HAL Id: hal-02356384
https://hal-sciencespo.archives-ouvertes.fr/hal-02356384
Submitted on 11 Oct 2020
HAL is a multi-disciplinary open access
archive for the deposit and dissemination of sci-
entic research documents, whether they are pub-
lished or not. The documents may come from
teaching and research institutions in France or
abroad, or from public or private research centers.
L’archive ouverte pluridisciplinaire HAL, est
destinée au dépôt et à la diusion de documents
scientiques de niveau recherche, publiés ou non,
émanant des établissements d’enseignement et de
recherche français ou étrangers, des laboratoires
publics ou privés.
The new political economy of regulation
Cyril Benoît
To cite this version:
Cyril Benoît. The new political economy of regulation. French Politics, 2019, 17 (4), pp. 482-499.
�hal-02356384�
The New Political Economy of Regulation
Cyril Benoît
∗
Working Paper (this draft: September 2019)
Abstract
Over the last twenty years, the study of economic regulation has attracted grow-
ing attention in political research. But what is so political about regulation? And
what is ‘new’ in the political analysis of this topic? We argue that the answer
to both of these questions lies in the evolution of the conception of regulatory
power in political research. To validate this claim, we first review the main de-
velopments that followed the introduction of agency-theoretic models in this field.
While recognizing their insights, we argue that these contributions rest on a narrow,
essentially directive conception of regulatory power. With regard to more recent
developments, we then show how a focus on other facets of the politics of regula-
tion has connected it to broader political science questions. This focus significantly
improves our understanding of regulation’s influence on economic activities, public
policy, and ultimately, on the politics of economic regulation in the broadest sense
of the term.
∗
CNRS - Sciences Po. Contact:cyril.benoit1@sciencespo.fr
1 Introduction
Since the mid-1980s, the spread of neoliberal ideas has paired with significant changes
in the governance structures of capitalist economies. Western countries have transferred
ownership of key industries to the private sector and have developed regulatory super-
vision over their activities – mostly through independent regulatory agencies endowed
with statutory powers (Yeung 2010). This bureaucratic form also diffused in a number of
other economic areas in the course of the following decades. In this context, a large body
of research has established that states have becoming increasingly “preoccupied with the
regulation part of governance”, in the sense that they now tend to prioritize “steering the
flow of events”, as opposed to directly influencing economic activity through unilateral
actions (Braithwaite 2011). Much attention has been paid to the study of “the making”
of this “new regulatory order” (Levi-Faur and Jordana 2005b), of so-called “regulatory
states” (see for e.g. Majone 1994; Hood et al. 1999; Moran 2003) and of the global dif-
fusion of “regulatory capitalism” (Levi-Faur 2005; see also Jordana and Levi-Faur 2006).
These extensive transformations also gave rise to renewed interest in political research
for the study of regulation not only as a mere form of governance but also as a concrete
form of intervention by public-sector actors in economic activities (Koop and Lodge 2017;
see also Baldwin et al. 1998). In contrast with the aforementioned contributions, these
works usually involve fine-grained analysis, focusing on how bureaucratic agents regu-
late firms or other organized interests, usually on behalf of a political principal. Until
recently, regulation in this narrower sense has traditionally been considered the most
obvious, albeit less sophisticated type of coercion available to government (Lowi 1972).
However, new waves of research dating back to the early 1990s have gradually dis-
covered how this topic lends itself to addressing broader questions. This trend amplified
in the following decades with the forging of more subtle and complex networks of regula-
1
tory instruments, alongside the rise of regulatory states (see Baldwin et al. 2012). This
contribution is primarily a discussion of the findings that followed this move towards
a more substantial study of economic regulation. More fundamentally, it highlights a
gradual extension of the definition of regulatory power in the literature. Power is indeed
the central dimension of interest for any student of economic regulation – the power
of a firm over a regulator (and vice-versa); the power of organized consumers, the me-
dia, and third parties throughout the regulatory process; the power of politicians over
a regulatory body, and so forth. In short, our main argument here is that research has
gradually shifted from an essentially ‘directive’ conception of regulatory power to increas-
ingly integrate its ‘gatekeeping’ and ‘conceptual’ facets. A large body of literature has
emerged to investigate a wider range of political science themes through the lens of eco-
nomic regulation, ranging from the foundations of state legitimacy and of bureaucratic
accountability, interdependence between public and private bureaucracies, and relations
between politicians and regulatory bodies – among many other subjects, some yet to be
explored. Formally identified and defined by political scientist Dan Carpenter (2010a),
the directive, gatekeeping and conceptual conceptions of regulatory power are thus used
here both for classification and analytical purposes.
Directive power refers to a “broad formal authority to direct the behaviour of others”
(ibid). In a way, it is the form of power that has dominated the study of economic regu-
lation for decades. Without jettisoning this conception, a generation of scholars has used
agency theory to offer more comprehensive approaches to studying the politics of regu-
lation. This development notably helped widen the range of actors included in research
on economic regulation to include legislative bodies, legislators, executives, and courts.
A second wave of studies developed finer conceptions of regulatory power in the 2000s
and 2010s. A growing body of research started to study it as an ability for regulation to
2
“define what sorts of problems, debates and agendas structure human activity”, namely
its ‘gatekeeping’ dimension (Carpenter 2010a). Instead of presenting regulatory bodies
as vacuums across which political, industrial, and other special interests transited, schol-
ars started to investigate the “forging” of bureaucratic autonomy (Carpenter 2001) – and
in turn, the implications of such autonomy for regulators’ legitimacy and ultimately, to
shape public policy or embody state legitimacy.
The ‘conceptual’ nature of regulatory power was then increasingly acknowledged. In
its broadest sense, this term refers to regulatory agencies’ and regulators’ ability, some-
times in the very course of the regulatory process, to “shape the content and structure
of human cognition itself” through a variety of standards and ideas (Carpenter 2010a).
More specifically, it refers to the ability of regulators to require that various private actors
use a diversity of concepts and metrics in their daily activities. As they become ingrained
in everyday business practices, regulatory concepts help change the perception of public
problems and usher new behaviours. In a number of respects, this process shares similar
features with those identified by research on state development (see King and Stears
2011). We believe that such transformations of the field justify this article’s title – the
new political economy of regulation. This is not to suggest that the literature now re-
sembles a theoretical monoculture. The different contributions presented in the following
pages admittedly display considerable variations. Still, we think that a higher level of
analysis enables the identification of a twofold novelty in relation to pre-1990s studies of
economic regulation. First, the research on economic regulation now considers a large
and complex set of collective and individual actors. Second – and more fundamentally –
substantial refinements of the conception of power have shaped contemporary studies in
the field. As such, these contributions ultimately helped shed light on the relationships
between various governing and governed entities in the age of regulatory governance.
3