Compliance costs,regulation, and environmental performance: Controlling truck emissions in the US

When explaining regulatory policymaking and the behavior of regulated business firms, scholars have supplemented economic models by emphasizing the role of public‐regarding entrepreneurial politics and of normative pressures on firms. This article explores the limits of such entrepreneurial politics and “social license” pressures by examining regulation of emissions from diesel powered trucks in the US. We find that the economic cost of obtaining the best available control technology – new model lower emissions engines – has: (i) limited the stringency and coerciveness of direct regulation of vehicle owners and operators; (ii) dwarfed the reach and effectiveness of the governmental programs that subsidize the purchase of new less polluting vehicles; and (iii) elevated the importance of each company’s “economic license”– as opposed to its “social license”– in shaping its environmental performance. The prominence of this “regulatory compliance cost” variable in shaping both regulation and firm behavior, we conclude, is likely to recur in highly competitive markets, like trucking, that include many small firms that cannot readily either afford or pass on the cost of best available compliance technologies.     

National TV broadcasting and the rise of the regulatory state

Using historical, theoretical and empirical arguments, this paper puts forth the notion that it was the rise of US national TV networks in the late 1960s that led to the expansion of federal social regulation and a simultaneous decline of federal economic regulation in the 1970s. The paper argues that national TV networks changed the relative position of national versus local and regional producers and sellers of goods and services. Instead of preferring state and local social regulation, the emerging national firms preferred federal social regulation. Since national markets were emerging, the same national firms lobbied for regulatory reform in transportation and communication services. The rise of national markets associated with national TV networks also stimulated a demand for mergers and consolidations. Data describing these various phenomena are provided in the paper.     

Introduction to Neumann: law and socialist political theory

Abstract

Regulators attempt to understand financial markets and their risks in terms of categories of knowledge and datasets that are defined and produced by the markets. However, regulators cannot adequately interpret or utilize such knowledge, for reasons including their social distance from the sites of knowledge production, the diversity of financial firms’ proprietary risk models, firms’ abilities to game the rules thus rendering the ‘metrics’ meaningless and several backfiring aspects of global regulatory networking and reform. Calls for yet more information about trading, posed in terms of the merits of transparency, result in information swamping of regulators. Meanwhile, while policy-makers tinker with regulatory structures (‘architecture’), political reaction to the crisis de-legitimizes public regulation as a project. Yet there is one positive aspect of the reforms – enhancing powers for ‘resolution’ of financial firms in ways that impact upon investors while minimizing wider destabilization – upon which the regulatory information requirement can and should be refocused. To protect the public interest, legal transparency is required, trading transparency is not. This paper introduces these issues by drawing on critical work on transparency and markets.     

The iteration deficit in responsive regulation: Are regulatory ambassadors an answer?

One reason that regulation is difficult is that repeated encounters between regulator and regulatee are rare. We suggest diplomacy as a model for reconfiguring regulatory institutions in response. Ambassadors for Regulatory Affairs who would be agents for all state regulatory agencies could be based in most large firms and small and medium enterprises that pose unusual regulatory risks. In rural towns, police would be trained as regulatory ambassadors. Just as a US Secretary of State can launch a “diplomatic surge” in Myanmar from 2009, so regulatory surges are possible in market sectors of high risk or high opportunity. We propose strategies of indirect reciprocity as a way in which reciprocity that is only episodic in these strategic ways can promote more general responsiveness. Indirect reciprocity is reciprocity that we do not personally experience, but learn from the experience of a culture. This means that so long as we sustain regulation as a relational as opposed to a purely technocratic process, indirect reciprocity might civilize regulatory compliance in an historical process informed by the theories of Elias and Putnam.     

Information Symmetry in U.S. Financial Market Regulation: A Community of Practice

ABSTRACT

In the last decade, regulation of the financial markets in the United States has received significant attention. In particular, the formal structures responsible for regulating the financial markets have come under heavy criticism. While we may emphasize the role that formal structures play in controlling behavior, informal structures play an important role too. This study examines an informal structure in financial market regulation. Using social network and interview data, this study defines and investigates the role of a community of practice among leaders involved in regulating the financial markets. The analysis empirically defines the characteristics of this community of practice and reveals that this informal structure serves as an information symmetricizer in this regulatory setting. Implications of information symmetry include both positive and negative consequences.     

Private regulation and global economic change: The drivers of sustainable agriculture in Brazil

What determines the uptake of private sustainability regulation in developing countries? Existing studies point to the local context as the key explanatory factor. In particular, they identify local program characteristics, industry structures, and the regulatory environment as variables influencing program uptake at the point of production. However, examining two very similar certification programs in Brazil's soy and sugarcane industries, this article finds that local conditions fail to account for the observed patterns. A “local explanation” would have predicted similar levels of industry uptake in the two sectors. Conversely, it is found that Brazil's soy producers first backed but then opposed private sustainability regulation, whereas in the sugarcane sector the dynamic was exactly the opposite. Through an in‐depth analysis and cross‐case comparison this article reveals how changing transnational conditions were decisive in shaping these outcomes. Specifically, shifting end markets exposed the two sectors to different economic and regulatory pressures.     

Out of tune or well tempered? How competition agencies direct the orchestrating state

This article analyzes the impact competition agencies have on the orchestrating role of states in domestic private regulation. I argue that these agencies can significantly affect interactions in the governance triangle through the way they apply a “logic of the market” to evaluate agreements between firms. The regulatory framework of European Union competition law has increasingly constrained the ability of firms to take into account broader interests when making agreements to foster social objectives. This logic of the market clashes with the ever‐increasing emphasis governments place on enabling firms to enter into such agreements. I analyze this tension through a case study of a pact of Dutch retailers to collectively introduce higher animal welfare standards for poultry. Using regulatory network analysis I trace the governance interactions between the governance triangle on the one hand (government, non‐governmental organizations, and firms), and the Dutch competition authority, Autoriteit Consument en Markt (ACM) and the European Commission on the other hand. Attempts by the Dutch government to instruct the ACM to be more lenient toward private regulation were blocked twice by the European Commission. As a result, the Dutch government abandoned private regulation as the preferred mode and proposed a bottom‐up process that would generate public regulation as a way to avoid conflict with competition policy. I argue that paradoxically enough the intervention of these non‐majoritarian competition agencies against the “will” of the governance triangle has potentially increased the effectiveness and legitimacy of orchestration processes.     

'Habitation vs. Improvement' and a Polanyian Perspective on Bank Bail-outs

The bank bail-outs enacted by the Brown government in the wake of the 2007 credit crunch have had a distinctive political character. Despite the government's pronouncements on the merits of swift and decisive interventions, I argue that this does not amount to a return to the interventionist regulatory form associated with post-war British welfare capitalism. The Polanyian distinction between 'habitation' and 'improvement' is used to show that the bail-outs were designed by contrast to defend the underlying deregulatory logic of the existing financial regime. The only real change of note was to uncover forcibly the often hidden influence of the state in the making and regulation of an ostensibly market-led neoliberalism and the creation instead of a much more overt state-led neoliberalism. Habitation strategies were incorporated into a structure of financial deregulation, making it more rather than less difficult to rejuvenate state capacities consistent with enhancing societal welfare. The bank bail-outs offered short-term salvation for distressed firms within the financial sector without providing the state with socialised control over the conduct of banking business in order to promote forms of social policy consistent with post-war British welfare capitalism.     

Public Health and the Regulatory State

Public health has moved from the public good component of health to everything related to health and, then, to everything related to society. If we take public health in its wide, total, social sense, it presumably explains or justifies much of the regulatory state. Virtually all state activities contribute directly or indirectly to some citizens’ “physical, mental and social well-being” (as the World Health Organization’s definition says). Public health requires social engineering, which cannot be achieved without controlling the lifestyles that the Philosopher King doesn’t like. Controlling lifestyles cannot be done without regulating the businesses that would allow people to satisfy their sinful preferences, and without preventing these people from circumventing the controls through black markets or other violations of government regulation.     

Racing to the Bottom? Trade,Environmental Governance,and ISO 14001

Globalization critics argue that international trade spurs a race to the bottom among national environmental standards. ISO 14001 is the most widely adopted voluntary environmental regulation which encourages firms to take environmental action beyond what domestic government regulations require. Drawing on a panel study of 108 countries over seven years, we investigate conditions under which trade linkages can encourage ISO 14001 adoption, thereby countering environmental races to the bottom. We find that trade linkages encourage ISO 14001 adoption if countries' major export markets have adopted this voluntary regulation.     

Tracing and periodizing China's food safety regulation: A study on China's food safety regime change

How has China's food safety administrative system changed since it was founded in 1949? How can we periodize the process of this historical transformation in terms of regulators, regulatees, and regulatory tools? This review article offers an analytical framework that distinguishes three regimes in the history of China's food safety governance: an old regime of command and control (1949–1977), an intermediate regime of mixed instruments (1978–1992), and a new regime of regulatory governance (1993–ongoing). In the article the regimes' features, advantages, disadvantages, and development tracks are discussed, and the groundwork is laid for an analysis of China's emerging regulatory state. Finally, a new notion of “transitional regulatory state” is used to define the current Chinese regulatory state based on its food safety regulation.     

Judicious Incentives: International Public Policy Responses to the Globalization of Environmental Management

Public policymakers and regulators worldwide are grappling with the desire to improve environmental quality through appropriate regulation of business, while also streamlining government. Concurrently, environmentally conscience consumers are calling for improved environmental performance by industry. As a result of these pressures, regulators and lawmakers worldwide are attempting to craft effective policies that create adequate incentives for environmental protection on the part of firms, in the face of decreasing budgets and an increased demand for the use of market‐based incentives. To aid decision makers as they struggle with these concerns, this study provides a detailed case examination of the dilemmas and responses of national‐level regulators as they try to develop appropriate responses to the rise of international and “voluntary” management regimes. To accomplish these goals, this article compares the public policy responses of governments around the world to one such voluntary international environmental regime: ISO 14001. ISO 14001 is a form of industry self‐regulation in response to market forces calling for harmonization in environmental management and as a result of consumer and trade‐partner demands. This study examines the relationships between regulators and the regulated in order to understand if ISO 14001 certified firms are receiving regulatory relief or other forms of public policy/regulatory benefits as a result of their certification. It will also examine the impact that government incentives (or their absence) are having on the certification decisions of firms around the world. This information helps us to begin to understand how the trends toward smaller government and voluntary environmental regimes are affecting one another.     

Legitimacy through targeted transparency? Regulatory effectiveness and sustainability of lobbying regulation in the European Union

Regulating interest groups’ access to decision makers constitutes a key dimension of legitimate and accountable systems of government. The European Union explicitly links lobbying regulation with the democratic credentials of its supranational system of governance and proposes transparency as a solution to increase legitimacy and regulate private actors’ participation in policy making. This lobbying regulation regime consists of a Transparency Register that conditions access to decision makers upon joining it and complying with its information disclosure requirements. The extent to which transparency‐based regulatory regimes are successful in ensuring effective regulation of targeted actors and in being recognised as a legitimate instrument of governance constitutes a key empirical question. Therefore, the study asks: Do stakeholders perceive the transparency‐based EU lobbying regulation regime to be a legitimate form of regulatory governance? The study answers by building on a classic model of targeted transparency and proposes perceived regulatory effectiveness and sustainability as two key dimensions on which to evaluate the legitimacy of the Register. The arguments are tested on a new dataset reporting the evaluations of 1,374 stakeholders on the design and performance of the EU lobbying regulation regime. The findings describe a transparency regime that scores low in perceived effectiveness and moderate to low in sustainability. Citizens criticise the quality of information disclosed and the Register's performance as a transparency instrument. The Register did not effectively bridge the information gap between the public and interest groups about supranational lobbying. In terms of sustainability, interest organisations appreciate the systemic benefits of transparency, but identify few organisation‐level benefits. Organisations that are policy insiders incur more transparency costs so they instrumentally support transparency only insofar it suits their lobbying strategies and does not threaten their position. Insiders support including additional categories of organisations in the Register's regulatory remit but not more types of interactions with policy makers. They support an imperfect regulatory status quo to which they have adapted but lack incentives to support increased transparency and information disclosure. Targeted transparency proves an ineffective approach to regulating interest groups’ participation in EU policy making, constituting a suboptimal choice for ensuring transparent, accountable and legitimate supranational lobbying.     

The liberalization and (re)regulation of Dutch gambling markets: National consequences of the changing European context

This paper deals with the liberalization of Dutch gambling markets, in particular the (re)regulation of these markets after 2002. It is argued that during the 1990s a neo‐liberal “risk regime” of gambling regulation replaced the traditional moralizing and restrictive gambling policies. However, this risk regime has recently been challenged by the development of Internet gambling, the discussions about the “Services Directive” in the European Parliament and cases brought to the European Court of Justice. These circumstances are redefining the European context for national gambling policies and gambling organizations. Together with a growing risk awareness, this has caused the Dutch government to reconsider its gambling policies. This paper outlines the basic features of the risk regime of gambling regulation, and makes clear that after a decade of great leniency and tremendous market growth, the Dutch gambling markets, including casinos, lotteries and slot machines, were confronted with serious backwashes.     

The dark side of price cap regulation: a laboratory experiment

In a nutshell, price cap regulation is meant to establish a quid pro quo: regulators are obliged by law to intervene only at rare, previously defined points in time, and only by imposing an upper bound on prices; firms are meant to justify regulatory restraint by adopting socially beneficial innovations. In the policy debate, a potential downside of the arrangement has featured less prominently: the economic environment is unlikely to be stable while the cap is in place. If regulators take this into account, they have to decide under uncertainty and also anticipate how regulated firms will react. In a lab experiment, we manipulate the degree of regulatory uncertainty. We compare a baseline when regulators have the same information as firms about demand with treatments wherein they receive only a noisy signal and another when they know only the distribution from which demand realizations are taken. In the face of uncertainty, regulators impose overly generous price caps, which firms exploit. In the experiment, the social damage is severe, and does not disappear with experience.     

Regulatory Competition and the Politics of Financial Market Reform in Britain and Japan

This article examines the impact that the internationalization of jnance has had on the regulation of domestic securities markets in Japan and Britain. In particular, it seeks to explain the apparent incompatibility of two distinct trends: deregulation (and state retreat) on the one hand, and increased regulation and state involvement in markets on the other.
Much of the literature about the efects of internationalization on domestic policymaking has drfjculty explaining these two distinct regulatory frends. First, there has been no uniform "competition in regulatory laxity." Second, the United States does not appear to have exerted hegemonic influence over outcomes. Finally, domestic-level explanations which deny the importance of systemic-level influences on domestic policy choices are unable to explain the similarity of policy choices undertaken by governments with very different regulatory traditions.
I argue instead that regulatory reforms have been undertaken primarily for the benefit of a particular set of private economic actors—mobile consumers of financial services, including both holders of liquid investment capital and large multinational borrowers. Internationalization has systematically strengthened their influence over the policymaking process by making "exit" from one political marketplace to another a more realistic and more potent bargaining strategy than the alternative of exercising "voice."     

Some Implications of Corporate Taxation for Rent-Seeking Activity

In this paper we show that corporate taxes are likely to have considerable implications for rent-seeking activity. We find that corporate taxation tends to significantly reduce rent-seeking, and that it favors rent-seeking by established firms and discriminates against new and zero profit firms. Indeed, we show that corporate tax regulations may completely block rent-seeking by new corporations, and that rent-seeking competitions may be characterized by an equilibrium that features a small number of profitable and well established firms. Tax regulations may therefore impart an oligopolistic tendency to rent-seeking markets. Moreover, our results may have significant implications for the effects of corporate taxes on patent races, tournaments, and other first-past-the-post competitions.     

Growing exports by signaling product quality: Trade competition and the cross‐national diffusion of ISO 9000 quality standards

Trade policy is an important topic in global public policy. It is recognized that trade is hampered when buyers have incomplete information about the offered products, a problem accentuated in the international markets by the physical and cultural distances between buyers and sellers. Buyers look for proxies to assess product quality, and exporters that can provide assurance about quality gain a competitive advantage. Our paper focuses on voluntary or private regulatory programs that have emerged as important instruments to correct policy failures. We examine how trade competition motivates firms to signal quality by joining ISO 9000, the most widely adopted voluntary quality certification program in the world. Methodologically, our study is novel because we observe trade competition at the bilateral and the sectoral levels. Structural equivalence, the measure of competition we introduce in this paper, captures competitive threats posed by actors that export similar products to the same overseas markets. We study ISO 9000 adoption levels from 1993 to 2002 for 134 countries, and separately for non‐OECD countries and non‐EU countries. Across a variety of specifications, we find that trade competition drives ISO adoption: The uptake of ISO 9000 is encouraged by ISO 9000 adoption by firms located in countries that are “structurally equivalent” trade competitors. Given that information problems about product quality are likely to be more salient for developing country exporters, we find that trade competition offers a stronger motivation for ISO 9000 adoption in non‐OECD countries in relation to developed countries. © 2010 by the Association for Public Policy Analysis and Management.     

Corporate response strategies to regulatory uncertainty: evidence from uncertainty about post-Kyoto regulation

A better understanding of firms’ response strategies to regulatory uncertainty enables policymakers to improve policymaking efficiency and to enhance the effectiveness of regulation. Based on a literature review, we categorize responses according to their objective toward regulatory uncertainty into four strategies: avoidance, reduction, adaptation, and disregard strategies. Unique data from a worldwide cross-industry survey show that firms predominantly pursue reduction, and to a lesser extent adaptation and disregard strategies, in response to post-Kyoto regulatory uncertainty. Surprisingly, firms in fact only sporadically pursue avoidance strategies, in contradiction to their own public announcements commonly made during policymaking to realize such strategies. The degree of regulatory uncertainty perceived and its interpretation as a threat increase the pursuit of most of these strategies. In addition, firms’ response strategies to post-Kyoto regulatory uncertainty differ across industries and partly across regions.     

The creation of neo-liberal corporate bias in transnational medicines control: The industrial shaping and interest dynamics of the European regulatory state

Abstract. Drawing on the political theories of corporatism, neo–liberalism and pluralism, and on comparative empirical research in Brussels, Germany, Sweden and the UK, this article conceptualises the nature of Europeanised medicines regulation. It argues that a marketisation of regulation has been established in the European Union as a result of competition between national regulatory agencies for 'regulatory business' from the pharmaceutical industry. In the pharmaceuticals sector the Europeanised regulatory state is a product of three key factors: (a) the European Commission's commitment to an 'efficiency' regime which would meet the political objectives of a single European market and the commercial agendas of transnational pharmaceutical companies, (b) the endemic corporate bias associated with medicines regulation in the most influential member states, and (c) the considerable success of neo–liberal politics across a number of major member states, including Germany, Sweden and the United Kingdom.