theoretical accounts and empirical analyses that address domestic and cultural variables as fundamental pieces in transnational norm diffusion and effectiveness.

Understanding the ASEAN way of regional qualification governance: The case of mutual recognition agreements in the professional service sector

Abstract: Existing studies on Mutual Recognition Agreements (MRAs) are mostly based on the European experience In this paper, we discuss the ongoing attempt of the Association of Southeast Asian Nations (ASEAN) to establish very unique MRAs, using professional service qualifications, particularly engineering, as a case study Several ASEAN professional service qualification MRAs employ a “hub‐and spoke” model, wherein neither the hub (regional mechanism) nor the spokes (national authorities) are more powerful than the other This model features both harmonization of professional qualifications led by regional mechanisms and the recognition of partner countries’ qualifications granted by national authorities Why does ASEAN need unique MRA governance that features both harmonization and mutual recognition? We find several valid practical explanations, such as limitations of supranational power, confidence building among members, and capacity development More fundamentally, neither simple harmonization nor simple mutual recognition functions well in ASEAN, where three types of gaps exist among member states The diversity in legal backgrounds suggests that the combination of harmonization preferred by civil law countries and mutual recognition preferred by common law countries is suitable The variety in social norms ranging from market mechanisms to social safety implies that the combination of harmonization and mutual recognition is also suitable Gaps in the price and quality of professional services across ASEAN member states requires the unique approach to facilitate and control the movement of professionals and to promote the joint practice between foreign and local professionals in both high and low income countries to create a win‐win situation