Chapter 31: Process-Oriented Regulation: Conceptualization and Assessment
Sharon Gilad The 1980s and 1990s saw an expansion of regulation as a mechanism of governance, including the introduction of independent regulatory agencies, in Europe and beyond and in both economic and social regulatory spheres. Yet alongside this expansion was increased awareness of the limitations and costs of regulation. As discussed in this chapter, detailed rules are an inherently limited tool with which to manage heterogeneous, complex and fast-moving industries. As a result, regulation can pose excessive burdens on regulated firms, while providing consumers with limited benefits. Consequently, regulators were almost bound to attract dual blame for “red tape” and for firms’ underperformance. One response to the criticism and to the apparent failures of prescriptive regulation was the introduction of cost–benefit analysis and thereafter regulatory impact assessment as discussed by Shapiro (2011) and Wegrich (2011). In addition, as discussed in this chapter, regulators in different countries and domains have been experimenting with regulatory strategies that allow firms to adapt regulation to their individual circumstances, while holding them accountable for the adequacy and efficacy of their self-regulation systems. Similar trends have been observed in state regulation of health and safety (e.g. Gunningham 1999, 2007; Hutter 2001; Gunningham and Sinclair 2009), food safety (e.g. Coglianese and Lazer 2003; Fairman and Yapp 2005), financial markets (Black et al. 2007; Power 2007; Black 2008; Ford 2008), environmental protection (e.g. Fiorino 2001; Eisner 2004; Bennear 2006, 2007; Coglianese and Nash 2006), and even airport security (Haines 2009). Many labels have been coined to categorize...
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