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 4: The Nodal Governance Critique of Responsive Regulation

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


1 There are many critiques of responsive regulation (for example, Black 1997; Haines 1997; 2005b; Pearce and Tombs 1997; Gunningham and Grabosky 1998; Glasbeek 2002; Tombs 2002; Vincent-Jones 2002; Scott 2004; Yeung 2004; Barton 2006; Maxwell and Decker 2006; Nielsen 2006; Parker 2006; Feld and Frey 2007; Gunningham 2007; Rawlings 2007; Waller 2007; Wood and Shearing 2007). It is not the purpose of this chapter to address all the insightful lines of attack that have been made on the theory, just some that are centrally relevant to the regulatory capitalism theme of this book. The most common criticism is the least accurate: that responsive regulation is a statist theory, merely about what state regulators should do. Were it true, this really would be an important critique in terms of its relevance to an era of networked governance. The reason some have made this critique relates to the way they have focused upon the first two chapters of the most influential presentation of the theory in the book by Ian Ayres and John Braithwaite (1992) titled Responsive Regulation. Even with that book, it is a strange critique in that chapter 3 is about tripartism. Chapter 3 is about the way state regulators are prone to capture, corruption and weak accountability unless there are third players of the game who are neither business nor state players. Moreover, earlier writings on enforced selfregulation (Braithwaite 1982) and on the regulatory pyramid (Braithwaite 1985) were embued with learnings from mine-safety research that found unionized...

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