Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For example:
- in government, typically regulation (or its plural) refers to the delegated legislation which is adopted to enforce primary legislation; including land-use regulation
- in economy: regulatory economics
- in finance: Financial regulation
- in business, industry self-regulation occurs through self-regulatory organizations and trade associations which allow industries to set and enforce rules with less government involvement; and,
- in biology, gene regulation and metabolic regulation allow living organisms to adapt to their environment and maintain homeostasis;
- in psychology, self-regulation theory is the study of how individuals regulate their thoughts and behaviors to reach goals.
Forms
Regulation in the social, political, psychological, and economic domains can take many forms: legal restrictions promulgated by a government authority, contractual obligations (for example, contracts between insurers and their insureds), self-regulation in psychology, social regulation (e.g. norms), co-regulation, third-party regulation, certification, accreditation or market regulation.
State-mandated regulation is government intervention in the private market in an attempt to implement policy and produce outcomes which might not otherwise occur, 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 environmental pollution, laws against child labor or other employment regulations, minimum wages laws, 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 and development approvals regulation. Much less common are controls on market entry, or price regulation.
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. The economics of imposing or removing regulations relating to markets is analysed in empirical legal studies, law and economics, political science, environmental science, health economics, and regulatory 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.
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.
Measurement
Regulation can be assessed for different countries through various quantitative measures. The Global Indicators of Regulatory Governance by World Bank's Global Indicators Group scores 186 countries on transparency around proposed regulations, consultation on their content, the use of regulatory impact assessments and the access to enacted laws on a scale from 0 to 5. The V-Dem Democracy indices include the regulatory quality indicator. The QuantGov project at the Mercatus Center tracks the count of regulations by topic for United States, Canada, and Australia. The length of Code of Federal Regulations of the United States increased over time.
History
Regulation of businesses existed in the ancient early 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 in Ancient Rome. In the European Early 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 regarding contracts.: 5
Modern industrial regulation can be traced to the Railway Regulation Act 1844 in 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 by regulatory agencies which produced their own administrative law and 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 the Interstate Commerce Commission which had its roots in earlier state-based regulatory commissions and agencies. Later agencies include the Federal 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 clear life-cycles or patterns of behavior, and they are influenced heavily by their leadership and staff as well as the organic law creating the agency. In the 1930s, lawmakers believed that unregulated business often led to injustice and inefficiency; in the 1960s and 1970s, concern shifted to regulatory capture, which led to extremely detailed laws creating the United States Environmental Protection Agency and Occupational Safety and Health Administration.
Regulatory economics
Regulatory state
Regulatory capture
Deregulation
See also
- Consumer protection – Protection of consumers against unfair practices
- Rulemaking – Process by which executive branch agencies create 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
- Regulatory science – scientific and technical foundations on which regulation is based
- Regulation of science
- 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
- 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 Online 1 (2012)
- Sim, Michael (2018). "Limited Liability and the Known Unknown". Duke Law Journal. 68: 275–332. doi:10.2139/ssrn.3121519. ISSN 1556-5068. S2CID 44186028 – 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. ISSN 1556-5068. S2CID 154354509.
- 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, ISBN 978-981-15-3299-3, S2CID 216306756, retrieved 2020-11-03
- 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
- "Global Indicators of Regulatory Governance". World Bank Group.
- "Introductory Handbook for Undertaking Regulatory Impact Analysis (RIA)" (PDF). Organisation for Economic Co-operation and Development. October 2008. Archived from the original (PDF) on Aug 4, 2023, 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. Retrieved June 4, 2023.
- "Code of Federal Regulations, Total Pages 1938 - 1949, and total volumes and pages 1950 - 2021, Federal Register" (PDF).
- John Braithwaite, Péter Drahos. (2000). Global Business Regulation. Cambridge University Press.
- Levi-Faur, David, "The Odyssey of the Regulatory State – Episode One: The Rescue of the Welfare State", Jerusalem Papers in Regulation & Governance, Paper No. 39, November 2011.
- Giandomenico Majone (1997). From the Positive to the Regulatory State: Causes and Consequences of Changes in the Mode of Governance. Journal of Public Policy, 17, pp 139-167 doi:10.1017/S0143814X00003524
- Dal Bó, Ernesto (2006). "Regulatory capture: A review". Oxford Review of Economic Policy. 22 (2): 203–225. doi:10.1093/oxrep/grj013. JSTOR 23606888.
- "Regulatory Capture Definition". Investopedia. Archived from the original on October 3, 2015. Retrieved October 2, 2015.
External links
- Centre on Regulation in Europe (CERRE)
- New Perspectives on Regulation (2009) and Government and Markets: Toward a New Theory of Regulation (2009)
- US/Canadian Regulatory Cooperation: Archived 2011-04-30 at the Wayback Machine Schmitz on Lessons from the European Union, Canadian Privy Council Office Commissioned Study
- A Comparative Bibliography: Regulatory Competition on Corporate Law
Wikibooks
- 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)
Regulation is the management of complex systems according to a set of rules and trends In systems theory these types of rules exist in various fields of biology and society but the term has slightly different meanings according to context For example in government typically regulation or its plural refers to the delegated legislation which is adopted to enforce primary legislation including land use regulation in economy regulatory economics in finance Financial regulation in business industry self regulation occurs through self regulatory organizations and trade associations which allow industries to set and enforce rules with less government involvement and in biology gene regulation and metabolic regulation allow living organisms to adapt to their environment and maintain homeostasis in psychology self regulation theory is the study of how individuals regulate their thoughts and behaviors to reach goals FormsRegulation in the social political psychological and economic domains can take many forms legal restrictions promulgated by a government authority contractual obligations for example contracts between insurers and their insureds self regulation in psychology social regulation e g norms co regulation third party regulation certification accreditation or market regulation State mandated regulation is government intervention in the private market in an attempt to implement policy and produce outcomes which might not otherwise occur 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 environmental pollution laws against child labor or other employment regulations minimum wages laws 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 and development approvals regulation Much less common are controls on market entry or price regulation 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 The economics of imposing or removing regulations relating to markets is analysed in empirical legal studies law and economics political science environmental science health economics and regulatory 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 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 Measurement Regulation can be assessed for different countries through various quantitative measures The Global Indicators of Regulatory Governance by World Bank s Global Indicators Group scores 186 countries on transparency around proposed regulations consultation on their content the use of regulatory impact assessments and the access to enacted laws on a scale from 0 to 5 The V Dem Democracy indices include the regulatory quality indicator The QuantGov project at the Mercatus Center tracks the count of regulations by topic for United States Canada and Australia The length of Code of Federal Regulations of the United States increased over time HistoryRegulation of businesses existed in the ancient early 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 in Ancient Rome In the European Early 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 regarding contracts 5 Modern industrial regulation can be traced to the Railway Regulation Act 1844 in 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 by regulatory agencies which produced their own administrative law and 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 the Interstate Commerce Commission which had its roots in earlier state based regulatory commissions and agencies Later agencies include the Federal 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 clear life cycles or patterns of behavior and they are influenced heavily by their leadership and staff as well as the organic law creating the agency In the 1930s lawmakers believed that unregulated business often led to injustice and inefficiency in the 1960s and 1970s concern shifted to regulatory capture which led to extremely detailed laws creating the United States Environmental Protection Agency and Occupational Safety and Health Administration Regulatory economicsThese paragraphs are an excerpt from Regulatory economics edit Regulatory economics is the application of law by government or regulatory agencies for various economics related purposes including remedying market failure protecting the environment and economic management Regulatory stateThese paragraphs are an excerpt from Regulatory state edit The term regulatory state refers 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 The expansion of the state nowadays is generally via regulation and less via taxing and spending The notion of the regulatory state is increasingly more attractive for theoreticians of the state with the growth in the use and application of rule making monitoring and enforcement strategies and with the parallel growth of civil regulation and business regulation Regulatory captureThese paragraphs are an excerpt from Regulatory capture edit In politics regulatory capture also called agency capture is a form of corruption of authority that occurs when a political entity policymaker or regulator is co opted to serve the commercial ideological or political interests of a minor constituency such as a particular geographic area industry profession or ideological group DeregulationThese paragraphs are an excerpt from Deregulation edit Deregulation is the process of removing or reducing state regulations typically in the economic sphere It is the repeal of governmental regulation of the economy It became common in advanced industrial economies in the 1970s and 1980s as a result of new trends in economic thinking about the inefficiencies of government regulation and the risk that regulatory agencies would be controlled by the regulated industry to its benefit and thereby hurt consumers and the wider economy Economic regulations were promoted during the Gilded Age in which progressive reforms were claimed as necessary to limit externalities like corporate abuse unsafe child labor monopolization and pollution and to mitigate boom and bust cycles Around the late 1970s such reforms were deemed burdensome on economic growth and many politicians espousing neoliberalism started promoting deregulation See alsoConsumer protection Protection of consumers against unfair practices Rulemaking Process by which executive branch agencies create 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 Regulatory science scientific and technical foundations on which regulation is basedPages displaying wikidata descriptions as a fallback Regulation of science Tragedy of the commons Self interests causing depletion of a shared resource Public choice Economic theory applied to political science Precautionary principle Risk management strategyReferencesMarcos 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 Online 1 2012 Sim Michael 2018 Limited Liability and the Known Unknown Duke Law Journal 68 275 332 doi 10 2139 ssrn 3121519 ISSN 1556 5068 S2CID 44186028 via SSRN Schwarcz Steven L 2011 Keynote amp Chapman Dialogue Address Ex Ante Versus Ex Post Approaches to Financial Regulation SSRN Electronic Journal doi 10 2139 ssrn 1748007 ISSN 1556 5068 S2CID 154354509 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 ISBN 978 981 15 3299 3 S2CID 216306756 retrieved 2020 11 03 Shavell Steven October 1983 Liability for Harm Versus Regulation of Safety Cambridge MA doi 10 3386 w1218 Eraldo Banovac Monitoringgrundlagen der kroatischen Regulierungsbehorde fur Energie EW das Magazin fur 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 Ronnmar and Jenny Julen Votinius eds Festskrift till Ann Numhauser Henning Lund Juristforlaget i Lund 2017 pp 357 383 Global Indicators of Regulatory Governance World Bank Group Introductory Handbook for Undertaking Regulatory Impact Analysis RIA PDF Organisation for Economic Co operation and Development October 2008 Archived from the original PDF on Aug 4 2023 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 Retrieved June 4 2023 Code of Federal Regulations Total Pages 1938 1949 and total volumes and pages 1950 2021 Federal Register PDF John Braithwaite Peter Drahos 2000 Global Business Regulation Cambridge University Press Levi Faur David The Odyssey of the Regulatory State Episode One The Rescue of the Welfare State Jerusalem Papers in Regulation amp Governance Paper No 39 November 2011 Giandomenico Majone 1997 From the Positive to the Regulatory State Causes and Consequences of Changes in the Mode of Governance Journal of Public Policy 17 pp 139 167 doi 10 1017 S0143814X00003524 Dal Bo Ernesto 2006 Regulatory capture A review Oxford Review of Economic Policy 22 2 203 225 doi 10 1093 oxrep grj013 JSTOR 23606888 Regulatory Capture Definition Investopedia Archived from the original on October 3 2015 Retrieved October 2 2015 External linksWikiquote has quotations related to Regulation Look up regulation in Wiktionary the free dictionary Centre on Regulation in Europe CERRE New Perspectives on Regulation 2009 and Government and Markets Toward a New Theory of Regulation 2009 US Canadian Regulatory Cooperation Archived 2011 04 30 at the Wayback Machine Schmitz on Lessons from the European Union Canadian Privy Council Office Commissioned Study A Comparative Bibliography Regulatory Competition on Corporate LawWikibooks 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
