Regulatory Capitalism

Regulatory Capitalism

How it Works, Ideas for Making it Work Better

John Braithwaite

Contemporary societies have more vibrant markets than past ones. Yet they are more heavily populated by private and public regulators. This book explores the features of such a regulatory capitalism, its tendencies to be cyclically crisis-ridden, ritualistic and governed through networks. New ways of thinking about resultant policy challenges are developed.

Chapter 2: The Cyclical Nature of the Challenges of Regulatory Capitalism

John Braithwaite

Subjects: economics and finance, public sector economics, politics and public policy, public policy, regulation and governance, social policy and sociology, economics of social policy


Chapter 1 made reference to watersheds in regulatory growth such as the New Deal. Yet it could be read as suggesting a continuous growth of regulation that took off at an accelerating rate after 1970 as the era of regulatory capitalism dawned. While it is true that overall there was growth of regulatory institutions throughout the nineteenth and twentieth centuries that accelerated after 1970, different domains of regulation grew in different periods of the past 200 years and they grew unevenly, in spurts. Much of my writing about regulation has been about how scandal has produced such spurts (in nursing-home regulation (Braithwaite et al. 2007), coal mine safety (Braithwaite 1985), pharmaceuticals (Braithwaite 1984) and the regulation of corruption (Fisse and Braithwaite 1993, for example)). Non-governmental organizations that are regulatory model mongers actively promote regulatory growth by keeping a list of regulatory development projects in their back drawer until the right disaster comes along (Braithwaite and Drahos 2000: ch. 25). The fire safety reformer waits for a disastrous fire to promote new building regulations for more resistant materials. The environmentalist waits for the tanker to run aground to promote new laws to control oil spills at sea. To this extent the cyclical nature of regulatory capitalism is a purposive creation of reformers who decide for long periods to keep their reform projects in their back drawer until the ripe moment arrives. The topic-selectiveness of cycles of regulatory growth is a result of an issue-attention cycle (Downes 1972) in which...

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