Chapter 5: Regulatory Reform in the Shadow of Disaster
This chapter assesses the regulatory response to each of the disasters. It reveals how regulatory reform was simultaneously propelled by the crisis event (described in Chapter 4), yet also shaped by political risk management aimed at protecting industrial investment whilst reassuring the citizenry that their safety and security needs were paramount. The strategies employed by governments in managing their political risk variously proved a key stumbling block or facilitator of effective reform dependent, in particular, on whether their management of political risk included strong support of the relevant regulators. This support, combined with sufficient technical expertise within, or able to be accessed by, the regulatory authority was the critical combination for effective reform. Both the geographical location of each disaster and the type of actuarial risk in question also affected regulatory reform. Common themes were apparent across the various regimes: the challenges of sustaining the reform effort and of retaining good people with both technical knowledge and political acumen. Yet there were key differences. Some of these could be explained not by the type of actuarial risk (major hazard or financial risk, for example) but by the level of political risk the disaster posed to the particular government. But the type of actuarial risk also could have a distinctive effect on reform. There were particular challenges for effective financial regulatory reform and it was this area that was most affected by the economic cycle and government pursuit of ‘good economic times.’ Financial disaster management, in terms of setting up a...
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