Regulation
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| Basic concepts |
| Anti-competitive practices |
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Regulationis the management ofcomplex systemsaccording to a set of rules and trends. Insystems theory,these types of rules exist in various fields ofbiologyandsociety,but the term has slightly different meanings according to context. For example:
- ingovernment,typically regulation (or its plural) refers to thedelegated legislationwhich is adopted to enforce primary legislation; includingland-use regulation
- in economy:regulatory economics
- in finance:Financial regulation
- in business,industry self-regulationoccurs throughself-regulatory organizationsandtrade associationswhich allow industries to set and enforce rules with less government involvement; and,
- in biology,gene regulationandmetabolic regulationallow living organisms to adapt to their environment and maintainhomeostasis;
- in psychology,self-regulation theoryis the study of how individuals regulate their thoughts and behaviors to reach goals.
Social
[edit]Regulation in the social, political, psychological, and economic domains can take many forms:legalrestrictions promulgated by agovernmentauthority, contractual obligations (for example, contracts between insurers and their insureds[1]),self-regulationin psychology,social regulation(e.g.norms), co-regulation, third-party regulation, certification, accreditation or market regulation.[2]
State-mandated regulation is government intervention in the private market in an attempt to implementpolicyand produce outcomes which might not otherwise occur,[3]ranging from consumer protection to faster growth or technological advancement.
The regulations may prescribe or proscribe conduct ( "command-and-control" regulation), calibrate incentives ( "incentive" regulation), or change preferences ( "preferences shaping" regulation). Common examples of regulation include limits on environmentalpollution,laws against child labor or otheremploymentregulations,minimum wageslaws, regulations requiring truthful labelling of the ingredients in food and drugs, and food and drug safety regulations establishing minimum standards of testing and quality for what can be sold, and zoning anddevelopment approvalsregulation. Much less common are controls on market entry, orpriceregulation.
One critical question in regulation is whether the regulator or government has sufficient information to make ex-ante regulation more efficient than ex-post liability for harm and whether industry self-regulation might be preferable.[4][5][6][7]Theeconomicsof imposing or removing regulations relating tomarketsis analysed in empirical legal studies, law and economics, political science, environmental science,health economics,andregulatory economics.
Power to regulate should include the power to enforce regulatory decisions. Monitoring is an important tool used by national regulatory authorities in carrying out the regulated activities.[8]
In some countries (in particular the Scandinavian countries) industrial relations are to a very high degree regulated by the labour market parties themselves (self-regulation) in contrast to state regulation of minimum wages etc.[9]
History
[edit]Regulation of businesses existed in theancientearly Egyptian, Indian, Greek, and Roman civilizations. Standardized weights and measures existed to an extent in the ancient world, and gold may have operated to some degree as an international currency. In China, a national currency system existed and paper currency was invented. Sophisticated law existed inAncient Rome.In the EuropeanEarly Middle Ages,law and standardization declined with the Roman Empire, but regulation existed in the form of norms, customs, and privileges; this regulation was aided by the unified Christian identity and a sense of honor regardingcontracts.[10]: 5
Modern industrial regulation can be traced to theRailway Regulation Act 1844in the United Kingdom, and succeeding Acts. Beginning in the late 19th and 20th centuries, much of regulation in the United States was administered and enforced byregulatory agencieswhich produced their ownadministrative lawand procedures under the authority of statutes. Legislators created these agencies to require experts in the industry to focus their attention on the issue. At the federal level, one of the earliest institutions was theInterstate Commerce Commissionwhich had its roots in earlier state-based regulatory commissions and agencies. Later agencies include theFederal Trade Commission,Securities and Exchange Commission,Civil Aeronautics Board,and various other institutions. These institutions vary from industry to industry and at the federal and state level. Individual agencies do not necessarily have clearlife-cyclesor patterns of behavior, and they are influenced heavily by their leadership and staff as well as theorganic lawcreating the agency. In the 1930s, lawmakers believed that unregulated business often led to injustice and inefficiency; in the 1960s and 1970s, concern shifted toregulatory capture,which led to extremely detailed laws creating theUnited States Environmental Protection AgencyandOccupational Safety and Health Administration.
Measurement
[edit]Regulation can be assessed for different countries through various quantitative measures. The Global Indicators of Regulatory Governance[11]byWorld Bank's Global Indicators Group scores 186 countries on transparency around proposed regulations, consultation on their content, the use of regulatory impact assessments[12]and the access to enacted laws on a scale from 0 to 5. TheV-Dem Democracy indicesinclude the regulatory quality indicator.[13]The QuantGov project[14]at theMercatus Centertracks the count of regulations by topic for United States, Canada, and Australia.
See also
[edit]- Consumer protection– Protect consumers against unfair practices
- Rulemaking– Process by which executive branch agencies create regulations
- Regulatory state– term referred to the expansion in the use of rulemaking, monitoring and enforcement techniques and institutions by the state and to a parallel change in the way its positive or negative functions in society are being carried out
- Deregulation– Remove or reduce state regulations
- Environmental law– Branch of law concerning the natural environment
- Occupational safety and health– Field concerned with the safety, health and welfare of people at work
- Public administration– Academic discipline; implementation or management of policy
- Regulation of science
- Regulatory capture– Form of political corruption
- Regulatory economics– Economics of regulation
- Tragedy of the commons– Self-interests causing depletion of a shared resource
- Public choice– Economic theory applied to political science
- Precautionary principle– Risk management strategy
References
[edit]- ^Marcos Antonio Mendoza, "Reinsurance as Governance: Governmental Risk Management Pools as a Case Study in the Governance Role Played by Reinsurance Institutions", 21 Conn. Ins. L.J. 53, (2014)https://ssrn.com/abstract=2573253
- ^Levi-Faur, David, Regulation and Regulatory Governance, Jerusalem Papers in Regulation and Governance, No. 1, 2010
- ^Orbach, Barak,What Is Regulation? 30 Yale Journal on Regulation Online1 (2012)
- ^Sim, Michael (2018)."Limited Liability and the Known Unknown".Duke Law Journal.68:275–332.doi:10.2139/ssrn.3121519.ISSN1556-5068.S2CID44186028– via SSRN.
- ^Schwarcz, Steven L. (2011)."Keynote & Chapman Dialogue Address: Ex Ante Versus Ex Post Approaches to Financial Regulation".SSRN Electronic Journal.doi:10.2139/ssrn.1748007.ISSN1556-5068.S2CID154354509.
- ^Hosoe, Moriki (2020),"Ex-ante Regulation, Ex-post Regulation, and Collusion",Applied Economic Analysis of Information and Risk,Singapore: Springer Singapore, pp. 49–66,doi:10.1007/978-981-15-3300-6_4,ISBN978-981-15-3299-3,S2CID216306756,retrieved2020-11-03
- ^Shavell, Steven (October 1983)."Liability for Harm Versus Regulation of Safety".Cambridge, MA.doi:10.3386/w1218.
- ^Eraldo Banovac. Monitoringgrundlagen der kroatischen Regulierungsbehörde für Energie. EW − das Magazin für die Energie Wirtschaft, Vol. 103, No. 1–2, 2004, pp. 14–16.
- ^Anders Kjellberg (2017)"Self-regulation versus State Regulation in Swedish Industrial Relations"In Mia Rönnmar and Jenny Julén Votinius (eds.)Festskrift till Ann Numhauser-Henning.Lund: Juristförlaget i Lund 2017, pp. 357-383
- ^John Braithwaite, Péter Drahos. (2000).Global Business Regulation.Cambridge University Press.
- ^Global Indicators of Regulatory Governance
- ^Organisation for Economic Co-operation and Development (2008),Introductory Handbook for Undertaking Regulatory Impact Analysis (RIA),https://www.oecd.org/gov/regulatory-policy/44789472.pdf,retrieved 4/11/23.
- ^Sigman, Rachel, and Staffan I. Lindberg. "Neopatrimonialism and democracy: An empirical investigation of Africa's political regimes." V-Dem Working Paper 56 (2017).
- ^"QuantGov".quantgov.org.RetrievedJune 4,2023.
External links
[edit]
- Centre on Regulation in Europe (CERRE)
- New Perspectives on Regulation (2009)andGovernment and Markets: Toward a New Theory of Regulation (2009)
- US/Canadian Regulatory Cooperation:Archived2011-04-30 at theWayback MachineSchmitz on Lessons from the European Union,Canadian Privy Council OfficeCommissioned Study
- A Comparative Bibliography: Regulatory Competition on Corporate Law
Wikibooks
[edit]- Legal and Regulatory Issues in the Information Economy
- Lawrence A. Cunningham, A Prescription to Retire the Rhetoric of 'Principles-Based Systems' in Corporate Law, Securities Regulation and Accounting (2007)
