Chapter 2: The Institutional Foundations of the Regulatory State
INTRODUCTION There is a consensus in the literature that over the last 20 years regulation has acquired an unprecedented place in European countries. Liberalization and privatization have not led to laissez-faire capitalism: freer markets have been accompanied by more, not fewer, rules (Vogel, 1996). At the same time, regulation has gained ground relative to production and redistribution, which had been the state’s two main functions. This trend has been famously called the ‘rise of the regulatory state’ (Majone, 1997a): regulation has become a primary activity of governments. It is not only the state that regulates private activities, however: private actors are also involved in regulation, and regulation exists within government. To account for this complex pattern of regulatory practices, the concept of ‘regulatory capitalism’ has recently been put forward (Levi-Faur, 2005b, 2006a). Regardless of the scope of the phenomenon (is it limited to the state, or is it broader?), its main institutional manifestation is independent regulatory agencies. In all countries and in a wide range of domains, governments have delegated regulation to specialized authorities that, by design, cannot be directly controlled. Of course, the precise features of these authorities vary greatly across countries and domains; indeed, the analysis of these variations is one of the main objectives of this book. All these authorities, however, are deliberately insulated from political control. While the United States has a long tradition of regulation to independent commissions, this is a major innovation for European countries, although not to the same degree in each. This...
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