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Paper Abstracts

Panel 1A Global Financial Regulation

1 The Emerging Dynamics of Global Financial Regulation Jonathon Koppell Yale School of Management

ABSTRACT Agreement among G20 leaders that a new era of coordinated financial regulation was necessitated by the global financial crisis came fairly easily at a London meeting in April 2009. Given the urgency of the moment and the vagueness of the promises, this may not be surprising. The consensus emerging from the Pittsburgh sessions some six months later, however, was more specific. It suggests a general acceptance of existing patterns in global governance which are characterized by 1) balancing of normative and interest-based considerations, 2) integrated state-based and nongovernmental rulemaking, and 3) global coordination but weak enforcement mechanisms thus maintaining spheres of regional and national authority. These patterns were revealed in an empirical study of transnational rulemaking bodies working in the financial realm and other policy spheres. In this paper, the focus is squarely upon the manifestations of these patterns amongst the independent rulemaking bodies that together constitute the global financial regulatory infrastructure. The model of global financial governance described in G20 documents (e.g., peer review, coordination) reflects the approach taken by many of the international organizations* producing standards already references by the Financial Stability Board, an entity linked with the G20 that is likely to emerge as a council overseeing the whole “system.” It is argued that many of the compromises embedded in the existing global rulemaking organizations – including inequity in power, lack of transparency, modest enforcement mechanisms, and abundance of tools to stall rulemaking – will persist in future designs for such features are not “mistakes” but crucial design elements necessary to build and maintain robust global regulatory institutions.

*This includes the IMF (International Monetary Fund); OECD (Organization for Economic Cooperation and Development; IASB (International Accounting Standards Board); IFAC (International Federation of Accountants); CPSS (Committee on Payment and Settlement Systems); IOSCO (International Organization of Securities Commissions ); FATF (Financial Action Task Force on Money- Laundering); BCBS (Basel Committee on Banking Supervision); IAIS (International Association of Insurance Supervisors).

2 Systemic Risk and Global Financial Regulation after the Crisis Mary Condon Osgoode Hall Law School

ABSTRACT The concept of systemic risk has emerged out of the global financial crisis as a new discourse of regulation. This paper seeks to explore the possible meanings that could and are being ascribed to

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this term, in the variety of financial regulatory reform debates occurring in various jurisdictions and internationally. Particular attention will be paid to the way in which the notion of systemic risk is being used both to re-calibrate responsibility for financial regulation among a number of competing regulators both domestically and internationally, such as banking and securities regulators, as well as to energize newer players on the financial regulatory scene, such as central banks. A focus of the paper will be on the role of the International Organization of Securities Commissions (IOSCO) in orchestrating consensus as to the scope of the concept and to legitimate the role of securities regulators as responsible for systemic risk regulation in the wake of the GFC.

A further dimension of the paper will be to explore the implications of the discovery of systemic risk for the emerging new governance project in the field of financial regulation. The argument here will be that the platform of systemic risk may nurture and sustain a renewed paternalism within financial regulation, in contrast to a new governance approach that would foster flexibility and innovation within individual financial actors and institutions. Specifically, the rise of systemic risk may shift attention away from the governance of individual financial institutions and towards regulating relations among institutions, markets and governments.

The paper will be pursued in the following 5 sections Part 1: theoretical framework; connections and tensions between risk regulation and new governance Part 2: origins of the discourse of systemic risk in the context of the GFC Part 3: range of meanings of systemic risk post-GFC in jurisdictions such as the U.S/Canada, EU (does it reside in financial products, financial institutions, market infrastructure?) Part 4: IOSCO emerging deliberations on systemic risk in a transnational context Part 5: the future of systemic risk?

3 Regulation of Financial Derivatives and its Efficacy in Global Perspective Roman Goldbach University of Gottingen

ABSTRACT Financial derivatives are a predominant force of financial innovation and play a pivotal role within Financial Globalisation and Financialisation. These instruments have not only been one of the key determinants causing the recent financial crisis. Moreover, they altered the very structure and risk environment of financial intermediation, severely complicating the regulatory environment in prudential as well as in systemic regard. Derivatives in their various forms depict a systemic global challenge in that they change the structure of financial intermediation at its core – whilst national and in particular inter-/transnational political responses mainly remain within their historically grown sector-separated structures where Banks, Securities Dealers, and Insurers are regulated by different rules. Political answers to the threats of these structural fissures are decisive, but to date political authorities have not identified sound solutions to deal with, i.e. regulate, these shifted realities. Although co-operative transnational codification and standardisation within the Basel Committee, IOSCO, and other frameworks have been adapted since the Market Risk Amendment in 1996 to accommodate the newly arising risks from the widespread derivatives application, these were by far not capable of addressing the new prudential and systemic perils. While the recent financial crisis demonstrated the systemic instability that (global) imbalances in the financial derivatives trading cause, it remains unclear what kind of political failure underlies these developments. From a political economy viewpoint many of the current discussions and recommendations regarding the governance of financial derivatives seem to lack a clear empirical basis, as detailed studies on the national and international elements of their regulation are missing. This paper’s empirical investigation of the governance of financial OTC derivatives is conducted along two vantage points, namely the comparatistic national, and the international co-operative:

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Concerning the global perspective, it is analysed, if and how international regulatory standards accommodated and actually restricted the widespread use of derivatives. With regard to the comparative view, the evaluation focuses on how these transnational standards have been implemented and adapted. The analysis offers insights into the factual regulatory constellation from the derivatives perspective, and scrutinises the regulatory framework in light of the structural innovations within the financial system stemming from derivatives.

4 Claiming Legitimacy in Transnational Governance: The Case of International Standard- Setting for Corporate Reporting Burkard Eberlein York University

ABSTRACT

Abstract unavailable currently Panel 1B Risk, Regulation & Governance: Exploring Emerging Regulatory Trends in the oversight of New Technologies I

1 Regulating New Technologies: Lessons from Canadian Biotechnology Policy Development 1980-2010 Michael Howlett National University of Singapore, Simon Fraser University

ABSTRACT This working paper will analyze the general structure and the roles of actors in the Canadian regulatory process as it relates to ‘Omics technologies. Closely connected to the development of a biotechnology policy regime in past quarter century, the regulatory path followed by Canadian authorities, chiefly the Canadian federal government, in this field has been crafted to foster and support the quasi-promotional policy regime it developed for scientific innovation policy. These dynamic regimes are constructed around a multi-variable analysis of the situation, which encompasses not only considerations about science and technology goals, but also considerations of economic viability, public opinion and consumer responses to new technologies and processes, and the existing domestic and international policy fields (Howlett and Migone 2009). The content of these policy regimes underwent an important change around the early 1900s so that we can identify a Phase I and a Phase II parts according to the evolution of policy approach, the former phase consisted mainly of rule development and the latter of rule implementation. In Phase II regulation shifted from Genetically Modified Organisms (GMOs) to genomics, which does not deal with genetic modification but aims at fully mapping the genome of living organisms and at studying interactions among genes, which was much less controversial (Moore 2007). Along with the shift in focus from one area of biotechnology research to the other, came a small revolution in the field as, for example, what had been a main focus on agricultural applications for GMOs to a broader focus that included, beside agriculture, fisheries, environmental remediation, pharmaceuticals and so forth.

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2 Risk, Regulation and Governance: The Emerging Regulatory Regime for Nanotechnology in China – Likely Trajectories and Implications for Effective Risk Management Darryl S.L. Jarvis National University of Singapore

ABSTRACT Nanotechnology is widely regarded as an emergent technology that will transform industrial society. It allows for the manipulation of matter and its recombination at the molecular level, opening up enormous potential for its application in consumer products as well as industrial processes. Nanotechnology is already in the market place and used extensively in the manufacture of over 500 hundred consumer products ranging from cosmetics, food items, sports clothing, cooking oil, kitchenware, paints and wall coatings to environmental remediation, water treatment and energy related products.

While the use of nanotechnologies and materials has migrated between products and industries, more recently it has also migrated across borders. China, for example, now represents one of the largest users and innovators of nanotechnology in the world. At the same time, this has occurred amid a still evolving regulatory regime.

This paper explores the emergent regulatory regime for nanotechnology oversight in China. Regulatory oversight of nano-materials and the possible health risks associated with their application makes effective regulatory management highly desirable – if not essential. But how effective is China’s regulatory regime? What institutional practices, obstacles or resource constraints hinder the emergence of a formal regime for nanotechnology? By analyzing the institutional and administrative practices of several key agencies for nanotechnology oversight, the paper argues that porous mechanisms of accountability, compliance and enforcement, endemic coordination asymmetries, regulatory competition between multiple institutional stakeholders and impaired transparency norms and standards, make problematic the prospects for a formal regime or the emergence of a national coordinating body.

3 Managing Nanotechnology Risks from an Asian Perspective: The Case of Taiwan Mika Purra National University of Singapore

ABSTRACT To what degree can we say that nanotechnology related risks are warranted? If they are, how are governments approaching nanotechnology related risks? Do government policy measures to nanotechnology constitute another set of risks in form of cumbersome regulations? The balance between over- and under-regulation in both national and cross-border context is crucial for the global espousal of nanotechnologies.

In this paper, we address these questions by examining the emerging nanotechnology policies AND governance structures in Taiwan. As the flow of research and development funds keep expanding across Asia, nanotechnology is bound to emerge as a divisive field that calls for government action. Taiwan is a case in point of an emerging Asian nanotechnology market that wields significant influence across the region. As growing market power equals an increasing level of responsibility, what can we thus say about the government’s approach to defusing and managing potential risks arising from new nanotechnologies?

4 A New Regualatory Strategy to deal with the Medical Isotopes Crisis Marie Mavoie York University

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ABSTRACT The complexity of emerging issues in science, technology and medicine calls for a new regulatory strategy to deal with risk and uncertainty. This paper explores the production of medical isotopes in Canada as an illustration of complex issues requiring a strategy support system. Tightly but inversely connected, risks generated by either the production or non-production of medical isotopes are located on both the demand (healthy citizens and their well-being) and supply (safety of production) sides. Production goes beyond domestic needs as global society depends upon medical isotopes and relies on very few producers. The challenge for the policy-maker is therefore to reduce the trade-off between the risks of producing versus not producing medical isotopes. With the supply of isotopes, there is a potential risk of contaminating the atmosphere and groundwater as well as valid security concerns. On the demand side, the non-production of isotopes could affect patient care—both in Canada and worldwide—and the medical community. While there are risks for safety and overrun costs related to the production of isotopes, there are also risks for patients who may face more invasive technologies or delays in diagnosis and treatment. This raises the question about the prevalence of the precautionary principle, which could decrease the level of risk on the supply side but leave the demand side with a higher level of uncertainty. The question raised here is about a fair appreciation of risk – at the national and international level – that is, the objectivity of scientists and the realism and flexibility of the regulator considering the level of risk. On the other hand, it is worth wondering if there is a social amplification of risk encouraged by media or the population’s generalized “risk-phobia.” There is no easy way out of the current crisis.

Panel 1C Regulating for Sustainability at International Level

1 Making Regulation Stick -- Governmental Self-Regulation as a New Approach to International Environmental Compliance Patrick Bayer University of Mannheim

ABSTRACT In recent years the concept of self-regulation has gained growing importance in the environmental regulation literature. It is theorised that profit-maximising firms may comply with costly environmental regulation voluntarily if they otherwise expect to suffer from judicial penalties or non-market threats such as reputation loss. While all these models limit themselves to contexts in which governments regulate domestic industries, I transfer this self-regulatory rationale to governmental compliance with unenforceable supranational regulation. International environmental agreements, such as the Kyoto Protocol or the recently negotiated Copenhagen Accord impose (or may impose some time in the future) regulatory burdens on sovereign states. Despite these additional costs some states comply and thereby self- regulate, whereas others do not. To disentangle the conditions under which self-regulation occurs in such supranational regulatory regimes, I devise a game-theoretic model of political self-regulation.

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This model shows that domestic voter preferences for the environment and the level of information are key in explaining differences in governmental compliance behaviour. Empirically, this finding is corroborated with data from the European Emissions Trading Scheme.

2 Energy Use Scenarios as Self-Fulfilling Prophecies: The International Energy Agency and Regulatory Responses to the Climate Crisis. Petrina Schiavi Australian National University

ABSTRACT Addressing the climate crisis will necessitate a radical transformation of the world’s energy systems to reduce dependence on fossil fuels. Coal is an especially conspicuous target, as it emits the highest levels of carbon-dioxide of all fossil fuels. However, regulatory responses that have emerged in response to the climate crisis appear to pose little threat to the dominant role of coal in the world’s energy mix. This paper focuses on scenarios in environmental politics as but one of the socio- political forces that have contributed to such a result. With a focus on the coal-rich countries of Australia and the USA, this paper explores the influence of the energy-use projections published by the International Energy Agency (IEA) in shaping government policy and regulatory responses to the climate crisis.

The IEA describes itself as an autonomous agency linked with the OECD that acts as energy policy advisor to its 28 oil-producing member countries. Each year, the IEA publishes its “World Energy Outlook” report that contains energy-use data, analysis and future projections for the world, major countries and regions. This paper presents the results of a discourse analysis of public statements of government and industry in Australia and the USA during 2009 in which reference was made to the IEA projections on coal-fired energy in policy-relevant contexts. Although the IEA states that their projections are modeled on current policies of its member countries, the analysis found that the IEA projections were often referred to by government and industry as evidence of the inevitability of the increased use of coal in the world’s energy mix. Accordingly, the IEA projections helped to justify the development of policies and regulation that allowed for ‘business as usual’ within the coal industry, and, as such, were well on their way to becoming self-fulfilling prophecies.

3 Nuclear Power Regulation in Russia and France: Innovation and Public Interest as Determinants of Sustainable Development Theocharis N. Grigoriadis University of California at Berkeley

ABSTRACT This paper analyzes the political economy of nuclear power regulation in Russia and France from the perspectives of innovation and public interest. Complementarities between the civil and military uses of nuclear power may explain its extensive adoption by states associated with high electricity demand, economic interventionism, and great power status. While innovation is critical for nuclear production efficiency, systemic differences between regulatory institutions in Russia and France lead to alternative definitions of sustainable development and thus social welfare. Given that Russia is a hierarchical and France a multilevel regulatory system, sustainable development has higher sunk costs in societies with a plurality of nuclear stakeholders. Nevertheless, a limited number of regulatory actors facilitate centralization at the expense of innovation in the nuclear sector. In nondemocratic political systems, sustainable development is more likely with distributive nuclear agencies and interstate innovation transfers. I model French-Russian nuclear cooperation as a reputation game, where France is the sender and Russia is the recipient of innovation strategies. What I propose is that sustainable development is feasible at a global level only when both governments credibly commit to the promotion of public interest by treating environmental externalities and social unrest as the imminent costs of non-compliance.

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Panel 1D Independent Regulatory Bodies

1 Political saliency and bureaucratic autonomy Kutsal Yesilkagit Ultrecht University

ABSTRACT Students of political control have repeatedly underscored the dynamic nature of bureaucratic autonomy. The level of bureaucratic autonomy of agencies is said to systematically vary with the advent of a new political coalition, (threat of) budget changes, and the (political) appointment of new agency heads. This paper tests the effects of changes in the political saliency of policy issues as an alternative to these explanations. The judgments related to complaints on race and religion issued by the Dutch Equality Body between 1994 and 2008 form the empirical basis of this study. This paper will examine the extent to which the judgments of the Dutch EB were affected by the rising saliency of issues related to (Muslim) immigrants and Islamic fundamentalist terrorism after 9/11.

2 Political governance and NPM principles in the making: Institutional dynamics of Hungarian central government administration 2002-2008 Gyorgy Hajnal Institute for Strategic Research on Economy and Society

ABSTRACT The 2006 parliamentary elections signified an important shift in the guiding principles and organizational practice underlying Hungarian central governmental structures. The sweeping changes instituted by the incoming government centred around an open acknowledgment of the need for strengthening the direct political control over central governmental apparatuses, including ministries and central agencies supervised by ministries, and a parallel quest for containing the uncontrolled and opaque mushrooming of central government agencies. This approach was, at least on the level of formal-legal institutions, in sharp contrast with the stated values and legal principles governing the preceding 16 years of post-transition Hungary characterized by an institutional entrenchment of the bureaucratic autonomy and civil service organizations from direct political influence. The paper examines the extent to, and the ways in which, these principles have been implemented on the ground by comparing the institutional dynamics of the pre- and post-2006 period. The empirical basis of the study is the organizational database of Hungarian central government organization utilized in some previous studies (e.g. Hajnal 2010), the temporal coverage of which is being extended to include - in addition to the 2002-2006 period - the years of 2008 and 2009.

3 New Directions in the Study of Regulatory Administration: regulatory networks and autonomy Jan Rommel Instituut voor de overheid

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ABSTRACT The politics of delegation to regulatory agencies and regulation after delegation are extensively studied topics within the field of regulation and regulatory administration. Past research has generated new insights in both the determinants of agency creation and the bureaucratic autonomy of regulatory authorities. The findings from these studies have given rise to a set of new further questions. One such insight is that studies of regulatory administration have shown that the exact relationships between formal and real autonomy or independence are far from straightforward. Another insight is that the regulatory authorities do not operate in a vacuum; by contrast they operate within supra- and transnational, national, regional and sectoral networks in which other regulators, regulatees, stakeholders, the larger public and the media also have stakes in the outcomes of regulatory policies. In other words, although the ‘relational’ nature of autonomy is acknowledged, agency studies focus mainly on autonomy of public sector organizations towards government and regulatees, neglecting the effect of other government regulators, parliament, interest groups, mass media, bodies on other governmental levels on their autonomy. Moreover, despite recent important developments it remains largely unclear how tasks, political salience, policy field and national politico-administrative culture and history affects the autonomy of regulatory bodies in different countries and sectors. In addition, the different ways in which regulatory bodies themselves can ‘forge’ more autonomy by developing strategies towards all these stakeholders need more systematic study. Finally, the dynamic nature of autonomy is not fully researched: autonomy of regulatory actors can change over time, dependent on certain factors (administrative, political, and societal factors). Longitudinal or retrospective studies are therefore needed.

Panel 1F Reorienting Food Governance: Response to Crises

1 New Faces of Crisis: A Need for Reorientation of the European Food Regulation in Face of New Challenges Karolina Zurek European University Institute

ABSTRACT Current regulatory structure in the field of food remains largely shaped by the post-BSE crisis thinking. Such crisis-oriented regulatory philosophy prioritizes an objective of precluding future outbreaks of uncontrolled diseases. It, thus, implies a strengthening of the scientific risk assessment part of the regulatory process, which allows it to gain a certain degree of domination over the management phase. Consequently, important non-scientific factors, such as socio-economic implications of decisions, redistributive concerns, as well as questions of quality, nutritional choice or sustainable development often are not sufficiently reflected in the regulatory outcome. Meanwhile, developments inside and outside of the European Union, especially the last two

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enlargements and globalization of trade, put new challenges in front of the system, and emphasize relevance of those non-scientific factors. Hence, this paper suggests that the need for reorientation of the regulatory development in the field of food arises and should be seriously considered. It is, here, argued that at the age of crisis, food policy should withdraw from its current crisis-orientation and focus more on the socio-economic implications of European food policy and everyday problems. Questions of food quality, sustainable development, and social and economic relevance of the Europeanized policy choices should receive appropriate consideration in the EU regulatory process. If European food regulation continues to overlook those types of concerns, it may produce significant and far-reaching side effects, such as loss of diversity (in both cultural and biological sense), regulatory depreciation of the value of food quality, as well as mismanagement of the problem of obesity. Consequently, the new faces of crisis may be much less spectacular, but much more polygonal.

2 Europeanization and Changing Meanings of Food Safety Katharina T. Paul Erasmus University Rotterdam

ABSTRACT Until the 1990s, European food safety policy was defined as (i) a matter of national regulation, (ii) reliant on technocratic scientific expertise, and (iii) as a means to secure the functioning of the internal market within the European Union (EU). Over the past decade, however, EU food safety policy has undergone a series of transformative moments. The nature and effects of these transformations form the object of analysis in this paper, in two ways: First, by way of exploring the effects of a series of food scares, such as the dioxin contamination case of 1999, and the discovery of Bovine Spongiform Encephalopathy (BSE) on the European continent in 2000/1, this paper exposes shifts in the policy-definition of food safety. The said crisis moments challenged the existing institutional approach at the time and provided an opening for alternative definitions of ‘food safety’: food safety came to be linked to animal welfare, environmental sustainability, consumer rights, and public health. These policy fields came to merge in heterogeneous ways across contexts and the meaning of ‘food safety’ and ‘food quality’ continues to differ across countries. In light of this divergence, the second aim of this paper is to account for the relatively swift Europeanization in this policy domain. By exploring the quality of EU food safety policy discourse, I conclude that the Europeanization of food safety relied on the mobilization of three ‘integrative notions’: the notions of being a stakeholder, an actor in the food chain, and a European consumer.

3 Buying Bio-Security – Compensation for Animal Diseases. Robert Lee Cardiff University

ABSTRACT Where there is a failure of the market to provide a public good, one might well anticipate State intervention. In relation to bio-security, it is not uncommon to find compensation provided by the state where diseased animals are slaughtered. Ordinarily one might expect that such losses attaching to production will be borne by the producer. The risk would generally be internalised, by insurance or through pricing mechanisms. In the case of animal diseases, however, this is not the case; surprisingly so, since the ready payment of compensation hardly provides the strongest incentive towards bio-security.

There would appear to be two possible reasons why the State would adopt this stance. The first is that a strong public interest in maintaining food production dictates that the losses should be compensated to promote uninterrupted supply of food and regenerate the site of production in a manner which market mechanisms could not accomplish. A second explanation is that the

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compensation buys intervention rights on the part of the State. Under this explanation in order to encourage producers to behave in certain ways, compensation acts as a mechanism to influence behaviour. Compensation incentivises producers to report disease and can be made dependent on the producer following mandated, desirable course of action.

Whilst it is commonly asserted within the agricultural industry that the role of compensation is to address failings in public policy, the paper suggests that historically and presently the true purpose of compensation is to buy intervention rights. More significantly, the rationale of compensation matters in shaping regulatory policy. If, as suggested, compensation provides a financial incentive to producers to present their animals for testing, it follows that compensation should be consistently applied to achieve this objective. Drawing on case law and reforms of animal health legislation, this paper will suggest that such consistency is not present largely because of the confusion of regulatory objectives.

4 Authority in governing global food Peter Oosterveer Wageningen University

ABSTRACT Food is increasingly traded internationally, transforming its global production and consumption and influencing most food-related practices. Conventional food regulation is based on sovereign nation- states making decisions to protect their population and the environment, but this model is increasingly under pressure. New challenges are emerging, including the rapid spread of food related risks (cf. avian flu, threats to biodiversity), the introduction of innovative technologies with unknown effects (cf. genetically modified food), and the absence of adequate governance arrangements to address global, or at least cross-border, impacts. Most governments can no longer effectively control international food trade because of its size and because production areas, structures of production and consumption constitute swiftly changing transnational networks. Moreover, it is increasingly hard to distinguish between issues that are national, international, or global. In reaction, innovative governance arrangements emerge through under the responsibility of private companies and non-governmental actors, for instance GLOBALGAP and MSC. However, the recent financial crisis generated a debate on whether private companies could be considered trustworthy partners in regulation and whether national governments should not reclaim the lost ground, including in the area of regulating food. However, it seems quite unlikely that the conventional nation-state based food governance arrangements can adequately regulate contemporary globalised food provision. On the other hand, attractive alternative models for governing food in the global era are lacking. This paper will therefore discuss two potentially interesting conceptual frameworks as suggested by Sassen and Rosenau. These theories were not specifically developed for food regulation, so this paper will start with a general presentation of their main elements and then proceed to discuss whether they can serve as a basis for global food governance.

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Panel 1G Reconceptualising Regulation and the Global South

1 A Regulatory State of the South? Navroz Dubash, Bronwen Morgan Centre for Policy Research, University of Bristol

ABSTRACT This paper will explore whether, and how, the rise of the regulatory state in the Global South, and its implications for processes of governance, are distinct from cases in the North. With the exception of a small but growing body of work on Latin America, most work on the regulatory state deals with the US or Europe, or takes a relatively undifferentiated ‘legal transplant’ approach to the developing world. Our focus will be on regulatory agencies as a particular expression of the regulatory state, though we acknowledge that the two are by no means synonymous. We will take seriously the historical legacy of the idea of a North/South divide while also integrating the considerable changes occurring topically in this purported divide (caused by increased economic integration between North and South and increased differentiation within the South).

Three entry points into exploring the distinctive nature of the regulatory state in the Global South will be discussed. First, is there a distinctive genesis of regulatory agencies in developing countries? Secondly, to what extent and how is the regulatory state of the South shaped by the interface between the domestic and the international? Thirdly, how does the practice of regulation and the political opportunities afforded by state-society interactions in regulatory agencies shape regulatory outcomes on the ground, particularly in relation to the much higher (in comparison to industrialised countries) levels of unserved citizens and informal service providers?

The paper will draw on a series of comparative case studies of infrastructure regulators (electricity, water, and telecoms) drawn from Africa, Asia and Latin America. The intent is to draw out common themes that characterize a “regulatory state of the South,” while remaining sensitive to the variations in level of economic development and political institutional contexts within ‘the South’.

2 Towards a Geography of Regulation: Bringing the ‘Global South’ into Regulatory Theory Michael Dowdle National University of Singapore

ABSTRACT Regulatory theory has greatly expanded our understanding of the complex system of social dynamics that affect regulation. But to-date, regulatory theory has focused overwhelmingly on the regulatory experiences of advanced industrialized countries. This paper / presentation will detail how regulatory theory can be used to draw insight into regulation as it operates in industrializing and non-industrialized societies—aka the ‘Global South’. Extrapolating from studies on economic and human geography, it will explore how the very distinctive economic and cultural conditions these geographies tend to generate in industrializing and developing countries can impart unique kinds of regulatory concerns and incapacities—concerns and incapacities that are both distinctive to the Global South and exist outside of the reach of the domestic (and often even the transnational)

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political environment. Case studies looking at competition regulation, labor regulation and constitutionalism will be used to illustrate these linkages. It will also explore how all this may require us to fundamentally reorient how we think about and approach issues of “law and development”.

3 Steering the Regulatory State: The Rationale behind the Creation of Independent Regulatory Agencies in Liberalized Utility Sectors in the Developing Countries Ahmed Badran University of Exeter

ABSTRACT This paper looks at Independent Regulatory Agencies (IRAs) as steering mechanisms for the regulatory state. It attempts to answer a straightforward question regarding why governments in the developing countries delegate their authorities to the IRAs. This topic has been pretty much investigated in the context of the developed countries particularly in Europe where scholars have come up with different theories that explain the rational behind the creation of such agencies. These theories are important to understand why governments in these countries adopt IRAs as steering mechanisms for liberalised utility sectors; however, they are not sufficient to explain the same phenomenon in the context of the developing countries where socio-economic and political environments are different.

Adopting a policy transfer framework of analysis, and based on the analysis of governmental documents and interviews with decisions-makers and senior regulatory member staff, the paper investigates the creation of the IRA in the telecommunications sector in Egypt as a starting point for more comparative studies to follow. The underlying assumption is that the differences at the contextual level between Egypt and the Western European countries wherein the IRA model has been originated may lead to different explanations for the creation and development of such a model. The initial findings of the paper show that the creation of the IRA in the telecommunications sector in Egypt was very much instrumental. In other words, it can be explained on functional and practical grounds rather than any other factors of democratic governance or political uncertainties

4 Resistance and Regulation Nai Rui Chng European University Institute

ABSTRACT The inability or unwillingness of privatized water utilities to provide service delivery to the urban poor has reaffirmed the importance of the informal sector. Informal private water vendors (or ‘small-scale water providers’ in the emerging official parlance) provide a crucial service, but operate outside the formal regulatory framework. They exist within an alternative regulatory system (as in the case of mafia-style organizations) that is informally regulated, and within the boundaries of legality. However, they have to contend with not only economic elites privileged by formal regulatory structures, but also local political elites who impose their own regulatory control in the form of endemic patron-clientalism. How can regulatory politics be understood in this context? Based on fieldwork carried out in the Philippines following the privatization of the Metropolitan Water Works and Sewerage System in Metro Manila in 1997, this paper considers the empirical realities and difficulties of research on regulatory politics in the developing world.

I suggest that an engagement with the broader literature on contentious politics and the informal economy is needed to critically appraise the rise of regulatory governance in the global south.

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Panel 1H Reconceptualising Regulatory Capacity

1 Two Visions of Regulation Tony Prosser University of Bristol

ABSTRACT The first is that of regulation as an infringement on private autonomy. Key characteristics are that regulation is primarily a means of efficiency maximisation; that independence is the key principle in designing regulatory agencies; that stability can be assured through calculable rules; that private contracting may be an alternative source in creating appropriate incentives; that relations between regulator and regulated enterprises can be seen as analogous to a contract; that deliberation should take the form of assessing evidence from outside the regulator rather than participation of interests within it; and that private law mechanisms form an appropriate means of ensuring regulatory accountability. This vision thus emphasises the values of private autonomy, the role of self- correcting markets, and the facilitation of contractual stability.

The second vision is of regulation as a collaborative enterprise. Regulators have responsibility for both economic and social or distributive goals, which are inseparable. Rather than emphasising independence, institutional design is a matter of ensuring effective collaboration between different levels of government. Legitimacy is the result of government delegation of discretionary powers rather than calculable rules. Self-regulation is merely a further delegation to enable regulatory tasks to be carried out more effectively. Rather than relations between regulatory and regulated taking the form of a contract, they are part of a complex network involving different stakeholders. Deliberation can be achieved by direct representation of interests within the regulator itself; fear of capture is less importance than the achievement of regulatory responsiveness. Accountability should be secured through public law mechanisms of proceduralisation.

These visions will be assessed in relation to the work of a number of different regulatory bodies.

2 Varieties and Vicissitudes of Private Market Regulation in the 19th and 20th century Netherland Frans van Waarden Ultrecht University

ABSTRACT Dutch markets have in the 19th and 20the century been regulated by rules coming from quite a variety of private sources: cartels, trade associations, rating agencies, commercial information providers, supply chain contracts, conditions imposed by insurance companies, informal rules and understandings of ethnic or religious communities, etc. As these sooner or later experienced problems, such as with free riders, their credibility, reputation, or their sanctioning capacity, they either disappeared or managed to acquire outside support. That came from other powers or authorities, varying from dominant firms in the market to religious authorities and often: state-like actors. An example is how private collective labor contracts got extended, i.e. imposed by public authorities onto a whole economic sector between the 1930s and 1970s, thus transforming a private contract into public law. Another one is how quality ratings from private organizations got public accreditation or other forms of endorsement. More in general there

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seems to have been a gradual movement from private to public regulation over time. These historical experiences with private regulation can be useful at a time when we are witnessing an opposite tendency: again back from public to private regulation. Various factors necessitate or facilitate this trend: the internationalization of markets where national state authorities do not have sufficient jurisdiction to impose regulations; the increased realization of the limits of public regulatory watchdogs created in the wake of neoliberalism; the increased importance on markets of large multinational corporations; and the activities of various international environmental or consumer NGOs.

3 The many meanings of standards. The politics of the international standard of food risk analysis David Demortain London School of Economics

ABSTRACT This paper deals with the creation of international procedural standards. It studies the case of the international standard for risk analysis in food safety. The main argument of the paper is that the creation of one standard in one particular arena can reflect a diversity of relations to centrally- composed rules and projects of harmonisation, or regulatory languages. It is not sufficient to have a pre-established model of risk analysis, and transnational experts diffusing it, for a standard to be set. Creating a standard requires to bridge the different regulatory languages that are expressed through the model. The use of “principles” or generic provisions as an instrument to set standards - that is representative of the contemporary expansion of standards (Brunsson and Jacobsson 2000) - can be explained as such a strategy of reconciliation. The paper studies jointly the origin of the risk analysis model, the two distinct relations of transnational experts and of governments (that of Tunisia in particular) to the model and the production of a standard in the Codex Alimentarius (with particular attention to the positions of the Tunisian delegate), to highlight this presence of politics in international standard-setting.

4 Self-Regulation in the global value chain- A trade barrier or an opportunity for public- private co-operation? Kaisa Sorsa National Institute of Legal Policy, Helsinki

ABSTRACT The aim of this paper is to address and analyze the use of different self-regulation systems in the global value chains by asking why companies voluntarily co-operate by self-regulating, even though they compete, also with each other, in the market. Secondly, it is argued that the lawmaker should take self-regulation more seriously as a regulatory strategy because of its benefits and feasibility in the dynamic, global business environment. First, the use of self- regulation in value chain is analysed based on empirical evidence as presented in international and Finnish research papers. Secondly, the results are reflected on with more theoretical

arguments.

Panel 1I Reconceptualising Regulatory Capacity

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1 Re-Stocking The Regulatory Toolkit Arie Freiburg Monash University

ABSTRACT There have been many developments in regulatory technology since Christopher Hood’s seminal 1983 work on The Tools of Government. New instruments have been developed, many have been refined and the relationships between them have become better understood. Regulatory design has become more complex, but possibly smarter. Australian legislators and regulators are slowly taking up the challenge of providing a coherent framework for regulation and for guiding the choice of instruments. This paper takes a broad view of regulation and examines the range of tools available to Australian regulators. It groups them into six broad, non-exclusive categories: economic, transactional, authorizational, structural, informational and legal regulation. It explores the relationship between state and non-state forms of regulation and suggests a distinction between ‘passive’ versus ‘active’ regulation (ie ‘webs of influence’ vs enforcement) in preference to those currently employed (‘hard vs soft’, ‘heavy’ vs ‘light’, ‘traditional’ vs ‘alternative’). It argues that the challenge for good regulatory design is not to determine whether regulation is hard or soft, but whether it is effective, efficient and just and whether the transaction costs involved are reasonable and proportionate.

2 Regulatory Capacity and Networked Governance Colin Scott University College Dublin

ABSTRACT This paper reports on research on regulatory regimes in Ireland which has a particular focus on regulatory capacity. Investigation of regulatory capacity is significant because the growth in numbers of regulatory agencies in the industrialised countries has led to heightened expectations about what governments generally, and regulatory agencies in particular, are capable of achieving. A popular narrative on the global financial crisis suggests that there was regulatory failure – regulators failed to achieve what they should and could have achieved. An alternative approach seeks to understand the factors which shape and limit regulatory capacity of governmental actors, whilst recognising the diffusion of regulatory capacity beyond government to non-state actors such as businesses and non- governmental organisations. The paper draws on Christopher Hood’s tools of government approach to conceptualise regulatory capacity as comprising a combination of authority, financial and organisational resources, and positioning within networks. Whereas Hood presented government as being at the centre of networks relevant to its governing capacity, I suggest that networks within regulatory regimes are often likely to be more diffuse, such that non-governmental actors may have central positions whilst government agencies are peripheral. A further aspect of the issue is the extent to which legitimacy affects the capacity to act, and how the legitimacy of regulatory actions may be shared between governmental and non-governmental actors. The paper will evaluate effects on regulatory capacity (for both state and non-state actors) of moves towards making greater use of networks as instruments of control and learning within regulatory regimes affecting Ireland both at national and supranational levels.

3 Collaborative Regulation Julia Black, Robert Baldwin London School of Economics

ABSTRACT Prevailing theories of regulation and governance emphasise the decentred and networked character

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of many regulatory regimes. However, it has paid less attention to the difficulties of identifying and managing the tensions and/or harmonies that are encountered when numbers of regulatory systems are applied concurrently to an issue, risk or sector. This papere aims to address that deficiency by offering a ‘collaborative’ approach to the design and evaluation of decentred or networked schemes of regulation. In doing so it focusses on the constellation of regulatory actors that impacts on an issue rather than on an isolated agency or statute. It puts forward a framework for identifying areas of potential tension or harmony and for producing regulatory networks that are collaborative rather than disjointed. That framework is established elementally: by identifying those characteristics of regulatory regimes that are likely to give rise to the most severe co-ordination challenges and by adverting to the elemental tasks of regulation so as to examine how co-ordination issues may vary across the different activities that are carried out by regulators. We highlight five regulatory regime characteristics that, when varying across a network, present central co-ordination challenges. Section 1 describes those five elemental variations and the nature of the divergencies in these that may be encountered within a regulatory network. It also outlines the potential difficulties that can flow from such variations. Section 2 makes the case for considering the specific challenges of network co-ordination that arise across the elemental tasks of regulation. Section 3 then draws on the public administration and associated literatures to consider the potential of different co- ordination strategies as these might be applied in regulation. Section 4 looks at issues of legitimacy, accountability, transparency and fairness in the co-ordination of networks and Section 5 draws conclusions on the value of the collaborative approach.

4 Regulatory Mechanisms for Forcing Change Past Power Christie Ford University of British Columbia

ABSTRACT New governance mechanisms based on decentralized decision-making, outcome-oriented or management-based regulation, destabilization, and information-forcing may offer a promising avenue for regulating complex and fast-moving environments, such as financial markets. Yet recent experience in financial regulation, in areas as diverse as securities law enforcement and international banking standards, illustrate how these mechanisms can be prone to “facial compliance,” and ineffective implementation. Specifically where the goal of the regulatory intervention is to effect meaningful change to the status quo, the difficulty often seems to be that in practice if not in theory, entrenched interests are able to use the flexibility inherent in these mechanisms to undermine their reformative potential. In response to this problem, this paper identifies the strategies – internal/cultural, external, environmental/structural, information-based, and participation/diversity- based – that have been described by new governance scholars in various contexts. Each strategy has its strengths and weaknesses, and there are no perfect solutions. The paper considers the necessary preconditions, feasibility, and potential of these strategies in an attempt to identify lessons about their usefulness as real-life regulatory tools.

Panel 1J Revisiting Theories of Regulation

1 Public interest regulation reconsidered: From capture to credible commitment

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Jorgen Gronnegaard Christensen Aarhus University

ABSTRACT Two questions remain central in the study of regulation. First, what is the role of affected interests in regulatory policy and administration? Second, to what extent does regulatory administration balance the public interest against the regulated interests within the private sector? The paper here compares three different theories and the research based on them. These theories are classical public interest theory, capture theory, and the modern theory of credible commitment. Their underlying logic and assumptions are identified and the empirical scope of each of the theories is set out. Finally, it is discussed, on the basis of existing research whether there is supporting evidence for them. The conclusion is that they all cope with highly relevant issues but also points to the persistence of a highly politicized environment. The interesting observation is that this politicization has not excluded change and reform but the pattern of change has not followed the patterns proposed by capture and credible commitment theory. To the contrary the paper contributes to the rehabilitation of classical public interest theory, although in a modest and refined form. Rather than upholding the less realistic idea of an administration that pursues a clearly defined public interest, focus is changed to procedures ensuring the wide inclusion of both regulated and third party interests as well as open information on case procedures, invoked information and final decisions together with options for challenging these decisions in other administrative authorities and eventually the courts.

2 Back to the Future: Will the U.S. Return to the Social Model of Regulation? Sidney Shapiro Wake Forest University

ABSTRACT The economic market failure paradigm has dominated policy discussions in the United States because of conservative political dominance. In this paradigm, the market is treated as prior to government, and government intervention is only justified if there is a market flaw that can be remedied to produce more economic efficiency. The competing normative conception of regulation in the United States is associated with the social regulation of the 1960s, but it dates back to the Progressive Era. In this conception, citizens use democratic processes to determine the type of society in which they wish to live. Market failures justify intervention, but so do equity, fairness, and environmental concerns. These norms have equal rank with economic efficiency, and the political process is used, not only to choose among competing norms, but also to attempt to optimize non- market as well as market values. The social conception of regulation reflects American pragmatism, particularly the work of John Dewey. Dewey thought of democracy as an on-going discussion of American values and the public programs that promoted them.

3 A crisis of neoliberal government or a crisis of governmentality studies? Mitchell Dean Macquarie University

ABSTRACT “Governmentality studies”, after Foucault, have emerged as an influential, cross-national paradigm within the broader social science concern with regulation and governance. Foucault’s definition of government as the “conduct of conduct” indicates a research path akin to those who approach regulation as the steering of behaviour and processes. Yet this work remains distinctive in that it attempts to offer an “analytics of government” which is critical without being normative and thus appears to reject the distinction between explanatory and normative theory. This paper asks whether that is possible and, if so, how? It asks whether these studies can distinguish between good and bad regulation and contribute to the project of better, fairer, more efficient and participatory

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forms of regulation and governance. Further, given the post-statist focus of governmentality studies on regulation through the governmentally constructed agencies and spheres of markets and civil society characteristic of “neoliberalism”, can they be of use in the apparent return of sovereign state interventions after the “global financial crisis”? Does the crisis of neoliberal government also mean a crisis of governmentality studies?

4 Theories of Regulation after the Great Financial Crisis David Levi- Faur The Hebrew University

ABSTRACT The emergence of the US regulatory state since the end of the 19th century is associated with the emergence and consolidation of public interest theories of regulation. The so-called 'deregulation' period since the late 1970s is mainly associated with the hegemonic position of the economic theories of regulation. Which theory of regulatory governance will dominate the post-crisis period and guide us in shaping our governance structures for the years to come? We discuss this question using three dominant narratives of the GFC: the denial narrative; the recanting neoliberalism narrative, and the regulatory capitalism narrative. Among these three, we assert, it is only regulatory capitalism, which brings in the systemic characteristics of regulatory governance. Indeed, it is the narrative that may guide us best in our effort to understand the current regulatory crisis and the dynamics of the current regulatory regime.

Panel 2A Implementation of Neoliberal Policies

1 Dangerous Life and Biopolitical Regulation; The Stakes of Neoliberal Financial Crises Nicholas J. Kiersey Ohio University

ABSTRACT Drawing on the recently published lectures of Michel Foucault on the anthropological imagination of neoliberal political economy, this paper examines the response of the international community to financial crises. Starting with the precedent of the Asian financial crisis of 1997 and then looking at the more recent crisis in Ireland, the research attempts to tie in two central themes or forks" of Foucault's theory of biopolitical regulation. Namely, the "permanent economic tribunal" against which all governmental activity is judged and, perhaps more importantly, the “consciousness of crisis” that grounds the project of contemporary neoliberalism. Addressing the regulative context of “crisis neoliberalism” then, and focusing specifically on both cases of risk assessment in the appraisal of public services and quotidian forms of subjectification, to what extent can we see regional or global redundancies in the policy frameworks that are being developed to ward off excessive financial risk? Guided to some extent by more transnationally-oriented neo-Gramscian literatures (Cox, Rupert), as well as combined and uneven development literatures (Shilliam), to what extent can distinctive national articulations be identified in this development? To what extent may these policies be said to mark ‘new’ departures for neoliberalism? Focusing in particular on the

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contested responses to these crises, the paper investigate how neoliberalism understands the tension between the risks that inhere, on the one hand, in the demand that it makes of its subjects to “live dangerously” and, on the other, in its strategies of intervention to secure freedom from the “costs” of their possible excesses.

2 The Domestic Origins of Fiscal Crisis Niamh Hardiman, Sebastien Dellepiane University College Dublin

ABSTRACT By the late 1990s, all European countries – even those that did not join the Euro – succeeded in reducing their fiscal deficits to low levels. Membership of the Euro was intended to create ongoing fiscal discipline over domestic decision-making. However, the financial crisis of the late 2000s produced much deeper fiscal crisis in some countries than in others. This paper analyses patterns of fiscal policy across European countries between 1999 and 2008, and identifies clusters of problem- cases: Ireland, Britain, Spain and Greece were among those with the biggest deficit problems. But the policy decisions underpinning these outcomes are different. Outcomes can be explained in terms of both the domestic coalitions that prevailed in each case, and the policy-making institutions that facilitated the influence of some interests over others. Our analytical framework is used to explain both commonality and variation in the experiences of the selected case studies.

3 Rethinking neoliberalism and regulation before and after the financial crisis Damien Cahill University of Sydney

ABSTRACT This paper uses debates about the significance of the financial crisis for the future of neoliberalism as a launch pad for an examination of the nature of neoliberalism. Many commentators have interpreted state responses to the global financial crisis as a return to regulation that heralds the death of neoliberalism. Such interpretations are generally based upon an understanding of neoliberalism as a retreat of the state from regulation of the economy. This paper interrogates such understandings and critically evaluates alternative conceptualizations of neoliberalism including the ‘regulatory capitalism’ approach and the ‘actually existing neoliberalism’ approach. A key focus of the paper is on the relationship between neoliberal theory and the regulation of economic processes.

4 Together ‘We Can’: How Canada Solved the ABCP Crisis Ian Roberge Université York

ABSTRACT The global financial and credit crisis 2007-2009 has brought about another opportunity to study the relationship between states and markets. How have states responded to the crisis? Canada is an interesting case study to explore hailed by many as a global example. Governments worldwide had to bail out financial services sector firms; the Canadian federal government did not have to follow suit. Canadian financial markets emerged largely unscathed from the worldwide crisis. How did Canada succeed in minimizing the threat and the impact to its financial system? In this paper, we argue that Canada relied on market solutions to market problems, with the government playing a supporting role when the need arose. Canada’s ABCP crisis is used as a case study. The $35 billion ABCP market froze in August 2007 when it became apparent that the alleged safe product was, in fact, quite risky since some of the paper

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was tied to US mortgage-backed securities. To respond, the Pan-Canadian Investors Committee for Third Party Structured ABCP, a private sector ad hoc group, was formed and put together a rescue plan reissuing new paper in order to secure investments. The federal government, along with Ontario, Québec and Alberta’s provincial governments, financially supported the plan; the federal government provided $1.3 billion in the provision of a senior funding facility. The private sector plan was approved but would have failed without government support. The Canadian example should not be over-generalized bound by particular circumstances such as the size of its financial markets. Nonetheless, the Canadian experience is a challenge both for those that call for substantial new regulatory powers for the state, as well as for those that still believe that the market can be left to regulate itself.

Panel 2B Risk, Regulation & Governance: Exploring Emerging Regulatory Trends in the Oversight of New Technologies II

1 Mapping the Defining Features of the EU Regulatory Approach to New Health Technologies Tamara Hervey, Mark Flear

ABSTRACT The paper seeks to map the defining features of the European Union’s regulatory approaches to new health technologies, and consider how these are to be legitimated. Our preliminary hypotheses are as follows. The ‘internal market’ and markets in general are the dominant frame for EU regulation of new health technologies, where the key focus is on getting products to market. Risk is also an important framing device, particularly because of its link to the internal market (identifying and managing risk, and the EU seems to be more sensitive to risk that other jurisdictions). Rights and ethics appear to be an important part of the regulatory environment, but the reality is that their role is essentially demoted to that of legitimating devices.

These are strong claims that will need to become more nuanced in terms of both different new health technologies and different regulatory strategies adopted by the EU. Our approach is to follow the ‘life span’ of some selected new health technologies (from question in the mind of a scientist to receipt by a patient under a national health system), as case studies.

The paper forms part of an ESRC-funded project on European law and new health technologies.

2 Risk Regulation and Industry Behaviour -An analysis of (theoretical) factors influencing

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manufacturers decisions to comply with quality and safety regulations for products. Marie-Jeanne Schiffelers Ultrecht University

ABSTRACT The relationship between risk, responsibility and regulation is rapidly emerging as an important theme in policy research. There is a cycle of increased regulation to meet the demands of an increasingly risk averse society. Risk regulation therefore is a field of growing interest. In the past research in this field mainly focused on regulatory behaviour. More recently a development can be seen in which scholars have turned their attention to the industry, the manufactures of he products that are the prime subject of these regulations. One of the key questions here is how manufactures respond to the set of regulations they have to meet? In other words how do they respond to different modes of regulation?

The requirements dealing with the registration and release of products often leave room for manufacturers to choose testing methods they perceive as most suitable to prove their products’ quality and/or safety. This leads to the question how manufacturers make use of this discretionary space? How does the level of discretion affect the decisions made by industry? For example does the level of discretion affect the decisions made by industry when it comes to product and testing innovation?

This paper focuses on that part of risk regulation that is put in place to protect consumers and the environment from possible health effects of products, like pharmaceuticals, chemicals, food, cosmetics. The paper aims at contributing to the theoretical discussion on industry behaviour in the field of risk regulation in general and more specific on decisions made in the quality and safety control of products. It does so by comparing existing literature on regulation and industry behaviour and implementation processes. The paper results in a summary of factors that potentially shape the manufacturers decisions in implementing quality and safety regulations.

3 As Good as It Gets | On Risk, legality and the precautionary principle Bald de Vries, Lyana Francot Ultrecht University

ABSTRACT Legality offers legal certainty in the sense that it prohibits the exercise of arbitrary power. As an aspect of the rule of law it provides boundaries to the state’s playfield (only if and when foreseen by law, the state may act). The precautionary principle stipulates that the absence of scientific certainty is no reason not to act to prevent (environmental) harm. Here, uncertainty is the basis for action. (In the end the principle seeks to reduce uncertainty as well but is uncertain if the desired result is within reach). The precautionary principle potentially expands the possible actions of the state. The axis certainty-uncertainty exposes a tension between legality and the precautionary principle. It is this tension that is addressed in this paper.

4 Regulation of Medical Technologies: hospitals and physicians in Malaysia and Singapore M. Ramesh University of Hong Kong

ABSTRACT Globalization of trade in services is only partially reflected in the health care sector. Unlike most other sectors, trade in the sector takes the form of buyers travelling abroad to visit international providers rather than vice versa despite the relative efficiency of the latter arrangement. This anomalous situation is the result of regulatory barriers against foreign providers in most countries. The proposed paper will examine regulations governing foreign healthcare providers in Malaysia and

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Singapore. The two countries maintain numerous steep barriers in the health care despite their overall enthusiastic commitment to free trade and their ambition to be regional “medical tourism” centers.

Panel 2C Sub- National Actors and Sustainability

1 The Receptive Capacity of Firms and the Regulation of Ecological Modernisation Gary Lynch- Wood, David Williamson University of Manchester

ABSTRACT An imperative feature of ecological modernisation is the design of suitable regulatory frameworks. The emerging emphasis is on tools of governance which essentially push the focus of decision- making responsibility away from the state and towards the firm so that industries’ environmental potential is maximised. There is more emphasis on self-governance and less reliance on government control through imposition of prescriptive rules. The argument for transferring some regulatory capacity is both persuasive and appealing, and is a feature of political and environmental discourse. But the implications are significant. In this article, the authors develop and introduce a model which shows that firms have different receptive capacities that may affect how they respond to regulation. Receptivity is aligned to three organisational factors: resources, visibility, and compliance (moral) orientation. If we take this argument to its enth degree, then all firms have unique response capabilities because these factors mean they have different receptive capacities. However, the authors show that groups of firms share sufficient commonalities for regulatory strategies to be effectively targeted. They conclude that some firms may by more receptive than others to the types of regulation that are conducive to ecological modernisation, so any transfer of regulatory capacities must be administered carefully.

2 Comparative Campaigns: Organizational and Decision Aspects of ENGO Ranking and Rating Campaigns Christine Overdevest University of Florida

ABSTRACT Environmental advocacy organizations are increasingly using ranking and rating strategies to shape the environmental sustainability behaviour of firms by creating rankings of an industry’s environmental performance. Rating and ranking campaigns are campaigns where environmental and other civil society groups collect information often through surveys sent to firms, resulting in data on environmental policies and practices then used to construct a ranking of firms. Previous research on rankings have focused on media conglomerates and their rankings of academic departments, such as the US New and World Reports ranking of law schools (Espeland and Sauder 2007), and the Financial Times ranking of business schools (Devinney et al. 2008, Wedlin 2007). Many of these studies focus on the “dark side” of ratings and rankings. Business and law schools

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divert resources from long-standing organizational goals to meet short-term pressures created by rankings (Martins 2005; Espeland and Sauder 2007). Ranks place a psychological cost associated with coercion by public shaming or humiliation (Devinney et al 2008). Critics point out that consumers of the rankings, students, alumni, donors are thought to accept the credibility of the rankings uncritically. The measures of educational quality constructed by media firms have been criticized as “hamfisted” and “arbitrary” moving targets (Gioia and Corley, 2002, Martins 2005). On the other hand, research has suggested that media rankings reduce organizational buffering, preventing slippage between words and deeds (Sauder and Espeland 2008) because ranked actors internalize the discipline of ranking. Research has argued that rankings help to shape the field of action, the identity of actors, and the rules of competition, by giving legitimacy to the highly ranked and encouraging others to compete against those legitimated (Wedin 2007, Rao 1994). While previous research has focused on rankings by media conglomerates (UK Financial Times and US News and World Reports) (Davennes et al 2008), this paper examines the case of environmental advocacy organizations strategic use of rankings to change the environmental responsibility behaviour of firms. This paper argues that ENGOs, because of the unique challenges they face in using rankings, have developed and learned to deploy various strategies in attempts to increase the effectiveness of ranking campaigns. Furthermore, the literature on rankings, in part because it has focused on media campaigns, has been underattentive to these factors which affect the effectiveness of rankings as strategic devices. This paper uses three cases of environmental ranking campaigns—the WWF green tissue paper campaign rankings, the Carbon Disclosure Projects carbon disclosure rankings and the Greenpeace Seafood Campaign rankings—to illustrate how NGOs organize rankings as social change tactics in everyday life. The research has implications for environmental civil society-based governance strategies.

3 Governance and Sustainable Urban Development Harald Heubaum University College London

ABSTRACT The role of local governments has become increasingly important in the movement to adopt policies that can mitigate the effects of climate change. As national and international actors struggle to reach binding agreements on emissions reduction, numerous sub-national governments all over the world have assumed the mantle of responsibility by developing their own climate change mitigation policies. However, not all local governments demonstrate the same commitment or capacity to fight climate change. This presents a particularly crucial problem in local environmental governance as many pollution problems cross jurisdictions and require collective action across local governments. In our research, we ask the question: what factors cause some local governments to be leaders in climate change mitigation while others remain laggards? In investigating this question, we analyze policies that are specific to individual jurisdictions (such as the promotion of alternative energy sources), but we also examine the efforts of local governments to collaborate horizontally with other governments in order to stem cross-boundary pollution. Much research in this area has focused on the United States. For example, we know that county-level, appointed administrators are often more likely to prefer incentive-based user fees, rather than more command and control policies, such as urban growth boundaries (Feiock et al. 2008). Also, the presence of organized, environmental interests can push local governments into joining international climate change initiatives (Zahran et al. 2008). However, Zahran et al. also find, somewhat alarmingly, that susceptibility to climate change risk, such as living on low-lying coastlines, does not necessarily prod governments into action (2008). Following this, May and Burby find that for these laggard local governments, a more coercive, mandate-based, vertical government structure may be necessary to spur them into action (1996). While these findings are instructive, they do not necessarily tell us everything there is to know

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about local climate governance in the United Kingdom. While the U.S. is a separation-of-powers, federalist system, with strong local governments, the U.K. is a majoritarian, parliamentary system, with a tradition of weaker local government that is slowly changing, with the creation of mayoral offices. As such, the structure of organized interest influence may also be different, as groups seek different pressure points in government. Ultimately, our goal is to evaluate the effect of climate change risk, local government structure and the presence of various organized interests on local government capacity and willingness to mitigate climate change. We seek to do this first through a U.K. case study, thus adding a comparative element to the American urban politics literature.

Panel 2D Public Sector Norms and Values

1 Does Formal Independence Matter for Regulatory Outcomes? Measuring Regulatory Interdependence in Networks: The Case of Telecoms Sector in Egypt Ahmed Badran, Oliver James University of Exeter

ABSTRACT Work on regulatory outcomes has traditionally concentrated on the consequences for outcomes of regulatory agencies’ independence from political overseers and their independence from regulated bodies. Formal measures of independence are often used, especially in comparative studies. However, regulatory interdependence suggests that multiple actors, different political actors, regulators, regulated bodies and broader social and economic actors are all important influences on outcomes. Informal as well as formal aspects of these relationships are important. This paper argues that advances in methods for mapping networks assist the development of measures of informal and formal regulatory interdependence and their effects on regulatory outcomes. It contrasts a perspective on regulatory outcomes in Egyptian telecommunications that uses formal measures of independence from politicians and regulators with a perspective mapping formal and informal regulatory interdependence. Empirical material collected from analysis of documents and 44 interviews with different stakeholders in the Egyptian telecommunications market is used. Measuring the independence of the regulatory agency against the formal criteria shows a higher level of independence compared to informal measures which indicates that in practice regulatory independence is more limited. Politicians are able to circumvent formal restrictions on intervention and major incumbents use their resources of expertise to influence regulatory outcomes. Broader societal actors exert influence in the network as well as the triangle of politicians, regulators and regulated. The paper suggests areas of regulatory outcomes where narrower measures of formal independence from politicians and regulators perform well in explaining regulatory outcomes relative to the full measures of regulatory interdependence, and where they are less useful. These findings offer a way of assessing the strengths and limitations of much cross-national regulatory analysis.

2 Regulatory Independence and Regulatory Networks in the U.S. Experience Janice Beecher Michigan State University

ABSTRACT Institutional independence is a hallmark of regulation, as exemplified in the quasi-judicial structure and practice of U.S. public service commissions. Accordingly, regulators should be independent from the interests they regulate and the various stakeholders of the regulatory process. Political

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independence is also idealized in regulation?s original conception, although the loss of independence from executive and legislative bodies is increasingly palpable. Regulatory agencies are more often viewed as administrative extensions. Regulatory policy appears more agenda-driven and regulatory process appears more consensus-oriented. Professional staff may be less independent and less influential in this context as well. Regulatory education and research can become politicized too. Regulatory networks can bolster independence by providing the means to share information, improve technical competency, elevate substantive debate, and pool resources. Regulatory networks can undermine independence by inviting influence, enabling coercion, constraining dialog, and homogenizing policy. While the regulatory network plays a positive role in the diffusion of practice, the diffusion of policy may be at odds with the independent regulatory model. Regulatory networks themselves are influenced by political and financial motives related to their survival, which may have distorting effects. Although regulatory networks are dynamic over time, socialization, risk aversion, and diffuse accountability will mitigate change. This conceptual paper will provide a conceptual framework and observational perspective.

3 Reasserting the centre in a multi-level governance architecture: potential implications of shifts in domestic reform environments on the dynamics of regulatory governance in the European Union. Ole Danielsen University of Bergen

ABSTRACT This conceptual paper asks what happens to a multi-level executive configuration that has developed in the wake of New Public Management (NPM) era reforms when domestic reform environments change. A notable organizational development in the context of implementation and enforcement of European Union (EU) policies has been the close ties that have been established between the European Commission and national regulatory agencies that have been organized at arms length from domestic executives due to public sector reforms. The domestic de-coupling of regulatory agencies has enabled a parallel re-coupling at the supranational level of governance, and several studies indicate that these agencies are increasingly operating in a double-hatted manner, serving both a national and supranational centre when performing their regulatory tasks. These developments are regarded as indicative of an executive transformation in Europe, where a new executive configuration cutting across established territorial boundaries is developing. It is generally assumed that this evolving pan-European executive order supplements, rather than replaces, the established nation-state based political-administrative order. This paper however argues that the peaceful coexistence between European and national political-administrative arrangements is fragile and might reflect a convergence in basic governance beliefs among national and supranational policy-makers, in which regulatory autonomy is given primacy. This convergence is however time- and context-dependent. In this paper it is argued that the recent shift that has occurred in several countries towards post-NPM reforms focusing on whole-of-government and a reassertion of the centre might potentially be at odds with the organizational preferences that has proved constitutive for the evolving European executive order. Furthermore, these organizational preferences seem to persist at the supranational level of governance. As such it is argued that a multi-level governance arrangement that has been facilitated by domestic administrative reforms will not remain unaffected by recent reform developments focusing on increased coordination between domestic public sector organizations at different levels of governance, and might generate tensions in the multi-level arrangement that undermine the above-mentioned institutional coexistence hypothesis.

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The paper argues that these tensions will primarily materialize at the domestic level, between regulatory agencies and their parent ministries. However, domestic regulatory agencies are increasingly embedded into transnational networks that have gradually become an established part of the EU governance architecture, making it likely that domestic reforms might have significant implications for the dynamics of EU governance. Furthermore, transnational networks between autonomous regulators might provide powerful buffers for regulatory agencies seeking to safeguard their autonomy against political interference. Against this backdrop, the paper suggests that further investigations into the enduring and dynamic tension between professional autonomy and political control might generate important insights regarding the future dynamics of EU governance. Thus, future studies focusing on transnational regulatory governance might benefit from further recognizing the potential EU-level effects of domestic organizational developments affecting the balance between the two concerns.

Panel 2E Regulatory Networks in the EU

1 Influence and brokerage: Network constraints in EU banking regulation Dimitris Christopoulos, Lucia Quaglia University of West England, University of Sussex

ABSTRACT In this article we analyse the interactions among key actors in EU financial services governance. We have chosen a key decision of banking regulation and explore case study data in tandem with relational data for these actors. We have been particularly interested in the flow of information and the influence networks among these key actors. Triangulating in-depth case study analysis with qualitative interview data and social network analysis we have been able to investigate a number of interesting exploratory hypotheses. We have been able to associate these actors brokerage role and propensity to extroversion with their relative influence in the policy making process.

2 Regulatory Networks and policy diffusion Martino Maggetti, Fabrizio Gilardi University of Zurich

ABSTRACT Research on diffusion in social and policy networks has shown that individual characteristics and network properties critically influence the threshold, timing, sequence and extent of diffusion. This paper explores the theoretical and empirical linkages between characteristics of networks and actors on the one hand, and the mechanisms and outcomes of diffusion on the other. The paper first examines the conceptual and methodological arguments linking network structures to the mechanisms and outcomes of diffusion processes. For instance, it is plausible that relatively small, pluralistic and non-hierarchical networks foster a learning process through which norms, standards and practices are diffused, which in turn could lead to superior collective performance. Second, the paper investigates the connection between actors positions, policy attributes, and individual outcomes. For instance, it can be argued that central actors in networks are able to shape the diffusing norms, standards and practices so as to try to maximize their returns following a possible

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widespread adoption of the policy. These arguments are illustrated using data from a preliminary analysis of two European networks, namely the Committee of European Securities Regulators and the Independent Regulators Group.

3 Networked governance: the European Competition Network - operation, implications and impact' Kathryn Wright, Hussein Kassim University of East Anglia

ABSTRACT Recent scholarship suggests that the increased recourse to networks is a strategy of second-best. In a context where agencies have proliferated, where policy enforcement is the responsibility of national authorities, and where the concentration of regulatory power rests at the EU level (whether in the hands of agencies or the Commission), networks appear to be the only available option for ensuring the coherent implementation of EU policy. At the same time, though member governments recognize their value, they have endeavoured to make sure that networks are weak. Against this background, the European Competition Network (ECN) is exceptional in terms of its structure, responsibilities, and power. Based on original primary research conducted by the authors, this paper examines the conditions under which the ECN emerged, its design and its institutionalization, and, contrasting the ECN with EU networks in other domains, explains its singularity. Drawing on on-going research, it also assesses the impact of the network on its members, both DG Competition and national competition authorities

Panel 2F Changing Patterns of Food Safety Regulation in the EU and China: Comparative Perspectives on Multi- Level Governance

1 Regulating without autonomy: Food safety regimes in China Neil Collins, Joern Gottwald University College Cork

ABSTRACT The analysis of regulatory regimes has never been more prescient. By understanding the cross cutting pressures associated with regulation, it is possible to understand the dynamics of a political system¹s policy outputs and the limits of its reform capacity. It is also timely to suggest ways of re- imagining regulation as a political process as well as a tool of economic policy. In this paper, the experience of regulatory regimes China is employed to look at how the pressures of local interests have been accommodated to the demands of globalised capitalism ¬ sometimes by conceding, other times by colluding. The analysis will also illustrate the changing nature of the relationship of the

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state and its regulations to the citizens of China ¬ again, sometimes by conceding, others by coercing. The analysis will examine four interrelated dimensions of regulation: organisation; guiding principles; configuration of actors; and, specific reform capacity. Food safety has become a very serious issue after a number of incidents that undermined both Chinese and foreign confidence. In 2008, six children died and nearly 300,000 others were sickened after consuming adulterated milk powder. Similarly, in recent years, noodles containing lead, fake alcohol, soy sauce made from human hair and eggs with melamine have joined a long list of consumer concerns. Tainted milk powder was at the centre of a previous scandal in 2003 that also prompted regulatory changes though these were thwarted by bureaucratic resistance.

China¹s first comprehensive Food Safety Law (FSL) came into effect in June 2009. The law had been expected for several years but each of the food scandals caused a delay as the latest lessons were absorbed. This paper will examine the impact of the new law on Chinese regulatory practice.

2 Food Safety Policy Coordination in Three Chinese Cities: Beijing, Hong Kong, and Taipei John P. Burns, Guy Peters University of Hong Kong, University of Pittsburgh

ABSTRACT The paper examines the impact of regime type on the implementation of food safety policy in three Chinese cities: Beijing, Hong Kong, and Taipei, chosen because they are embedded in a single cultural milieu but are characterized by different political systems ranging from authoritarian to competitive democratic. We chose these cities because they are each a major administrative center with their own levels of government and to simplify the analysis. We use a variety of institutional perspectives and case studies to examine the evolution of coordination mechanisms for food safety policy in the three places. The paper is based on archival data and interviews with key officials, the food trade, and civil society groups in the three cities. We examine various regimes’ handling of crises such as the adulteration of milk powder on the China mainland in 2008, and the management of live poultry markets in the three cities in the wake of the widespread outbreak of avian flu.

We argue that regime does make a difference in the capacity of systems to coordinate the implementation of food safety policy, but that comparisons across the three systems are exceedingly complex. Other factors such as the importance of agriculture to the economy are also at work. Beijing’s more authoritarian political system, narrowly focused performance management regime, and preference for state-owned enterprise has kept regulatory autonomy weak and even led to a kind of bureaucratic regulatory capture. Taipei’s more pluralistic politics and strong civil society has provided incentives for stronger, more autonomous regulatory institutions. Because of the regulatory nature of food safety policy and because of generally pro-state orientations that characterize Confucian society, hierarchy has played the dominant role as a coordination mechanism.

3 Regulation of Food Safety in the EU: Changing patterns of multi-level governance Gabriele Abels, Alexander Kobusch University of Tuebingen

ABSTRACT After several food scandals in the past decades, regulatory regimes in food safety have been reformed on the level of the European Union and in most EU member states. In most countries

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independent agencies have been created mainly performing tasks in risk assessment. In our contribution we focus on national institutional choices concerning these agencies in all 27 Member States and ask whether or not these choices can be explained by path dependency or rather as a phenomenon of Europeanization at the national level. Based on a survey of 23 out of the 27 EU member states, we can observe some trends, although there is no clear regional pattern regarding the institutional design of food safety agencies. The main features are either inter- or intra- institutional separation of risk assessment and risk management or a more; furthermore, these agencies have a more or less central role within the emerging network between the European Food Safety Authority EFSA and the national Competent Authorities. We assume that a certain institutional design of food safety agencies provides these agencies with a more central position in the evolving multi-level regulatory network.

4 Shortcomings in enforcing EU food law. What does EU Food Law stand for? Daniele Pisanello Lex Alimentaria

ABSTRACT Aiming at a number of different objectives (namely: a high level of protection of human life and health, the protection of consumers' interests, fair practices in food trade) modern EU Food Law consists of a very impressive set of rules which cover many aspects of the food business and activities by public authorities involved in conformity control. In this context a qualified level of capacity in enforcing food law depends on a number of drivers. Inter alia the following have adverse effects: big trading flows and limited investigation resources, poor knowledge of safety related new rules, low training in quality oriented procedures. As regards the private sector, rules adopted on EU level need the enforcement by national Competent Authorities with specific regards to (i) HACCP based procedures, including hygiene process criteria, crisis management plans and other best practices to guarantee compliance with food law; (ii) a clear and appropriate set of liability rules, both on sanctions and civil liability as well. The paper will also discuss relations between Reg. EC No 178/2002 (General Food Law, GFL) and the Council Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products. On the other side, Public Authorities (rectius, Competent Authorities) are called to test compliance of products marketed within the Single Market. The Paper is designed to analyse how EU Food Law (Hygiene Laws) requires a radical change of mind for Civil Servants operating within the framework of official control for foodstuffs. On a broader sense, the impact of EU Food Law will be assessed on a twofold ground: the new Food Hygiene Packet and market surveillance applied according with Decision No 768/2008/EC (on a common framework for the marketing of products) and related legal acts. Public Authorities’ point of view is of interest because they are a fitting cluster of people/activities which are called to obey and enforce the food related rules. In this context the new examination method of “audit” will be discussed as a potential tool to reduce the risk of ineffectiveness of the new food safety regulation caused by inefficient enforcement.

Panel 2G

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The Politics of Regulatory Institutions in the Global South

1 International standards and local adjustments in developing countries– the state audit case Maria Gustavson University of Gothenburg

ABSTRACT Reforming the public administration in developing countries is an old idea, which started already when “western” public administration structures were introduced in the colonial territories. The introduction of foreign structures in new contexts has throughout history proved to be problematic. Consequently, there is today an awareness among scholars as well as practitioners, that when reforming the public administration in developing countries adjustments to local circumstances have to be made. “Organizational packages”, international standards, or ideas which work in one context cannot simply be moved to another. However, if the purpose of a reform is to create a change how will this be achieved if there is full adjustment to already existing structures? The study explores the relationship between international standards and local adjustments. Using governmental audit as an area of public administration reform, the paper presents a comparative study of the Supreme Audit Institutions in Namibia and Botswana. The field work conducted consists of observations and interviews, as well as document studies. A main result is that there is a strong professional identity among auditors, where they view themselves as participants on an international arena and where they strive for a harmonization in line with international standards. Local circumstances are viewed as obstacles to achieve harmonization. The results of the comparison between the Supreme Audit Institutions in Namibia and Botswana also show the significance of development cooperation programs, where such programs may contribute to an understanding of how these organizations have developed.

2 The Embedded Elements of Autonomous Regulation: State, Market, and Civil Society in Brazilian Telecom Daniel I. Buch University of California, Berkeley

ABSTRACT This paper uses development theory to examine the embedding of relations between telecom regulatory agencies and their key interlocutors, including telecom providers, civil society groups, and other government organs. As Peter Evans (2008) has recently argued, a key contemporary developmental challenge for states in the global South is to increase their capacity to partner with not only capital but with a variety of civil society actors in an effort to produce outcomes that promote both the accumulation of human capital and the consolidation of democratic regimes. Given the central role of emerging information technologies in facilitating the expansion of human capital, telecommunications regulation has become a key nexus in the state/capital/civil society developmental equation.

Drawing on in-depth interviews with regulatory agency staff, civil society groups, and corporate actors as well as ethnographic observational data, I show that while the creation and consolidation of an autonomous telecom regulatory agency in Brazil has indeed contributed to a productive transformation of the industry via a reformulation of the state-capital relationship, a paucity of

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substantive ties between the regulatory agency and civil society actors and groups has limited the agency’s effectiveness in promoting a broader, capabilities-expanding transformation of the Brazilian telecom sector. In order to explain this contradictory outcome, I return to the debates that accompanied the privatization of the state telephone monopoly and the creation of the telecom regulator in the late 1990s, arguing that civil society’s exclusion from the regulatory process was in large part structural and ultimately stems from a then-dominant neoliberal conceptualization of the state’s primary tasks in promoting industrial transformation and development, one in which the state and capital were understood to be the principal actors while consumers and other civil society stakeholders were seen as passive, indirect beneficiaries.

I conclude by examining a recent set of reform initiatives spearheaded by the Lula administration, evaluating their potential to bring greater civil society pressure to bear on telecom regulation and promote the expansion of human capital and productive capabilities for the whole of Brazilian society.

3 Intellectual Property Rights, Innovation, and Economic Growth in Sub – Saharan Africa Samuel Adams

ABSTRACT The study looks at the impact of intellectual property rights (IPRs) on economic growth for a cross – section of 34 Sub-Saharan (SSA) countries from 1985 to 2003. Using three different estimation techniques (Ordinary Least Squares, seemingly unrelated regressions, and Fixed effects), the results of the study indicate that: 1) strengthening IPRs has a negative effect on economic growth; 2) domestic investment is positively correlated with economic growth; and 3) human capital is an important determinant of economic growth. The findings of the study suggest that a “one size fits all” approach to harmonizing IPRs in developing countries might not produce the expected benefits for Sub Saharan African countries.

4 Regulation, Uncertainty and Financial Crisis Ebru Kayaalo Istanbul Sehir University

ABSTRACT The study looks at the impact of intellectual property rights (IPRs) on economic growth for a cross – section of 34 Sub-Saharan (SSA) countries from 1985 to 2003. Using three different estimation techniques (Ordinary Least Squares, seemingly unrelated regressions, and Fixed effects), the results of the study indicate that: 1) strengthening IPRs has a negative effect on economic growth; 2) domestic investment is positively correlated with economic growth; and 3) human capital is an important determinant of economic growth. The findings of the study suggest that a “one size fits all” approach to harmonizing IPRs in developing countries might not produce the expected benefits for Sub Saharan African countries.

Panel 2H

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The Rise and Fall of Private Regulation of Financial Markets

1 Developments in Regulation at the Amsterdam Stock Market Over Time. Six Stages of Regulation with regard to Unfair Practices at the Amsterdam Stock Market from 1602 onwards. Francois Kristen Ultrecht University

ABSTRACT Financial markets are governed by prudential rules and conduct of business rules to ensure investor confidence. Such rules emerged almost from the beginning of the trade in shares. A preliminary study gives rise to the hypothesis that six stages of regulation at the Amsterdam stock market can be identified: • First stage (1602 till ±1720): Experimenting Some basic prudential rules and a prohibition of short selling were enacted by local authorities. Compliance was considered to be unethical. Insider trading and market manipulation occured. • Second stage (1720 till ±1850): Self-regulation The first European crash of 1720 triggered regulation. Malafide traders were banned. In a period of stabilization the first professional association of traders came into being. Self-regulation was adopted in order to restore investors’ confidence. • Third stage (1850 till 1914): Competition between trade associations Traders organized themselves and a competition in self-regulation started. Finally, one exclusive trade association adopted codes of conduct. • Fourth stage (1914 till 1950): Introduction of government regulation The Stock Exchange Act 1914, based on the concept of investor protection, provided a legal framework for the codes adopted. • Fifth stage (1950 till 1989): Reluctance to extend government regulation Only after incidents in the 1980’s and signals that the European Community would intervene, the first criminal offence of insider trading entered into force in 1989. • Sixth stage (1989 till present): Increasing government regulation After a few scandals self-regulation was replaced by strict and detailed public rules. The European Union increased its interventions in regulating financial markets. A multi-level regulatory approach was adopted. The paper aims at underpinning these six stages. It allows us to learn lessons from the developments in setting standards at the Dutch stock market over time and the use of criminal law to back up those standards.

2 The Paris Financial Market in the 19th Century: an Efficient Multi-Polar Organization ? Pierre- Cyrille Hartcoeur, Angelo Rivo EHESSS, European Business School

ABSTRACT The literature in financial history usually considers London as the only centre of the late 19th century’s financial globalization, and explains it at least in part by the efficient organization of the London Stock exchange (LSE). The LSE is characterized as having been a softly regulated market, where entry was easy both for traders and issuers [Michie (1998), Neal (2004), White (2006)]. The LSE microstructure is also considered as the natural and optimal one by much of the theoretical literature on stock markets, which argues that free entry decreases transaction costs and increases

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both liquidity and diversification, resulting in economies of scale and externalities attracting traders, issuers and investors. Our paper tries to explain why the Paris Bourse was able to be so successful in spite of the supposedly inefficient monopoly and regulations that the State imposed it. We focus on the fact that the Paris market actually included several different market organizations: the Parquet (the official Bourse, organized by the agents de change), the Coulisse, the Marché libre, and inter- bank direct operations. We argue that this multi-polar organization, was efficient, relying on the specialization it allowed,and the complementarities it helped develop among markets. We incorporate in the discussion the recent theoretical literature that shows that no single market can satisfy the heterogeneous preferences of all issuers and investors, so that a multi-polar organization can be a superior solution. We demonstrate our claim by looking not only at the rules but also at the actual functioning of the Parquet thanks to its archives which we recently classified. These archives also allow us to build new statistical series which permit evaluating the performances of the Parquet during the 19th century: volumes traded, seat prices, transaction costs, and operational risks. If one supposes that the Parquet was the least efficient segment of the Parisian market, this will provide us with a lower bound for the global efficiency of that market, which should be compared with other markets on similar concrete grounds.

3 Regulation, litigation and private enforcement mechanisms on the Amsterdam market for VOC shares, 1602-1700 Lodewijk Petram University of Amsterdam

ABSTRACT This paper focuses on the world’s first stock exchange, the seventeenth-century market for Dutch East India Company (VOC, founded 1602) shares in Amsterdam. In the second half of the seventeenth century, two complementary regulatory mechanisms were effective on this market. The authorities of the Dutch Republic regulated the ‘official’ market and the court of law enforced the contractual agreements. At the same time, there existed a sub-market, organized in trading clubs – private gatherings of share traders, possibly with entry restrictions. These sub-markets had their own private regulatory mechanisms. Its participants could not rely on the legal system of the Dutch Republic, because their turnover on the sub-market exceeded the amount of shares they actually owned – they took short positions, which was strictly prohibited. My paper does two things. It first shows how the official regulatory mechanism became effective. It analyzes how the courts of law ruled in share trade related courts cases and thus fitted the trade in corporate equity into existing legal concepts (most notably the concepts of ownership, transfer of ownership and endorsement of financial contracts). This process was completed by 1630. It took away any legal doubts investors could have regarding the share trade and as a result, participation in the market grew. It soon became clear that there were limits to the growth of the official market. The possibilities for growth on the forward market, however, were unrestrained. But investors were hesitant to participate on this market, because the legal system did not enforce large part of the forward contracts; traders could easily renege on their contracts. As a solution to this problem, the traders devised a system in which each participant cared highly about his reputation. They thus established a private enforcement mechanism based on the reputations of the participants.1 Interestingly, the creation of trading clubs was an important step in the development in the development from publicly accessible markets to the stock exchanges we are familiar with today, where only authorized traders are allowed to participate.

Panel 2I

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Reconceptualising Regulatory Capacity II

1 Control Regime (Or why State Comptrollers are liable to err?) David Peled University of Haifa

ABSTRACT The article questions the possibility of any effective bureaucratic central control system. Comparing the functioning of a central control in totalitarian versus democratic regimes reveal a paradox; namely: if the central controls of Totalitarian states live to their infamous efficacy then they might be considered more powerful than democracies while using equal sources of power. Additional paradox is revealed when a State Controller of a democracy uses standards of private industry while evaluating the efficacy of public administration. He might conclude, like the Israeli State Comptroller did, that a prosperous democracy uses an unworthy control system. By combining bottom-up and top-down data flow analysis, the article proposes a matrix of unit vectors for defining deviations from theoretical processes monitoring. The introduction of a newly developed model: “The Control Regime model”, contributes to solving the paradoxes.

2 Perceptions Matter: The use of Branding, marketing and PR activities by public and private regulatory regimes. Dan Hayden University College Dublin

ABSTRACT Non- State market- driven (NSMD) regulatory regimes like Fair Trade Labelling (FLO) and the Forest Sustainability Council (FSC) certification are growing more common, more developed and more successful. The importance of marketing techniques for these regimes has long been recognised by macro-marketing and regulation scholars alike. These regimes are characterised by their use of sophisticated branding and promotional activities which access consumers’ “preference for processes” (Kysar, 2004). Without these strategies, consumers would be unable to identify products which comply with their preferences, refuse to pay the almost- ubiquitous price premium and the regime would fail.

Yet just as NSMD regimes must respond to the demands of consumers to sustain their regimes, so too must state and hybrid regulators respond to the political demands placed upon them- whether from industry or the larger public. These pressures escalate greatly in the face of crises, often producing sub- optimal regulatory outcomes.

While they are subject to different institutional dynamics, both public and private regulatory regimes share a primary goal of legitimacy. This paper will demonstrate how public and private actors manipulate preferences through the use of branding, marketing and PR activities to gain legitimacy. It will draw together a number of theories in the area of regulatory governance, political marketing, macro- marketing with particular reference to Black (2007), Suchman (1995), Tyler (1997) and Kysar (2004) to construct a theoretical framework for the use of brand and marketing outside the NSMD realm.

3 From New Public Management to Public Value. An examination of how programs of voluntary self-regulation build public value and contribute to regulatory growth. Christopher Walker New South Wales University

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ABSTRACT This paper examines models of voluntary self-regulation to consider if such applied examples of public policy illustrate the mobilisation of Moore’s (1995) concept of ‘public value’ as shaping public sector management strategies. The regulation literature has extensively examined the influence of New Public management (NPM) practices in orientating public sector preferences towards regulatory solutions (Christensen and Laegreid 2006). This analytical approach has value in explaining the growth of independent regulators to oversee privatised industries and the general preference of agencies to draw on regulatory action to shape markets and stimulate competitive service provision (Jordana and Levi-Faur 2004; Majone 1996; Vogel 1996).

However, neoliberal interests in the expansion and development of markets is only one of a number of factors contributing to the explosive growth in regulatory interventions. Concerns for safety, rights and environmental protection have also generated huge growth in social regulation (Moran 2001). Whilst NPM and regulatory capitalism are helpful in explaining the growth of regulatory governance (Levi-Faur 2005), analysis of policy practice suggests a broader range of concerns are at play shaping agency responses and their preference for regulatory solutions.

This paper applies Moore’s (1995) model of ‘public value’ to a program of voluntary self-regulation in the Australian trucking sector and examines its explanatory value for understanding regulatory growth. Self-regulatory strategies readily fit into a public value framework. They are seen as operationally feasible, drawing on limited state resources. Regulatees more readily accept them and when supported by government agencies the authorising environment (consisting of public and private interests) steadfastly confirms their legitimacy as acceptable methods for promoting and managing compliance.

Drawing on empirical data from interviews with industry auditors and regulators discussion examines how external parties are drawn into the regulatory process to build compliance capacity and enhance the social and economic value of public policy programs. Does the concept of public value provide useful insight into understanding the forces that are shaping the explosive growth in regulation and the ongoing shift towards regulatory governance? How useful is this analysis in an age of crisis? And does this help explain why often discredited models of ‘light touch’ regulation are still promoted as options for progressing the policy objectives of the state?

Panel 2J Conceptual and Theoretical Analysis of Regulation

1 Predominant Cultural Views and Regulatory Responses to Oil Spill Disasters in United States, France and Spain Salvador Parrado UNED, Spanish Distance Learning University

ABSTRACT The more general claim that culture matters has been used by different cultural approaches. The grid and group cultural theory with its claim of parsimony have been extensively used in several contexts although the field of public and regulatory policies is rather underexplored.

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Following a methodology set by Martin Lodge and Kai Wegrich, this paper compares the regulation of risk and the response to risk in a comparative way by analysing arguments in print media covering the Exxon Valdez (United States), Prestige (Spain) and Erika (France) oil spills. Two conditions of falsability of cultural theory will be tested both in the response to oil spills and in its prevention: different institutional contexts (US vs France and Spain) produce similar world views and similar institutional contexts (France and Spain) produce different worldviews.

The chosen case studies of Exxon Valdez, Erika and Prestige oil spills were the hallmark to international legislation at both sides of the Atlantic and in the international arena giving way to the Oil Pollution Act 1990, a new Alaskan State Statute and the international Convention on Oil Pollution (OPRC – 1990) after the American disaster and to the formulation of the Erika I and II packages by the EU and the final enactment of this regulation after the Prestige disaster. Through the analysis of cultural biases in print media and the entailed worldviews of previous and subsequent regulatory regimes, the paper tries to explain whether regulatory change happened, if it reflected universal world views or of a specific group and to what extent there is an alignment of specific subclaims between regulatory changes and critique/normative views expressed in the media.

2 Governance Legalism: Hayek and Sabel on Reason and Rules, Organization and Law Amy J. Cohen Ohio State University

ABSTRACT In the United States, the legal subfield of “new governance” has generated passionate debate about the distributional effects of its efforts to democratize political decision making through the bottom- up production of law. Like many recent approaches to regulatory governance, new governance proposes to devolve state power to nonstate actors to generate the rules and norms that will govern their own behaviors and practices. Analysts, however, caution that new governance may reinforce neoliberal efforts to replace the state with market forms of regulation and control. But predictions about the politics of new governance’s techniques—self-regulation, devolution of state power, subsidiarity, anti-adversarialism, and so on—are extraordinarily complex: agents can and do deploy all these techniques for a shifting range of social ends. This paper therefore explores how two of the most innovative thinkers of new governance, on the one hand, and neoliberal governance, on the other, themselves understand key conceptual distinctions between their normative projects. Specifically, it traces the ways in which Charles Sabel and Friedrich Hayek hold disparate conceptions of three interrelated ideas: the individual’s capacity for reason, the relation between small-scale organizations and the overall order of society, and the possibilities of making bottom-up rules of law. Given these distinctions, the paper offers a picture of new governance often missing from contemporary scholarship. Analysts widely distinguish new governance from liberal legalism—for example, they describe new governance as a rejection of the kind of centralized regulation favored by liberal advocates of the New Deal state, and as an embrace of informal, flexible, lay, and even extralegal problem solving. This paper, however, explores new governance as an effort to formalize and rationalize Hayekian models of flexible organization. It suggests that studying the discontinuities between new governance and neoliberalism—and the continuities between new governance and liberal legalism—may help clarify ongoing questions about new governance’s view of law as a tool of distribution and social change.

3 Expanding Public Norms to Private Contractors: Comparative Analysis Avishai Benish, David Levi- Faur Hebrew University of Jerusalem

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ABSTRACT In recent years, many countries have dramatically transformed their public administration. Inspired by new governance ideas, states moved to market-oriented arrangements and increased their reliance on private actors in order to administer public services and functions. While some scholars argue that this privatized model of public administration leads to the erosion of public norms, others identified the potential for expansion of public norms to private spheres. This paper explores the extent to which public service norms -- such as transparency, fairness, equal treatment, impartiality, responsiveness, and integrity -- are expanded to private contractors in the context of welfare-to-work schemes in United Kingdom, Australia, Wisconsin and Israel. We find that bureaucratic legislation plays a major role in expanding public service norms to the private actors operating the programs, but that the extension of the norms sometimes lacks clarity and consistency. A coherent theory beyond this expansion is yet to emerge.

4 Risk, Regulation and Financial Crisis: Comparing National Responses in Financial Regulation Martin Lodge, Kai Wegrich Ohio State University

ABSTRACT The regulation of financial markets has not just become one of the most pertinent issues in contemporary public policy discussion, it is also at the heart of any debate regarding the appropriate level of intervention in markets. In this paper, we use a new methodology derived from grid-group cultural theory to assess to what extent three countries' responses to the financial crisis are shaped by competing worldviews.

It does so by looking at media coverage in the United States, the United Kingdom and Germany. This paper progresses in three steps. First, it sets out the thesis that regulatory reform represents national policy styles, second, it develops the methodological angle to assess these claims and third, based on a new database consisting of argumentative claims, it considers to what extent national argumentation regarding financial regulation is shaped by different biases in argumentation and to what extent the ongoing crisis has led to a transformation in dominant argumentation patterns over time.

Panel 3A Dealing with Stakeholders

1 Corporate Governance and Regulatory Failure. Irene Lynch Fannon University College Cork

ABSTRACT Using the financial crisis as context the paper will ask whether regulation failed to deliver corporate governance in the context of the banking sector, and if so what interest do we have in ensuring that regulation will deliver good governance in the future. Whether it is possible for regulation to deliver

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good governance on its own and whether other factors are important. The paper will ask some questions about these ‘other factors’ shareholder activism, stakeholder representation, non legally binding norms inter alia. Another question I would like to consider is how we measure good governance, how we have measured it in the past and why these questions are both important and largely unanswered despite many years of thinking about good corporate governance in recent times.

2 Inquiring for Truth and the Re-engineering of the Corporate Contract Justin O' Brien University of New South Wales

ABSTRACT The British Prime Minister, Gordon Brown, has called for a global re-negotiation of a social contract between investment banking and wider society. Given the scale of the losses how borne by the taxpayer as a consequence of the Global Financial Crisis in jurisdictions as diverse as Iceland, the United Kingdom, Ireland and the United States, the proposal has undoubted rhetorical strength. It is also exceptionally difficult to render operational, not least because of (purposive) ambiguity over what constitutes and who should decide terms of reference. Moreover, piecemeal change may have enormous if unintended consequences for the conceptual underpinning of corporate law and the resulting regulatory framework. At a national level one mechanism proposed to address this issue is through the establishment of a ‘truth commission,’ an option chosen by Iceland. A second option is to convene an independent Royal Commission, a mechanism used throughout the Commonwealth, or an independent tribunal of inquiry, as used with increased frequency in the Republic of Ireland throughout the 1990s. A third option is to convene a bi-partisan commission, as deployed in the United States. Each option is exceptionally problematic within a domestic context, not least because of contention over terms of reference, remit and degree to which the findings remain voluntary or translate into policy changes. The difficulties are compounded when applied to multi-faceted problems such as the Global Financial Crisis. This article examines whether and if so how independent commissions can provide a mechanism to re-negotiate the corporate contract in a manner that ensures the internal coherence of corporate law and is capable of external validation and replication, critical factors for the maintenance of legitimacy.

3 Directors Duties in a Changing World Blanaid Clarke University College Dublin

ABSTRACT In the wake of the £11.7 billion acquisition by Kraft of Cadbury in the UK and the ensuing job losses, the debate on the role of directors and the potential conflict of interest between various stakeholders has gained renewed momentum. The common law duty of directors is to act in the interests of the company. Notwithstanding the statutory reformulation of this duty in the UK, this duty has been interpreted in common law jurisdictions as acting in the interests of shareholders. What the Cadbury takeover illustrates in stark fashion is that the changing nature of the markets means that the type of shareholders that directors responding to a bid are required to consider may be different from the type of shareholders in a company which is not under siege. The latter can appreciate more readily the benefits of an enlightened shareholder value approach where the interests of shareholders can be advanced only where consideration is also given to the interests of non-shareholders. It is a fact however that the announcement of a takeover is marked with a frenzy of market activity. In the case of Cadbury, long term investors sought to capitalise on the takeover premium by selling shares which were then bought by short term hedge funds. Acting in the interests of these shareholders clearly pointed towards a recommendation of the bid. As the

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Chairman of Cadbury Roger Carr explained “Individuals controlling shares which they had owned for only a few days or weeks determined the destiny of a company that had been built over almost 200 years.” Substantial costs were incurred by non-shareholder stakeholders. Consequently, Lord Mandelson, the UK Secretary of State for Business, Innovation and Skills suggested the need to consider how directors can be equipped to be “stewards rather than just auctioneers.” This paper explores the necessity and viability of imposing such a responsibility in the current economic and regulatory climate.

4 Consultation and Legitimacy in Transnational Standard-Setting Caroline Bradley University of Miami

ABSTRACT The recent financial crisis has generated agreement on the need for new transnational standards for financial regulation. When governments work together to develop transnational standards and rules they do so using processes which are not uniform, which often seem to develop in an ad hoc manner, and which do not necessarily reflect any particular conception of good government. Transnational standard setters have responded to critiques of the legitimacy of their role by emphasizing consultation of stakeholders. The article will compare the uses of consultation in the development of policy at the national and supranational levels. It will examine the weaknesses in the construction of transnational consultations which undermine their value as mechanisms of legitimation. For example, transnational consultations lack visibility, they are usually carried out in a limited number of languages, or even only in English. More fundamentally, the article will critique the stakeholder focus of transnational consultations. In practice the identification of stakeholders who are potential respondents to consultations seems to imply that there may be others (non- stakeholders) whose views are less important. As the financial crisis has shown, it is not only those who consider themselves to be stakeholders in financial regulation who are affected by its failures.

Panel 3B Regulating Converging Technologies: Developing a Normative Framework

1 Singularity, Plurality, and Precaution: The Range of Regulatory Responsibility Roger Brownsword King's College London

ABSTRACT Even if we doubt the Kurzweilian prediction of a rapid transition to Singularity (when humans transcend the limitations of their biology, when there is no distinction between humans and machines, when physical and virtual realities merge), there is no denying an acceleration and convergence of modern info, bio, and nano technologies. However, these are changes that are taking place against a backcloth of cultural plurality, where there are many different views as to the

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risks and benefits of various kinds of technological convergence as well as the acceptability of such developments. Given such a plurality, what should we expect of regulators? If our expectation is that they should construct the right kind of regulatory environment for converging technologies, particularly an environment that confines risk to an “acceptable” level, what does this signify? In this paper, I will argue that, if our expectations of regulators centre on the idea of “acceptable risk”, then we need to identify a range of interests (prudential and moral) relative to which risk is to be judged. Moreover, I will argue that, within the range of regulatory responsibility, there is a significant place for precautionary reasoning as well as for stewardship.

2 Converging technologies, diverging contexts: challenges for legal protection Bert-Jaap Koops Tilburg Institute for Law, Technology and Society

ABSTRACT The expected converging of nano-, information, bio-, and cognitive (NBIC) technologies implies that all technologies can process information. ICT will be a crucial component of all future technologies, including those that deal with things around us, things within us, and the things that are us. The exponential growth in data processing of the past decades is likely to continue in the future, resulting in exabytes of data being created, processed, and stored. Even more than today, the NBIC era will be a database era, in which databases are likely to be distributed in many overlapping ‘clouds’. This aspect of NBIC poses significant challenges to legal protection. Currently, individuals are protected in specific areas of law, depending on whether they act in specific contexts of their concrete roles as citizen, employee, consumer, or patient. The challenge for legal protection is to find ways to empower persons to develop themselves and to construct their identities in a technology-mediated world that obfuscates the audiences for which they play their different roles. Already today, we see shifting power relations by the use of context-poor digital personae and the creation of panoptic monitoring architectures. This results in vulnerabilities of increased risks of errors in interpretation, as well as a normalizing, self-disciplining effect of the panoptic architectures on persons’ behaviour and identity construction. These trends and vulnerabilities are related to myriads of personal data being stored and processed in diverse power relations, and exchanged across contexts. With the rise of NBIC, these problems are only going to grow in significance. Can the one area of law that we know to provide the kind of context-crossing legal protection – data protection – address the challenge of legal protection in an age of converging technologies in diverging contexts?

3 The Politics of Precaution: Examining EU Regulation of Human Material Anne-Maree Farrell University of Manchester

ABSTRACT This paper examines the development of transnational regulatory regimes involving human material in the European Union (EU) over the past ten years. It is argued that the political context has informed the way in which risks in relation to various types of human material have come to be defined as policy problems at EU level, as well as how ethical and innovation concerns have been accommodated in the design and adoption of regulatory regimes. It is further argued that this political context has resulted in a significant level of disconnection in risk governance in the area. This has happened in two ways. First, there has been a growing level of disconnection between institutional and stakeholder demands for a more expansive approach to risk governance in the area and the narrowly-circumscribed treaty competence which permits the adoption of risk regulation regimes that set minimum standards of quality and safety in relation to blood, tissue/cells and

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organs. Second, it has led to the development of institutional arrangements that promote a bifurcated approach to risk governance based on innovation in the use of specific human material such as blood and tissue/cells. Although a hybrid of traditional and new governance mechanisms have been employed to address this problem of disconnection, this has nevertheless added a further layer to already complex institutional arrangements for risk governance in the area. It is suggested that a more integrated approach to EU risk governance in relation to human material is required. Implementing such an approach would contribute to greater clarity, transparency and accountability in decision-making processes which could enhance public trust and political legitimacy in what is a politically-sensitive area of EU governance.

4 Is techno-regulation morally illegitimate? Karen Yeung King's College London

ABSTRACT Since ancient times social planners have used architecture and design as a means for discouraging particular behaviours, such as the filling in of burial shafts within Egyptian pyramids to prevent would-be looters from accessing the treasures locked within. More recently, scholarly interest in the use of design as a regulatory instrument to shape social behaviour has been invigorated in debates about the virtues and vices of employing software “code” to regulate behaviour in cyberspace, popularised by Lawrence Lessig’s best-selling book Code and Other Laws of Cyberspace. For policy- makers, one of the greatest attractions of design as a regulatory instrument is its dual potential to achieve its behavioural objectives with 100% effectiveness, and in circumstances where design is self-enforcing so that human intermediation is not required to secure compliance with the requisite standards. So, for example, a system of passwords can be readily employed to restrict access to designated web content without the need for a human “security guard” to monitor access. Yet scholars have expressed concerns about the ways in which design-based instruments may threaten a range of non-instrumental values, including its potential to jeopardise principles of democratic governance such as transparency, participation and accountability.

In an important paper, Roger Brownsword has raised objections of a more fundamental kind to an ideal-type of design-based regulation which he terms “techno-regulation” (‘Code, Control and Choice: Why East is East and West is West’ (2005) 25 Legal Studies 1-21), objections which he elaborates further in Rights, Regulation, and the Technological Revolution (OUP, 2008). Although design-based regulatory instruments may take a variety of forms, what makes techno-regulation distinctive is that it is designed so that regulatees have no choice but to act in accordance with the desired regulatory pattern. Brownsword warns that, because techno-regulation is “amoral”, denying regulatees the opportunity to choose between doing right or doing wrong, regulatees are no longer moral agents. Techno-regulation simply leaves no room for judgments of moral responsibility, which Brownsword fears undermines the foundational conditions required for the existence and flourishing of a moral community. Yet he is reluctant to condemn techno-regulation outright, implicitly acknowledging that the safety and security which techno-regulation offers are not lightly to be dismissed. The primary purpose of this paper is to explore these ethical objections, seeking to identify whether there are certain conditions in which techno-regulation should be welcomed, despite its potential to erode moral agency, from circumstances in which it should strenuously be avoided, or at least employed with extreme caution.

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Panel 3C Re-Inventing Climate Change Regulation and the Challenge of Climate Justice

1 Rescaling climate justice: sub-national issues and innovations for low carbon futures Anna Davies Trinity College Dublin

ABSTRACT Climate justice is emerging as a discourse for mobilising activism around the globe. The language of justice is less explicit as a policy principle despite long standing attention to negotiating responsibilities for causing climate changes and bearing costs related to reducing climate change emissions. Nevertheless there are significant justice issues in terms of how mitigation and adaptation will have differential impacts for people in different places. Even where responsibility and equity negotiations have taken place they have tended to occur at the nation state scale through global institutions and events. However, justice implications of climate change are much more geographically variegated. This paper will examine the arena of sub-national climate justice issues and actions specifically highlighting the range of sub-national innovations that seek just transitions to low carbon futures. It will examine the regulatory conditions for supporting such initiatives and relate these findings to the current Irish rhetorical commitment to a green economy.

2 Regulating Climate Change: Power, Politics and Climate Justice after Copenhagen Suzanne Kingston University College Dublin

ABSTRACT Notwithstanding the gravity and urgency of the issue, the international community has consistently failed to come up with an effective regulatory regime to address climate change. This paper analyses the principal reasons for the failure to agree a meaningful deal at COP 15 in Copenhagen, and considers the potential for overcoming these issues in future negotiations. It begins by asking whether the nature of the environmental problem at stake has led to this regulatory failure, using comparisons with international agreements in other areas of environmental policy. Second, it considers the role of ideological tensions between those advocating market- or efficiency-based regulatory models as a solution, and those who reject market-based instruments as ineffective, unethical and unjust. Third, it analyses the role of institutions and the present UNFCCC framework for climate change negotiations. Finally, it examines the importance of broader, non-environmental considerations of political economy, and places the Copenhagen negotiations within the context of the shifting balance of global power. It concludes by considering the potential utility of the emerging concept of climate justice in addressing these broader concerns.

3 Negotiating the environment: ‘Offsetting’ mitigation and justice Jane Holder University College London

ABSTRACT In this paper I represent and critically analyse the processes by which the proposed mitigation of environmental harm through various ‘offsetting’ mechanisms influences the outcomes of decision

Page | 43 making. In particular I address the following questions: • To what extent is the bargaining/negotiating process surrounding offsetting carbon emissions guided by principle, formal rules and guidance, or is it an ad hoc response on the part of planners to developers’ offers to mitigate environmental harm? • What functions are performed by the negotiating process relating to offsetting - lightening the regulatory load? Clarifying and tightening up offers of mitigation? Allowing planners to draw ‘more’ mitigation from developers? • What is the nature of the legal outcomes concerned with offsetting and to what extent do conditions attached to grants of planning permission reflect accurately the bargains achieved? • To what extent is the process of offsetting mitigation conducted behind closed doors? How do parties get involved and what roles do they perform? • How should we judge offsetting in regulatory terms, and from the perspective of advancing environmental justice? Such questions are primarily concerned with the adequacy of existing regulatory mechanisms designed to influence decision making, such as environmental assessment, in the face of more frequent offers of ‘offsetting’ from developers, and in the light of doubts about the efficacy of this as a means of addressing climate change in any meaningful and just way. In particular, I trace a regulatory shift in offsetting practice from an individualised response to consumption (self-regulation or reflexive style regulation) to a more institutionalised setting, in which development may be rendered acceptable through officially sanctioned offsetting bargains forming part of traditional licenses. In this context, I draw upon theories of collaborative governance, considering the extent to which this provides a good case study to explore this in practice, given the involvement of private sector/third sector parties in such negotiations. Significant environmental justice issues are raised by offsetting mitigation, not least who is party to the decisions, and who is affected by the sometimes adverse environmental effects of offsetting experiments. An important aim of the paper is to comment on the extent to which such considerations form any part of the processes of negotiation.

Panel 3D The Influence of Politics on Regulatory Structures

1 Between isolation and interference: the institutional development of the European Medicines Agency and the European Food Safety Authority in comparative perspective Martijn Groenleer Delft University

ABSTRACT Most of the time, the operations of agencies (certainly those at the European level) go unnoticed by the public. This is different for the European Medicines agency (EMEA) and the European Food Safety Authority (EFSA). They regulate politically sensitive and emotionally-laden issues such as pharmaceuticals and food safety, which not only involve enormous economic interests but also concern the public health of millions of EU citizens. Both the EMEA and EFSA have been granted considerable regulatory powers. When compared to other European Union (EU) agencies, they both display a relatively high level of formal autonomy

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from political actors. Despite these similar features, both agencies are characterised by different dynamics with regard to their development. The EMEA increased its autonomy in practice, whereas EFSA experienced difficulty in realizing even its formal autonomy. This paper provides an account of the creation and early development of these two agencies from an institutional perspective. It explores the mechanisms affecting their development over time and the conditions under which these mechanisms operate. Key to the EMEA’s autonomy, somewhat paradoxically perhaps, has been the cooperative relations with the member states and their medicines authorities. Apart from delivering high quality opinions in a short time span and thereby speeding up the assessment process for medicines as well as enhancing public health, it seems that positioning itself as a network agency rather than emphasising its autonomous position vis-à-vis other actors, has in fact been crucial for the EMEA’s increased autonomy. Ironically, EFSA’s autonomy seems to have been impinged upon by political actors for the very fact that the agency put a lot of emphasis on its formally autonomous status in the early years. Although this was to some extent necessary in view of building up a distinct character, it sometimes meant that the agency was isolating itself from its institutional environment rather than generating acceptance as an actor in its own right. This actually appears to have made politicians interfere in the ‘scientific’ activities of EFSA, notably when it concerned contested issues such as genetically modified food.

2 Linking the levels: independence and influence in the European twotiered network of food safety agencies Alex Kobusch University of Tuebingen

ABSTRACT Some major food crises in the 1980s and 1990s rendered the need for a coherent European regulatory system in the sector of food safety apparent. Especially the BSE ‐crises stipulated comprehensive reforms of the legal framework, attribution of competencies, and organisation of regulatory regimes. As part of the process, both on the European and the national level more or less independent agencies have developed which are supposed to deliver independent, transparent, and excellent scientific expertise to decision makers. Thus a “two‐tiered European regulatory system” (Eberlein/Grande) has emerged which can nevertheless be characterised as fragmented. In spite of extensive legal and institutional reforms and some observable tendencies towards an institutional convergence, differing institutional solutions have been chosen on both levels which in the end still produce differing scientific advice. These concerns are addressed by Regulation (EC) 178/2002, which establishes a common European Food Law and sets up the European Food Safety Authority (EFSA). Article 30 explicitly mandates EFSA to anticipate diverging scientific opinions without granting EFSA a final say in these cases. The agency itself considers the building of a network with and among the Competent National Authorities (CAs) by 2011 and the development of a harmonized risk assessment standard by 2016as major steps towards providing a coherent European expertise and thus a smoothly functioningregulatory system. The focus of the research paper is twofold. Firstly, the paper aims at exploring the shape of the network between EFSA and the CAs. I propose a connection between the concept of (in)formal independence of agencies (Gilardi; Maggetti; Wonka/Rittberger) and their position measured by their centrality and betweeness within the network. Thus the national institutional choice is linked to the European arena. It is assumed that EFSA is not likely to be the single central player in the network, but a structure of multiple cliques with EFSA as one of several brokers will develop. Secondly network governance features as main theme in the envisaged development of harmonized risk assessment standards. I assume the actions and potential influence of the single actors to be dependent on their position in the network. Consequently the form of the network and EFSA’s

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potential to govern the network should have implications on the standards developed by the network.

3 National agencification and Europeanization of regulatory practice – the case of maritime safety Christopher Gulbrandsen University of Oslo

ABSTRACT Over the course of the last 50 years international maritime safety regulations have grown considerably in number and scope. After initial inaction, the European Union entered the stage almost 20 years ago, and has since become an important player in the field. Because of the already highly institutionalized global setting, the maritime safety field provides a good case for comparing how different types of international organizations interact with national government. During the same time-frame reforms of the public sector under the collective label of “New public management” have proliferated. One such type of reforms have aimed at decentralization within central governments. In this paper, I will build on theories of regulatory governance and implementation and utilize the concepts of indirect and direct implementation of international rules to show how a (progressively) autonomized Norwegian government agency in the maritime field relates to international organizations and consequently how decentralization reforms may interact with Europeanization. Is the EU taking on a role in implementation beyond what international organizations usually do, and if so, is this helped or hindered by national agencification?

4 Europeanization of the Competition Agency. A study of the Competition Agency’s participation in transnational networks Per Lægreid and Olle C. Stenby University of Bergen, Norway

ABSTRACT Abstract unavailable currently

Panel 3E Transnational Regulatory Networks

1 Learning in transnational networks about regulatory impact assessment: Benchmarking or extrapolation? Claudio Radaelli University of Exeter

ABSTRACT Although regulatory impact assessment (RIA) has been adopted by most OECD countries, implementation of this regulatory innovation has been uneven. Transnational and cross-national activity has been intense, with ad-hoc structures set by the OECD and the European Commission to facilitate learning. Yet this activity has not generated a common pattern of usage of RIA in OECD countries. This may have to do with basic flaws in RIA as policy instrument, domestic resistance to implementation, and thin emulative strategies. This paper tackles a specific topic that is prominent in our panel: the design of learning architectures in transnational networks. Do these architectures

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facilitate or hinder learning, depending on how they are designed? After having examined the existing architectures, we discuss their limitations and propose a different framework for the analysis of learning, drawing on extrapolation models, originally inspired by Eugene Bardach and developed by Michael Barzelay. Extrapolation can be used as social scientific tool and as design- oriented tool (that is, a tool used by policy-makers willing to draw lessons). Focusing on the former, we introduce the main concepts and logic of extrapolation, and apply it to RIA, explaining how different types of mechanisms (individual, relational, and environmental) can be inferred, drawing on the evidence offered by the source cases. Next we illustrate how the mechanisms can be related to the target case, and discuss how to concatenate mechanisms and face some obvious trade-offs. Empirically, the paper draws on an extrapolation analysis carried out for the Dutch government, based on the experience of Canada, Germany, the European Commission, the UK and the USA. In the conclusions we reflect both on the findings and also, reflexively, on the role of social scientists in extrapolation exercises.

2 Power, Interdependence, and inequality in Transgovernmental Politics: A network analytic approach to cooperation among securities commissions Abraham Newham Georgetown University

ABSTRACT Scholars of political economy have long noted the importance of domestic officials in resolving global governance challenges. According to proponents, such transgovernmental actors offer fast and flexible mechanisms to coordinate collective action and minimize interdependence frictions. Research has demonstrated the contribution of these actors in an ever growing number of sections including air transport, banking, competition, data privacy, energy, and pharmaceuticals. Despite the growing body of literature that identities how such networks of domestic actors matter for global governance, little research examines the politics and inequalities within the networks themselves that might drive their content and influence. In this paper, therefore, we use a network analytic approach to examine the ties formed by memoranda of understanding among securities commissions between 1982 and 2006. We demonstrate how these connections contribute to power differentials among participants and explore the factors contributing to this inequality. The findings suggest that transgovernmental networks are not only coordination mechanisms but are also a site of contestation and political conflict. Additionally, the paper demonstrates the growing application of network analytic approaches to international relations phenomenon more generally.

3 Assessing the World Bank’s influence on the worldwide diffusion of good governance norms: a bibliographic data analysis Gaoussou Diarra Universite d'Auvergne

ABSTRACT The World Bank appears as an important producer and bench scientist of norms in the area of economic development. In this connection, The Bank keeps up an endogenous influence relationship with various kinds of outside actors. Then, in this paper, we are interested by the worldwide diffusion of the norms of governance which starting point is attributed to the World Bank according to a large part of the literature on this topic. In order to elucidate this global shift towards the good governance paradigm, the purpose of this paper is to assess the diffusion’s channels and strategies used by the Bank to make operational the good governance approach. Thanks to some revolution in bibliographic data, this evaluation examines in quantitative and qualitative ways three aspects of the soft power in the governance paradigm diffusion. The first one is related to the dynamic of the relative weight of the governance topic among all the scientific subjects concerned by the Bank

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policy and research agenda. The second aspect deals with the dynamic of the relative importance of the Bank research and publication on the governance topic among worldwide publications on the same topic. Finally, the third aspects of the assessment is interested by the most influential authors on governance topic within and outside the Bank, the most influential journals and publishing supports receiving governance subjects, and we also examine the most collaborating Institutions with which the bank staff use to publish.

Panel 3F Private Food Governance: Problems of Legitimacy, Accountability and Effectiveness

1 GLOBALGAP and the Management of Legitimacy Donal Casey University College Dublin

ABSTRACT There are two main theoretical approaches which may be taken to studying the legitimacy of sites of non-state governance. Firstly, the normative prescriptive approach ascribes principled ‘standards and criteria’ which must be met by a site of non-state governance to be afforded the ‘predicate legitimate’ (Steffeck, 2003; Bernstein, 2004). By contrast, the descriptive approach aims to identify whether a site of governance is perceived as legitimate and the reasons which underlie such perceptions. Thus, the descriptive approach to legitimacy elucidates and allows for situations where different legitimacy communities grant legitimacy to a site of governance for different reasons. For example, Cashore et al outline three broad types of legitimacy which may be granted to a non-state market-driven governance system (Cashore, 2002). These are pragmatic legitimacy, moral legitimacy and cognitive legitimacy. Such an environment may lead to a ‘legitimacy dilemma’ for the site of governance – ‘what they need to do to be accepted by one part of their environment is contrary to how they need to respond to another (Black, 2007).’ Within such a setting of contestation, a site of authority will have to make a strategic decision as to how it responds to the competing and incompatible legitimacy claims made by the legitimacy communities. As Black notes, ‘[t]here has been very little sustained research on how non-state regulators respond to competing accountability and legitimacy claims (Black, 2007). This paper takes the first preliminary steps in analysing how GLOBALGAP, a retailer-led private sector body which sets Good Agricultural Practice (G.A.P.) standards for agricultural products, has managed the legitimacy.

2 The legitimacy of private transnational regulation, The Case of Private Food Governance Jan Wouters, Nicolas Hachez Universiteit Leuven

ABSTRACT As a result of market globalization, food products often travel extensively around the world before

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reaching our plates. This raises numerous issues regarding the best way to regulate, at international level, food products, notably in regard to their free trading, their quality and safety, the environmental and social impact of their production, etc. Traditional international rules and institutions (such as the WTO SPS Agreement, the Codex Alimentarius Commission, the Food and Agriculture Organization) were assigned the task with more or less success. In the last decade, private schemes of transnational regulation have however increasingly gained prevalence in the food governance field, notably as a result of repeated food crises partly resulting from failures in public international food regulation. This emergence raises a wealth of questions, notably in relation to the legitimacy of private food regulations. This issue is very important as the legitimacy of regulations (either public or private) is regarded as a fundamental element of their authority and effectiveness, that is, of their ability to appropriately govern a subject-matter. Yet the determinants of legitimacy in global governance are still insufficiently understood, despite numerous attempts at clarifying the notion. In this paper, we intend to add to this clarification effort in the context of private global food governance. We shall root our reflection on legitimacy in the democratic tradition, and will intend to present a conception of democratic legitimacy in global governance understood as a function of participation of, and accountability to, the relevant 'public' in the exercise of global regulatory functions. In carrying out this analysis, we will attempt to confront our theoretical hypotheses with real-life instances of private food governance (such as the numerous private food safety or quality standards).

3 The Effectiveness of Food Retail Governance for Sustainability Agni Kalfaggiani University of Stuttgart

ABSTRACT Global food and agriculture governance faces tremendous challenges at the dawn of the new millennium. Environmental concerns, in particular, such as generation of waste, water pollution, energy inefficiencies, pesticide use and decline of biodiversity, are considered the new agrarian questions of this century. Crucially, the governance of such environmental strains is a rapidly emerging issue for retailers who have become one of the key players in agrifood governance. Retail environmental governance takes place in three distinct ways: adoption of (a) good agricultural practices and/or promotion of organic products, (b) good manufacturing practices, and (c) energy efficiency initiatives.

This paper aims to evaluate the effectiveness of retail governance in addressing the environmental challenges facing the global food system, today. Effectiveness is a crucial criterion for the legitimacy of private forms of governance as it is frequently identified as their claim to legitimacy. Rather than drawing authority from democratic elections and formal office, legitimacy claims of private rule setting tend to derive from the notion that it can provide certain governance functions more effectively and efficiently than elected public actors. Yet, few studies have tried to understand the actual impact of private rule-making, in general, and retail governance, in particular, in detail. This paper aims to fill in this gap and improve our knowledge and understanding about the nature and implications of private (food retail) governance for sustainability.

4 Actors and regulatory roles in private and mixed forms of food regulation Tetty Havinga Radboud University Nijmegen

ABSTRACT In food regulation, as in other domains of regulation, the traditional command-and-control regulation by the state has been criticized for being ineffective, inflexible and neglecting the

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responsibilities of citizens and organizations. Transnational and national governments as well as the food industry, retailers and NGO’s initiated new ways to deal with food regulation. Many of these new forms of regulation are characterised by a mix of public and private organisations involved in rule-making, implementation, monitoring compliance, and enforcement. In this paper I want to explore which actors are involved in private and mixed forms of food regulation. This question is important for problems of effectiveness, legitimacy and accountability of regulatory regimes. I argue that a dichotomous distinction between public (governmental) and private (non-governmental) regulation is not an adequate conceptualisation for analysing the reconfiguration of relationships between actors involved in food regulation. We need more sophisticated distinctions linking the type of actor to the role they play in the regulatory process. I unravel the regulatory process into nine regulatory roles to analyse complex patterns of actor involvement in a regulatory regime.

Panel 3G Regulating Argentina

1 Income Distribution and Taxation: the Current Situation in Latin America Leonardo Grottola, Maria Leticia Patrucchi University of Buenos Aires

ABSTRACT During this decade, most Latin American countries underwent State intervention rebuilding capacity processes after neo-liberal reform in the nineties. Those processes face the difficulties linked to the obtaining of fiscal resources in underdevelopment contexts. In fact, lack of capacities conditions their building, a true “capacity trap”.

This time we focus on the primary source of fiscal resources: tax revenue. The analysis of their volume and structure is fundamental to understand how capacity rebuilding is supported. In the region, tax pressure has grown but still presents low levels compared to developed countries, with the exception of Argentina and Brasil –around 30 % GDP. Moreover, tax structure in the region is still regressive.

In the case of Latin America, characterized by strong contrasts in social and regional income distribution, this research is crucial since, according to Przeworski, the greater income distribution inequality is, greater are the difficulties to reach progressive tax systems.

In that framework is included this article, which proposes to study the current tax revenue structure in 18 Latin American countries. First, we proceed to a detailed scrutiny of those tax systems (including natural resources – related revenues that cannot be properly labelled as taxes), examining each tax’s share in total revenue, in order to establish how the tax burden is distributed among social sectors. Secondly, we compare Latin American tax structures with European ones. Finally, we test Przeworski’s hypothesis on the relation between inequality and regressiveness.

2 Producer and regulator? A new challenge for Argentine State (2003-2009). Andrea Makon, Mariela Rocca National University of San Martin

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ABSTRACT Since 2003 Argentine State has taken some privatized companies over. These nationalizations not only show a higher intervention but also the failure of nineties’ regulatory scheme. Given this new situation, we wonder if the State can simultaneously perform as producer and regulator. Can these two possibly conflicting roles be managed? How is regulation carried out? What works, and what doesn’t? To answer these questions, the first section of the paper studies two new companies: Energía Argentina Sociedad Anónima (ENARSA) and Agua y Saneamientos Argentinos Sociedad Anónima (AySA). While the first one is a recently created energy firm, the second one is a nationalized public utility, the drinking water and sanitation service. In both cases, conditions that determined their setting up, their characteristics and performances are carefully examined.

In the second section, regulation of the two companies is assessed considering both design and effectiveness. A quick look at implemented regulatory policies shows that, instead of establishing different regulatory rules, there is a readjustment of the old control structure.

This paper presents empirical evidence about how State regulation works in Argentina. Additionally, it is aimed at building conceptual tools to study regulation of re-nationalized public utilities.

3 Institutional Transformation and Business Strategies: Privatized Utilities in Contexts of Economic and Political Instability. Valeria Serafinoff National University of San Martin

ABSTRACT This paper studies the role of utility regulatory agencies in contexts of strong political and economic instability. It focuses on the concession of roads construction and/or maintenance in Argentina from 1989 till 2008, comparing two different models of contracts signed during those years. The first model was adopted in the wake of neoliberal reforms; the second one, from 2003 onwards, following the advent of a government that proposed to revert the reforms carried out in the 1990s. The paper analyzes the role of the political actors involved in the process of renegotiating the regulatory rules established in the original concessions. Furthermore, it examines the strategies followed by powerful interest groups and their veto capacity.

4 Intergovernmental Coordination for Environmental Regulation in Argentina Maximiliano Rey University of Buenos Aires

ABSTRACT The reform of the National Constitution made in 1994 awarded to the provinces, "the original ownership of natural resources within its territory" (art. 124). To this add specific expertise to the nation and the provinces in the articles on the environment chapter on new rights and guarantees: "The Nation promulgates rules containing the minimum protection, and the provinces those necessary to reinforce, without altering those local jurisdictions "(Art.41).

From this provision, the Congress passed a series of laws establishing the minimum budget for a set of environmental matters, which include various types of state regulation over her use of resources or materials that might affect it, and also regulate the distribution of tasks between nation and provinces.

This allocation of jurisdictional authority to different stakeholders, for the federal system and the

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virtues that this allows, in return has the potential generation of failures of coordination between these actors courts, responsible each for different tasks that together make a federal state capacity regulating the use of resources.

The aim of this presentation is the analysis of the results that the implementation of environmental legislation enacted since 1994 to date occurred on the environment, identifying coordination problems leading to and joint actions have been performed, so empirically assess the regulatory capacity of the Argentine State (as multilevel governance) on the environment

Panel 3H Certification and Regulation

1 The Potential and Limits of Forest Certification as a Global Environmental Governance Tool. The case of the Forest Stewardship Council. Axel Marx, Dieter Cuypers University of Leuven/ Antwerp Management School, Flanders Institute of Technology

ABSTRACT In recent years one can observe the emergence and proliferation of new governance mechanisms which aim to manage forests sustainably. One of these new mechanisms, which has received increasing attention in the literature is certification by non-state actors. Certification implies that forests or timber products meet specified standards. In the context of timber and forest certification several certification initiatives have emerged of which the Forest Stewardship Council (FSC) is the leading initiative. This type of non-state market regulation of forests is by some authors regarded as ‘one of the most innovative and startling institutional designs of the past 50 years’ (Cashore et. al.) and one of the key mechanisms for global forest governance. Little empirical research has been conducted on the impact of certification. The paper aims to make a contribution to this effort and focus on the FSC as a specific case study. It will use data on FSC-certified forest surface area from nearly 1.000 forests worldwide and combine this with data from the FAO (forest coverage data) and development indicators in order to assess the potential and limits of forest certification as a governance tool. The paper will argue that forest certification has significant potential but that it is also limited due to a ‘stuck at the bottom’ problem which will be elaborated. Implications for research and policy-making will be discussed.

2 From Transnational Environmental Standards to Local Practices: Implementation of Forest Certification Standards in the Russian Forest Sector Olga Malets Technische University

ABSTRACT The paper examines the implementation of transnational environmental standards developed and propagated by transnational NGOs seeking to regulate environmental behavior of firms. Building on

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the extensive qualitative study of the implementation of forest certification standards in the Russian forest sector, I identify social processes and mechanisms that connect transnational standards designed by global actors with local practices. Transnational NGOs increasingly use certification as an instrument to regulate environmental practices of firms in many industries worldwide. Certification is a procedure by which independent organizations assess company practices against a specific standard and give written assurance that practices conform to the standard. By alarming individual and corporate consumers, NGOs create demand for goods produced in a responsible way and offer systems of certification of firms based on broad standards applicable across companies and countries. Companies that want to be certified have to improve their practices in order to meet certification requirements. Broad transnational standards rarely can be directly implemented in local contexts. They have to be adapted to local conditions and accepted by local companies usually interested in minimizing the extent of change in their practices. I show how global actors, local actors and intermediaries who navigate between the global and the local negotiate localized requirements in formal settings, including official meetings and conferences, and thereby build a political consensus and develop global-local knowledge. In addition, they negotiate in implementation settings where they experiment with transnational standards on the ground. Implementing actors and intermediaries accumulate experience and transfer it to formal negotiations and other implementation settings. From this perspective, certification often presented as an arena for conflicts and power struggles also appears to be a site for learning and experimentation. On-the-ground practices and locally applicable requirements (on paper) are not loan translations of transnational standards. They emerge as combinations of global models and local practices through (1) the translation of global norms into local language and local practices into the language of transnational standards, (2) transplantation of foreign practices into local soil, (3) invention of new practices and (4) bricolage, i.e. a combination of external and local elements.

3 Legitimacy and effectiveness of codes, certification and accreditation as instruments of regulatory governance Meike Bokhurst Netherlands Court of Audit and Tilburg University

ABSTRACT Codes, certification and accreditation originally are private forms of regulation to draw up, share and maintain collective normative standards within a sector or professional group and to give people justified trust in the quality of different products, processes, systems, etc. Since governments have recognized the limited possibilities of law they are looking for alternative forms of regulation. Governments try to stimulate governance by non-governmental actors and want to share public responsibilities with civil and private organizations. Codes, certification and accreditation are examples of popular tools of governments to stimulate self- and co-regulation and to improve the quality of public services.

But codes, certification and accreditation do not only offer chances for serving public values, but bear risks too. Most codes have a strong normative profile. It is not always clear how those norms can and will be realized. Some codes do not go beyond the symbolic level. A lack of will, competence or agreement may be the cause. It is also possible that the code was set up only for the sake of appearances or to prevent government from lawmaking. The attention to the normative site of the code can be so high that the compliance site is a little bit neglected by the participants. In practice many codes face a lack of knowledge about the state of compliance and when it is measured a compliance deficit might be discovered. Some certification and accreditation agencies have to cope with a compliance gap too. Certification can make the level of public services more transparent and comparable, but can also cover problems like regulatory capture and fraud when governments trust certificated organizations to much.

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In this paper the following questions will be answered:

-What’s known about the effectiveness and legitimacy of codes, certification and accreditation as instruments of regulatory governance in comparing with governmental regulation? - What are the chances and risks of codes, certification and accreditation as instruments of regulatory governance? - What is the surplus value of codes, certification and accreditation as instruments of regulatory governance?

Panel 3I Promoting Regulatory Compliance

1 Taking advice – the role of advice, guidance and persuasion in compliance John Brady Anglia Ruskin University

ABSTRACT An age of crisis is a time of uncertainty. Taken for granted understandings may be reviewed in search of new meaning. Advice, guidance and persuasion have long been noted in the regulatory literature either as part of a debate on the desirability of their place in regulatory encounters or as empirically based descriptions of inspector behaviour. However, the latter studies have often conflated advice, guidance and persuasion. The research seeks to understand more clearly what the differences between the terms are, if any, and their relative use and purpose. Using participative inquiry with inspectors and a number of researcher observations of inspections this qualitative inquiry creates a typology of advice, guidance and persuasion recording the awareness by inspectors of frameworks, networks and professional values (the regulatory space).

A cybernetic framework is often used to describe processes of regulation; the framework involves a Director, a Detector and an Effector. The construct was used as the theoretical predictor of the place and purpose of advice, guidance and persuasion. It was assumed that these terms would fall neatly into the Director stage. The research data contradicted this assumption suggesting either, that they are used across all of the stages, or that there might be cybernetic mini-cycles in play. Constructing the typology also identified the role that advice, guidance and persuasion play in supporting compliance behaviours and challenging organisational cultures.

Consequently, a further stage (in progress) has been to look at advice, guidance and persuasion activity not as optional activity but as an embedded regulatory strategy. Advice et al are perceived not only as having content but also as modifiers of ‘social distance’ (Braithwaite 2003). In a complex transmission of information, club and network knowledge, values and principles they help structure regulatory, professional and sectoral relationships and at the same time promote improvement in regulated organisations. 292

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Braithwaite, V. (2003). Dancing with Tax Authorities: Motivational Postures and Non-compliant Actions. Taxing Democracy. V. Braithwaite. Aldershot, Ashgate: 15-40.

2 Accounting for Implementation: A Multi- level Analysis of International Standard- Setting in Accounting Burkard Eberlein, Alan Richardson York University

ABSTRACT The International Accountings Standards Boards (IASB), a private body, has emerged as a global standard-setter in accounting. It develops and issues International Financial Reporting Standards (IFRS) that have been broadly adopted across the globe for companies listed on stock exchanges. As such, the IASB is often hailed in the international governance literature as success story of private transnational rule-making. However, this perspective exclusively focuses on the formulation of global standards and neglects local implementation and compliance: the translation of abstract standards into domestic practices is subject to local variation, and the ultimate success of private standards hinges upon proper public enforcement. Drawing on compliance research in international relations and implementation research in public policy, the paper develops an analytical framework to capture jurisdiction-specific variations of IFRS implementation and compliance. These are hypothesized to vary with two key domestic factors: institutional compatibility (mediated through domestic conflict) and regulatory capacity. At a first level, the study investigates variations in the scope and intensity of formal IFRS adoption by countries, using original data available through the accounting firm Deloitte, covering 162 countries. This scaled adoption data is compared to regulatory capacity data drawn from the aggregate governance indicators developed by the Worldwide Governance Indicators (WGI) research project as well as more accounting-specific data from the International Federation of Accountants (IFAC), and to institutional compatibility data that we build from established accounting system attributes. This will yield different clusters of countries defined by adoption behaviour and capacity/compatibility profiles. At a second level, we select ‘typical’ national cases from each cluster for a deeper, narrative implementation study that allows capturing additional determinants of divergence of IFRS practices, including informal barriers to effective harmonization that arise in the implementation process after and beyond formal adoption.

3 The impact of regulatory policy on individual behaviour: a goal framing theory approach Julien Etienne London School of Economics

ABSTRACT The article presents a theoretical framework for analysing regulatees' responses to behavioural expectations set for them in public regulation. It identifies the main variables and mechanisms through which regulatory policy may influence individuals' choices. The article builds on Siegwart Lindenberg's goal framing theory. The theoretical argument is supported by an extensive range of examples borrowed from the empirical literature on regulatory compliance. As such, it fills an important lacuna of compliance studies: the absence of a synthetic formal theoretical base capable of encompassing the numerous findings of the empirical literature. The theoretical framework gives also a consistent account of the cumulated influence of heterogeneous motives on (non)compliance decisions, and thus provides a better understanding of responses to regulation than there was before.

4 The Efficacy of Regulation : An Analysis using Self-Determination Theory Deborah E. Rupp, Ruth V. Aguilera, Cynthia A. The University of Illinois at Urbana/Champaign

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Williams

ABSTRACT Self-determination theory (SDT), considered one of the most influential recent theories of human motivation, suggests that meeting peoples’ psychological needs of autonomy, competence, and relatedness will most effectively foster positive human potential and constructive social development (Deci & Ryan, 1985; Ryan & Deci, 2000). SDT scholars have argued that the decisions of individuals to be either constructive or destructive reflect more than personality or genetic differences, but also reflect elements of the individual’s social environment. While the term “constructive social development” is generally used in psychology to refer to the social development of a person, we posit that this theory is useful for evaluating constructive social development at the level of the firm. We define constructive social development for these purposes as engaged employees and management showing positive institutional citizenship (as defined in the organizational psychology literature). In this paper, we are developing a theory of regulation that evaluates the likely efficacy of a range of regulatory influences, from hard law through various soft law configurations through norms, by virtue of the interaction between that specific regulatory approach and the expected effect on the autonomy, competence and relatedness of people within the firm. We also rely on Kelman’s theory of social influence (1958; 2006) to look more specifically at what can move individuals and groups within the firm from public conformity to regulatory goals to internal acceptance and sincere commitment to those goals.

Panel 3J State and Market in the Design of Regulation

1 Lessons from the American Single Market for Europe: Contestation, Legitimacy and Crisis in US Michelle Egan American University Washington DC

ABSTRACT With the global economic crisis and increased protectionism within Europe, there are concerns that the single market is under tremendous pressure. As the cornerstone of European integration, and the foundation of market liberalization, the single market has become somewhat neglected in recent years as attention has been given to other new areas of cooperation and integration including foreign policy and justice, freedom and security. However, the current economic circumstances, with government bailouts, low growth rates, and rising unemployment, have focused attention back onto the single market and its role in managing globalization.[i] While the United States fostered the creation of a single market, based on explicit constitutional principles, the division of regulatory competencies, and different modes of governance, the process was quite contested with social mobilization, protest politics and territorial divisions. Studies of American political development can provide an important agenda for bringing in political-sociological factors that shape market outcomes (Benschel, 1990) . While political union initially led economic union in the United States, with the reverse true in the European Union, both have had to define and constantly reevaluate the relationship between political institutions and levels of political authority, market rules and economic interests. Market integration in nineteenth century America was one of volatile market transition, heavily dependent on well defined legal and judicial mechanism for resolving inter-state conflicts that were often contested. This paper draws lessons from the American experience, as the single market can benefit from testing theoretical arguments longitudinally and comparatively with historical and empirical material

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(Schimmelfennig, 2009). Some scholars have focused on how single markets have been instituted in other historical periods, drawing on examples from nineteenth century German unification and integration (Hallerberg, 2001; Legrand, 1958) and nineteenth century American consolidation and expansion (Egan, 2008). The linkage between state-building and market integration in both of these cases, has raised important comparisons to the European Union about sovereignty, territoriality and governance. While states in different countries use a variety of instruments and policies like the regulation of industry and trade, the redistribution of incomes and assets, the use of fiscal and monetary policies and direct state ownership of key industries, the shift from the 'developmental state' to the 'regulatory state' provides important parallels between US and the European Union. The developmental state gained its legitimacy by high rates of economic growth and industrialization, both domestically and in its relationship to the global economy. Yet such consolidation should also be underscored by the importance of economic nationalism and social mobilization as critical elements in the evolution and contestation surrounding market practices. Because such economic growth depended on the construction of a single, unified market, and the involvement of government in a wide range of regulatory activities (Novak, 1996), a comparative study can yield important insights into the strategies, choices and constraints surrounding the single market in Europe.

1 What’s an impact assessment to do? Ideas, instruments and the capabilities- expectations gap Claire A. Dunlop, Claudio M. Radaelli, Duncan University of Exeter Russel

ABSTRACT The large majority of European governments have experimented for almost a decade with regulatory policy mixes including simplification, reduction of administrative burdens, e‐consultation, notice and comment procedures, cost‐benefit analysis and impact assessment (IA) in the context of ‘better regulation’ policies. IA, the pivotal instrument of this approach to regulatory reform has been first enthusiastically imported from the USA, however recent research shows that countries as diverse as Denmark, Italy, the Netherlands, Sweden and the UK find it difficult to get IA ‘right’ and to produce policy learning. Instead, current research has shown symbolic and ritualistic usages of this instrument. Whilst in the US impact assessment procedures have their clearly demarcated role to play in the Presidential control of federal executive agencies, European governments have sought to use IA in connection to several aims: controlling the regulators is often one of those aims, but we also find ‘rationality’, ‘challenging our prior beliefs’, ‘open governance’, ‘joined‐up government’, ‘balancing sustainability with competitiveness’, ‘transparency in consultation and decision‐making’, ‘promoting a business‐friendly environment’, ‘controlling multi‐level regulatory activity’, and ‘evidence‐based policy’. In this paper, we argue that the multiple and contingent identities attached to IA in Europe can be explained by linking policy ideas to instruments. Policy ideas – it has been argued recently – have vehicular qualities and travel across countries easily, especially in a dense institutional multi ‐level setting like the European Union. Policy innovation ideas travel because they have talisman ‐like properties – they can be accepted by different stakeholders because each of them projects different meanings on a given innovation. Hence they adopt the same innovation for different reasons. However, the literature has failed to add that this multiplication of meanings and policy frames associated with a policy innovation can also lead to an escalation of goals, attempts to manipulate the content of the innovation, and ultimately, has Riker has shown, lack of social choice equilibrium as a result of the high number of dimensions. The result is that a policy tool’s capabilities are exaggerated to the point that a ‘capabilities‐expectations’ gap is created. Another consequence is that the overall coherence of the policy mix of ‘better regulation’ policies decreases, since it

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becomes difficult to pin down what exactly IA has to do in the mix. Such mechanisms of manipulation cannot be sustained – politically, economically or in terms of social legitimacy. Eventually, it becomes impossible to choose what an IA should do for the complex, multi‐dimensional constellation of actors involved. We examine this explosion of aims, manipulation, and the resulting disequilibrium associated with IA, empirically, by looking at different types of documentation (parliamentary hearings and inquiries, submissions to consultation, and official statements of governments, agencies, business associations and stakeholders) for the UK and the European Union. We conclude that what superficially looks like ‘frustration’ and ‘cacophony of voices’ is instead a complex mosaic of political manipulation. Empirically, the paper contributes to a deeper understanding of the political properties of policy instruments. Theoretically, we offer insights on the interplay among ideas, instruments and politics. The paper ends by trying to offer a more realistic account of what IA can do than those presented by decision‐makers and stakeholders. With more humble approaches to policy innovations it may be possible to realise collective agreements between policy actors that are sustainable and robust, where values are condensed and expectations controlled. Only by narrowing the gap between capabilities and expectations can the scene be set for the substantive and institutional learning IA is intended to foster.

Panel 4A Corporate Governance & Enforcement

1 Corporate Governance Regulation in the Aftermath of the Crisis: The role of Enforcement Stelios Andreadakis Oxford Brookes University

ABSTRACT Following the wave of scandals and collapses in both the United States and Europe, corporate governance has become one of the most popular items in the regulatory agenda. Hundreds of pages have been written and several opinions have been expressed about the optimal form of regulation, but we are still far from reaching consensus. The focus so far has been placed just on the tension between rules-based and principles-based solutions. The Sarbanes-Oxley Act was the American response to the voices asking for strict rules and severe penalties. The European Union adopted a more cautious and liberal approach, choosing the path of harmonisation and convergence. Self-regulation and the ‘comply or explain’ theory has been promoted as the most suitable regulatory model for the EU. The Action Plan has been the roadmap for the EU’s intentions and objectives in a short, medium and long-term horizon. However, the recent crisis has created an atmosphere of uncertainty it is still not clear whether EU will continue to support the same approach or whether the Commission will put pressure for a stricter model based on more rules and emphasis on enforcement. This paper argues that the EU needs to make a straightforward decision and choose the path that leads to the most efficient regulatory solution for the Member States. The starting point is a regulation that respects diversity and the special characteristics of the EU, but

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at the same time creates a shield against fraud, mismanagement and possible future periods of recession. Then the focus shifts towards the uniform interpretation and the consistent enforcement of the rules, in order to create a business environment of trust and confidence. Only in this way, can the EU be an attractive forum for companies and new investors, keeping up with the requirements of the new area after the crisis.

2 When does flexible regulation work? The comply-or-explain principle in UK and German corporate governance Paul Sanderson, David Seidl, Bernhard Krieger, University of Cambridge, University of Zurich, John Roberts Ludwig- Maximilians- Universitat, University of Sydney

ABSTRACT The current financial crisis has given rise to calls to toughen considerably the codes of corporate governance put in place in many countries to regulate corporate behaviour (e.g. the UK Combined Code). These codes vary slightly in form but tend to contain a mix of non-discretionary regulations and discretionary guidance and information. Almost all such codes embody some variation or other of the comply-or-explain principle. Companies should comply with the rules or explain why they do not. In this way the code framers avoid, or perhaps enable, a one-size-fits-all approach. It is this discretion that governments are under pressure to limit, but little is known about how it is used, in what circumstances, and to what effect? In this paper we report the findings of research carried out in the UK and Germany to investigate the extent to which large public companies comply with the rules, and the attitudes of company directors and legal counsel to using comply-or-explain. We find that positive conformance with codes depends on factors such as the extent to which regulatees are engaged in the formation and revision of the code, and thus feel a sense of ownership; the existence of interested and relevant monitors; and the extent to which soft regulation is a traditional means of control in a country. We also found that pressure, both internal and external, both real and imagined, can lead to the establishment of a norm of full compliance, with perhaps perverse outcomes, and that in any event the majority of the contents become akin to hard law where deviation is not considered acceptable. There are however a very small number of rules where temporary deviation may be unavoidable from time to time and where non-compliance accompanied by a valid explanation is accepted.

3 Vicious Spirals in Corporate Governance: Mandatory Rules for Systemic (Re) Balancing? Michael Galanis University of Leeds

ABSTRACT In recent years, a general belief in the integrity of the market mechanism as a method of economic coordination has increased the acceptance of contractual governance as opposed to regulatory structures based on mandatory rules. Following the recent collapse of financial markets and the resulting recession, however, this structural form is now being called into question as the calls for more regulation and government intervention are increasing. In this context, this paper revisits the law vs. contract debate in the field of corporate governance. Following a theoretical framework utilising elements of game and resource-based theory of the firm, the company is envisaged as a central counterparty in repeated bargains with its stakeholders. It is shown that power dynamics which are inherent in the repeated bargains between stakeholders and the company are prone to imbalance rather than balance by causing cumulative increases in the relative power of stronger parties and vicious spirals of relative power loss for weaker ones. This cumulative power imbalance is then reflected in the organisational rent appropriation process, as weaker parties are eventually

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expropriated by stronger ones. It is therefore argued that, since the contractual model is inherently prone to instability, mandatory power-balancing rules are necessary. Such (re)balancing regulation, however, would need to follow a ‘holistic’ approach encompassing several areas of economic activity, because stakeholder and company power is drawn from and affected by numerous interweaved institutional arrangements in the economy. In recent years, a general belief in the integrity of the market mechanism as a method of economic coordination has increased the acceptance of contractual governance as opposed to regulatory structures based on mandatory rules. Following the recent collapse of financial markets and the resulting recession, however, this structural form is now being called into question as the calls for more regulation and government intervention are increasing. In this context, this paper revisits the law vs. contract debate in the field of corporate governance. Following a theoretical framework utilising elements of game and resource-based theory of the firm, the company is envisaged as a central counterparty in repeated bargains with its stakeholders. It is shown that power dynamics which are inherent in the repeated bargains between stakeholders and the company are prone to imbalance rather than balance by causing cumulative increases in the relative power of stronger parties and vicious spirals of relative power loss for weaker ones. This cumulative power imbalance is then reflected in the organisational rent appropriation process, as weaker parties are eventually expropriated by stronger ones. It is therefore argued that, since the contractual model is inherently prone to instability, mandatory power-balancing rules are necessary. Such (re)balancing regulation, however, would need to follow a ‘holistic’ approach encompassing several areas of economic activity, because stakeholder and company power is drawn from and affected by numerous interweaved institutional arrangements in the economy.

In recent years, a general belief in the integrity of the market mechanism as a method of economic coordination has increased the acceptance of contractual governance as opposed to regulatory structures based on mandatory rules. Following the recent collapse of financial markets and the resulting recession, however, this structural form is now being called into question as the calls for more regulation and government intervention are increasing. In this context, this paper revisits the law vs. contract debate in the field of corporate governance. Following a theoretical framework utilising elements of game and resource-based theory of the firm, the company is envisaged as a central counterparty in repeated bargains with its stakeholders. It is shown that power dynamics which are inherent in the repeated bargains between stakeholders and the company are prone to imbalance rather than balance by causing cumulative increases in the relative power of stronger parties and vicious spirals of relative power loss for weaker ones. This cumulative power imbalance is then reflected in the organisational rent appropriation process, as weaker parties are eventually expropriated by stronger ones. It is therefore argued that, since the contractual model is inherently prone to instability, mandatory power-balancing rules are necessary. Such (re)balancing regulation, however, would need to follow a ‘holistic’ approach encompassing several areas of economic activity, because stakeholder and company power is drawn from and affected by numerous interweaved institutional arrangements in the economy.

Panel 4B

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Governing Nano- Technologies: From Risk Regulation to the Governance of Innovation I

1 The role of industrial dynamics and innovation policies in nanomaterials governance Ismael Rafols

ABSTRACT Abstract unavailable currently

2 Innovative governance of nanotechnologies: a legal perspective Gregory Mandel Temple University

ABSTRACT Abstract unavailable currently

3 The Limits of International Harmonization in Nanotechnology Risk Regulation Ronit Justo Hanani, David Levi- Faur, Tamar Tel Aviv University, The Hebrew University Dayan

ABSTRACT Abstract unavailable currently

4 ‘May contain nano': the rhetoric and reality of consumer labelling Elen Stokes Cardiff University

ABSTRACT Abstract unavailable currently

Panel 4C Designing Sustainable Regulation

1 When Soft law hits Hard. On the effectiveness of new regulatory approaches in Pollution Prevention and Control in the EU Charalampos Koutalakis, Aron Buzongany German Research Institute for Public Administration Speyer, University of Athens

ABSTRACT The paper analyses the evolution of collaborative governance between state and business actors in

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EU policies for combating pollution. We seek to identify institutional pre-conditions for the effectiveness of “soft” policy instruments in regulating industrial emissions. The study draws on a comparative investigation of the application of the Directive on Integrated Pollution Prevention and Control (IPPCD) in Southern and Eastern member states of the European Union. This Directive is characterised by a gradual departure from traditional command-and-control instruments based on the setting of uniform, legally binding emission limit values. Instead, the IPPCD provides for indicative non-binding emissions limits to defined in co-regulatory processes on the basis of best practices and techniques, taking into account local environmental, technical and economic circumstances. These procedural and substantive components of the Directive provide an excellent basis for the assessment of the effectiveness of softer regulation in the area of environmental policies as compared to more traditional ‘hard’ regulatory approaches in the EU. Are these novel non-binding instruments better than generally binding law in facilitating compliance of domestic public and private actors involved in the process of issuing permits to industry? Under which conditions are they capable of achieving the EU objectives of a high level of environmental protection? Our analysis reveals that in countries with weak state capacities the application of soft, legally non- binding regulation may lead to adverse effects, such as non-compliance, a regulatory race to the bottom or the “hollowing-out” of the permitting procedure. In the medium-term, such developments can undermine the normative power of EU law.

2 From Regulation to Implementation: Responsive Assessment of Environmental Compliance and Enforcement Orr Karrassin, Oren Perez Sapire Academic College Law School, Bar Ilan University

ABSTRACT Responsive regulation possesses the potential of bridging the gap between environmental policy and implementation. Key to realizing this promise is improved information and reflexive analysis of regulatory performance. Environmental compliance and enforcement indicators and an index which serves as a regulatory scorecard can set the boundaries of a rational reflexive process and provide necessary information to regulators and the public. This analysis can serve as a basis for modifying regulatory practice or designing new and better regulation.

Although a process for the design, collection, and analysis of necessary data for a performance index is a complex task, it can be managed rationally through a Goal Oriented Model (GO Model). This model links indicator and index design to precisely stated goals and objectives of the regulatory program and to the rational and conditions for effectiveness of regulatory tools.

The paper presents the GO Model through which an index is designed and implemented in assessing effectiveness of compliance and enforcement in construction and building waste regulation in Israel. The index results are than analyzed and discussed. The implementation of the index reveals a dismal picture of ineffectiveness, low compliance rates and futile enforcement. The analysis supports redesigning regulation in the field of construction and building waste and serves as the basis for suggesting a new regulatory regime. Also the process of implementing the index is scrutinized through identification of barriers and difficulties in implementation. The paper concludes by suggesting a list of factors that would allow better reflexive analysis of environmental regulatory performance through the implementation of the GO model index.

3 Business as Usual or Apocalypse Now? Regulating the Car Industry’s Carbon Emissions

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John Mikler University of Sydney

ABSTRACT The times in which we live remind us that capitalism is characterised by tumult. Yet, capitalism is also characterised by institutional stability. This paper considers how the institutional basis for capitalist relations of production affects the capacity of industrialised states to regulate corporate environmental performance, and whether this is being transformed as a result of the tumult of recent years. It focuses on the car industry because it is the world’s largest manufacturing sector, dominated by multinational corporations, and the producer of products that are the second biggest contributor to global CO2 emissions after power generation. Having faced the twin crises of the global financial meltdown plus an oil price shock, and now faced with recently tightened regulatory standards that require it to further reduce the CO2 emissions of its products, it is an ideal test case for whether forces for transformational change versus enduring institutional stability best explain environmental outcomes. By focussing on the US, European, and Japanese industries, it is shown that nationally specific regulatory contexts resulting from states’ varieties of capitalism continue to better explain the divergent paths taken by the industry’s key firms to improving their environmental performance, rather than the recent shocks it has faced and any purported transformation in state-business regulatory relations. This suggests that while recent events have produced tumult for the industry and regulators of its products, nevertheless institutional stability means that the path dependence of deeply historically embedded national institutional variations in capitalist relations of production continue to influence firms’, and therefore states’, future abilities to reduce CO2 emissions.

3 Europe in a Climate of Risk: Three Paradims at Play Veerle Heyvaert Londong School of Economics

ABSTRACT This paper examines the EU regulatory response to climate change. Copenhagen notwithstanding, the EU is rapidly developing an arsenal of Directives, Regulations and Decisions to slow down the pace of global warming, and this raises important questions about the ideas, objectives and approaches that inform its actions as a climate change regulator.

Climate change is understood as a major global environmental risk and climate change regulation can be seen as a variant of risk regulation. The appropriateness of risk-based approaches to combat climate change is, however, explicitly challenged in recent scholarship. Questions can also be asked about the variety of risk based approaches that should be pursued in the climate change context. This paper aims to contribute to the debate by tracing the salient features of three regulatory paradigms: the risk regulation paradigm; the EU risk regulation paradigm; and the (nascent) climate change risks paradigm. The analysis reveals points of overlap but also divergence between the climate change risk and, particularly, the EU risk regulation paradigm. It is argued that an understanding of regulation, and regulatory challenges, in this area cannot be fully achieved without an appreciation of the roles of, and interplay between, these paradigms. The paper outlines three possible trajectories for EU climate change regulation: colonisation, wherein the EU risk regulation paradigm subsumes climate change regulation; co-existence, which results in the development of two separate regulatory paths, and cross-regime learning, which refers to the potential for different regulatory regimes to learn through interaction and comparison. The latter scenario may yield the most promising results, but is also the most demanding as it assumes an advanced understanding of the dynamics that imbue different paradigms and a willingness to revisit and challenge some well- established notions about health and environmental risk governance. The battle against climate change is, therefore, not only a regulatory challenge of unprecedented scale and urgency, it also

Page | 63 throws down the gauntlet to risk regulation scholarship to rethink and reposition itself for a new era.

Panel 4D Regulation and Diffusion

1 Regionalization and globalization in regulatory capitalism: the Regional dimension in the diffusion of regulatory agencies Xavier Fernandez-i-Marín, Jacint Jordana, David Barcelona d’Estudis Interncionals, Universitat Levi- Faur Pompeu Fabra, Hebrew University

ABSTRACT The decision to create independent regulatory agencies as a tool to cope with the development of capitalism has been widely followed by decision makers from all over the globe. The paper aims to answer whether the diffusion of this kind of institutions is a process explained by regional dynamics (regionalization) or by international dynamics (globalization). By regionalization we mean that countries have followed the patterns of regional leaders and by globalization we understand that countries have followed a logic based on following countries outside their region. The covariates include wealth, population, democratic features and veto players. More specifically, the paper compares models assuming that those covariates have an effect on an international field and models assuming that the covariates have an effect at regional level. The performance and implications of the models are then compared to understand under what circumstances diffusion follows a regional or a global logic. The data used to test the hypothesis comes from a database that includes countries from Europe, Latin America and the most populated countries from other parts of the world and 16 sectors of public policy from economic, social and utilities areas. Event history analysis is used to capture the hazard rate of creating regulatory agencies whether specific characteristics associated to countries increase or decrease the odds of survival (duration without regulatory agency). A non- nested multilevel model is used to account for country, sector and region differences. Bayesian inference is used to estimate the parameters of interest.

2 The Administrative Burden Reduction Policy Boom in Europe. Comparing mechanisms of policy diffusion Kai Wegrich Hertie School of Governance

ABSTRACT Much has been written on the diffusion of public management and regulatory reform tools. Available evidence suggests that cross-national policy diffusion is an increasingly significant phenomenon, especially in the European context. While internationalisation of policy discourses and expert communities are regarded as key driving forces of policy diffusion, public management reforms are also said to be particularly vulnerable to mechanisms of ‘diffusion without convergence’. This paper analyses the case of policies aiming at reducing administrative burdens of regulations through the lens of the literature on policy diffusion. The diffusion of the so-called Standard Cost

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Model for measuring administrative burden between 2003 and 2007 is used as a case to explore the mechanisms facilitating policy diffusion in this domain. The analysis reveals patterns of rapid diffusion. This policy boom has been driven by a combination of different mechanisms of policy diffusion rather than by a single driving factor.

3 A comparative analysis of regulatory governance innovations Fabrizio De Francesco University of Zurich

ABSTRACT Notwithstanding, three decades of research, cumulated knowledge on policy diffusion is still unstable since the lack of attention to the compatibility of innovation with the circumstances of potential adopters. Further, there is the necessity to avoid the ‘proinnovation’ bias, considering also innovations failing to diffuse. Thus, a preferable research strategy should aim to understand what makes one innovation more likely than others to be adopted by countries, in this paper the OECD member states. Granted the growing importance of accountability and scientific knowledge in regulatory governance, this paper focuses on administrative innovations aimed at rationalising the regulatory process. Three innovations – regulatory impact analysis, office technology assessment (a case of arrested diffusion), and freedom of information act – with similar attributes, features, and purposes are considered. Relaxing the assumptions of adopter’s rationality, e.g. the presence of rational organisations other than the adopting unit and organisational uncertainty that drives emulation, it is possible to reckon national, international, and transnational levels of analysis. Such comprehensive theoretical framework and the analysis of a small set of innovations allow also for alternative methodologies. Indeed, on one hand the three innovations are jointly considered as distinguishable and complimentary elements of a broader reform movement in which countries may have different choices at the same point in time. On the other hand, one can argue that each innovation is part of a contingent innovation-decision in which innovations are synergistic, delineating an adoption sequence, and, thus, providing important normative insights in the analysis of administrative innovations.

Panel 4E Horizontal Regulatory Cooperation: When States agree on how to Regulate

1 Jumping the Pond: Transnational Law and the Future of Chemical Regulation Noah Sachs University of Richmond

ABSTRACT This year represents the best chance in a generation to overhaul the antiquated and cumbersome

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system of U.S. toxics regulation. Reform should include many of innovations in the EU’s REACH regulation, and a new statute should also be grounded in the Strong Precautionary Principle. That is, it should presume that chemicals meeting certain hazard criteria pose a significant risk to human health, and it should switch the burden of proof to chemical manufacturers to overcome that presumption and demonstrate safety.

At the same time that toxics regulation needs to move in a more precautionary direction, however, the precautionary principle is under attack from prominent critics, including Cass Sunstein, Jonathan Graham, and Jonathan Weiner. Their scholarly project to undermine the theoretical foundations for precaution threatens protective environmental regulation in both the U.S. and in Europe.

This Article rebuts the major criticisms of the Strong Precautionary Principle, strengthening the theoretical arguments for shifting the burden of proof in toxics regulation. My reform proposal places government in an ex ante gatekeeping role for chemical risks, similar to the role of US and EU regulators in reviewing new pharmaceuticals. While critics suggest that Strong Precaution represents a new and radical alternative to dominant risk management paradigms based on cost- benefit analysis, I show that Strong Precaution is in fact deeply rooted in America law. It forms the basis for numerous licensing, permitting, and pre-approval programs and can be an effective governance mechanism in discrete areas of regulation. Implementing Strong Precaution in chemical regulation would both promote development of toxicity information and ensure public health protection in contexts of scientific uncertainty.

2 Implications of horizontal regulatory cooperation on the WTO legal order Alberto Alemanno HEC Paris

ABSTRACT As countries around the globe embrace regulatory reform programmes in order to improve the effectiveness of regulatory outcomes, there is a growing recognition that ex ante analysis of likely impacts of regulatory actions is the best way to attain this goal. Typically the focus of the different analytical tools developed by countries to undertake such a prospective analysis concern the impact of regulatory action within their own jurisdictions. Yet today an increasing proportion of regulatory reform programs reflect a growing awareness of the international context. Thus, both US OMB Circular A-4 and the EU Impact Assessment Guidelines, although largely geared towards domestic impacts of regulations, mandate the regulators to consider the international trade and investments effects of their respective regulations. As a result, analytical methods such as regulatory impact assessments and benefit-cost analysis encompass not only domestic but also international impacts of regulations. This paper, after examining the rationale for such a reorientation and expansion of impact analysis as well as the different methods used to predict also international impacts, will offer a critical assessment of the possible legal implications stemming from such an ex ante scrutiny on the trade effects of proposed rules. In so doing, it will investigate to what extent such an exercise might be accommodate within the WTO legal order and, in particular, whether it might raise some problems in case of litigation stemming from the adoption of a rule whose foreseeable effects had been previously identified by the author country.

3 The ‘peer’ phenomenon in 'Better Regulation' Anne Meuwese Tilburg University

ABSTRACT What happens when unelected actors from different institutional backgrounds and different legal

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systems start talking to each other about the best way to make law? In recent years, standards for good lawmaking have been collected in comprehensive strategies for ‘better regulation’, as this new horizontal policy area is known in the EU and many European countries. One consequence of this development has been the emergence of dialogues between ‘better regulators’, who see each other as ‘peers’, creating new venues for the exchange of information, experiences and findings. Often this includes standards with possible implications for all substantive areas of law and policy and solutions with possible consequences for domestic institutional set-ups. What is often neutrally referred to as ‘best practices’, often hides a whole set of assumptions about what is legitimate in public decision-making. This paper maps a few networks explicitly dealing with Better Regulation (OECD peer review, the International Regulatory Reform Network and the EU-U.S. ‘High-Level Regulatory Cooperation Forum’) and shows how constitutional ideas can be disguised as ‘regulatory best practices’, and promoted through ‘horizontal regulatory dialogues’.

4 The regulatory effect of the integrity watchdog networks Ramon-Jordi Moles Plaza, Endrius Eliseo Cocciolo Universitat Autònoma de Barcelona

ABSTRACT Theorists of the “regulatory state” consider that the contemporary period is characterised by the actions of public powers through the use of authority, rules and standards-setting. For this reason, scientific analysis literature commonly features analyses of the regulation of business, and especially the regulation of privatized utilities. This regulation of economic sectors by public administrations (frequently specialised agencies) or private subjects represents, however, only a partial view of the regulatory phenomenon. Indeed, the word regulation is not generally used to denote the various ways in which public organizations are shaped by rules and standards emanating from arm’s-length authorities. There is a real series of institutions of constraint or watchdogs – in parallel to but different to company and market regulators – that perform different functions: ensuring “economic accountability”, consolidating “accountability for rights”, guaranteeing the “integrity” of the public sector, or fighting against the money-laundering or fraud. There is, therefore, a “regulatory State within the State”. This paper is focused on the analysis of the integrity regulation inside government, i.e., regulation of frauds, abuses, conflicts of interest and other phenomena related to the corruption from an ultra- state perspective. The treatment of the maladministration requires joint efforts; the cooperation between national and supranational agencies, intergovernmental bodies and international organizations, generates a global regulators network. This regulatory system is plural and fragmented, saprophyte (because it depends on other systems) but it is independent at the same time. The principal functions of these structures of cooperation are the reciprocal assistance, the harmonization, the standardization, etc. In this way, the procedures of these institutions, its rules, protocols, advices, etc. produce a direct or indirect regulatory effect. Therefore, it can be observed that the regulation of the government’s integrity and its agents goes out of his natural area, the State, and is structured in forms of cooperation in the global arena

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Panel 4F Global Food Safety and Quality Governance: The Impact of Global Food Governance in Developing Countries

1 Non-governmental food safety standards: (mis) matching global norms with local needs? Jaap Van der Kloet Radboud University Nijmegen

ABSTRACT In recent years, West European supermarkets have been playing an active role in the global regulation of food safety. They developed several food safety standards and compelled suppliers of food products around the world to be certified against these standards. In this paper I look at how such standards work for those who are regulated by them (regulatees). As the social working of rules is influenced by interactions between persons and organisations in semi-autonomous social fields (Moore 1973, Griffiths 1996) it is assumed that a food safety standard works differently in developed countries than in developing countries. In order to know how non-governmental food safety standards work for regulatees in both type of countries I asked fresh produce growers (green bean and sweet pepper) in the Netherlands and Kenya what they think of the standards against which they are certified and what their experiences with certification are. The aim of this paper is to learn more about the role of non-governmental food safety standards in the production of fresh vegetables in developed and developing countries. This paper is based on desk research and semi- structured interviews with growers of green beans and sweet peppers in the Netherlands and Kenya.

2 GLOBALGAP: a curse for smallholders in developing countries or a blessing in disguise? Nicolien van der Grijp VU University Amsterdam

ABSTRACT GlobalGAP, or the Global Partnership for Good Agricultural Practice, operates a retailer-led certification programme (1998) that defines standards for good agricultural practice. It uses the incentive of market access to convince agricultural producers to meet the certification standards and to become certified. For many producers worldwide, it is vital to obtain and maintain, through certification, their license-to-supply to the European supermarkets.

One of the main objections against the GlobalGAP programme is that it is unfair towards farmers in developing countries, especially smallholders, as agricultural producers carry nearly all costs of the regulatory system without the compensation of price premiums. Besides these costs, the system is organized in such a way that liability for product failure is shifted to farmers. In contrast, it is also claimed that producers in developing countries do not only have problems when confronted with

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private standards from developed countries but also experience fundamental benefits.

The proposed paper will first summarise the current state of the debate on the impacts of the GlobalGAP programme, based on the literature and the developments in the WTO/SPS context. It will then focus on countermovements that have emerged in reaction to standard-setting by powerful corporate actors and will discuss under what conditions such initiatives can help to bridge the global divide between the interests of large corporations and smallholders. As a last step, it will explore what role international law can play in order to strengthen the position of vulnerable farmers.

3 Between the requirements of “regulations” and “standards” in food safety: challenges and opportunities for developing countries’ exports of tropical fruits to the European Union. Vanessa Constant Laforce University of Abertay Dundee

ABSTRACT Developing countries’ exports of tropical fruits to the European Union (EU) is undeniably significant for their economy and social gains. Latin American, Caribbean and African countries are important suppliers of tropical fruits (mangoes, guavas, bananas and pineapples) to the EU market. Food scares over the last two decades in industrialised countries has led to increasingly stringent food safety regulations. Consumers concerns with regard to the safety and quality of food have also influenced the private sector, which has developed numerous standards for imported fruits sold in supermarkets. In addition to EU regulations developing countries have also to comply with the evolving “voluntary” requirements imposed by private companies in order to participate in value chains. These “new” requirements are mainly private protocols which apply to all suppliers, and are based on a combination of international and national regulations for pesticides and other food safety standards. As a consequence, developing countries’ exports of tropical fruits are affected by food safety regulations and standards imposed by both EU governmental and non-governmental actors. With food safety being a top priority for both the public and private sectors, there is a need to examine the development of the requirements as applied to imports of tropical fruits from developing countries within the EC and particularly those imposed by retailers. Therefore, the aim of this paper is to critically analyse, from a legal perspective, the nexus between the two forms of food safety requirements, regulations and standards, with a particular focus on pesticides, and to assess the potential impacts of this alliance on developing countries’ opportunities to access the EU market.

Panel 4H Steering Non- State and Hybrid Regulatory Regimes

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1 Property Rights and Regulation, Private and Public Sol Picciotto Lancaster University

ABSTRACT The past 30 years has seen an enormous growth of formalised regulation, which some have characterised as part of a wider phenomenon of `regulatory capitalism’. This has also been a period of the hegemony of neo-liberal ideologies of free markets. The paradox aptly described by David Vogel as `freer markets, more rules’ has not received an adequate explanation, despite an equally enormous growth of studies and theories of regulation. This paper will argue that insufficient attention has been given to the relationship between the `naturalisation’ of property rights, and the growth of regulation. It is generally accepted, particularly by liberal theory, that private property rights are essential to free markets. However, the acceptance as `natural’ of existing forms of private rights to property, in an era when economic activity has become increasingly socialised, generates instabilities, to which a frequent response is regulation. This argument will be developed through the analysis of financial market regulation, which over the past 30 years has been a paradigm of hyper-regulation, but leaving untouched the private property protections that have fuelled `financialisation’ and speculation, and generated crises culminating in the crash of 2008-9.

2 Competition Law and Transnational Private Regulatory Regimes: Marking the Cartel Boundary Imelda Maher University College Dublin

ABSTRACT A commitment to competition policy is pervasive in modern (and emerging) industrialised economies. And yet, there is no commitment to an international competition regime or the development of international competition norms despite the prevalence of international trade and the role of transnational corporations in markets. The main exception is the EU where its competition norms govern inter-state trade for all 27 member states and for any transactions outside the EU that are capable of having an effect on inter-state trade within the EU. The editors of this special issue refer to the emergence of transnational private regulatory regimes as part of the problem and the response to the limits of national governments. These regimes also collide with competition norms in a number of ways. First, single firms can constitute such a regime (e.g. through setting industry standards due to their dominance) and may fall foul of the prohibition on monopolisation (US antitrust rules) or abuse of dominance (EU law). Nationally sanctioned private regulatory regimes may constitute barriers to trade which restrict market entry and, under EU Law, could constitute a breach of state obligations under the competition rules. Collective regimes setting standards may constitute cartels i.e restrictive agreements between market actors that adversely affect competition. Cartels can divide up geographic markets between players, rig bids for public contracts and exchange detailed information on each other’s market activities. They render market entry difficult if not impossible and keep prices artificially high. They are by definition private regimes with their own behavioural rules, mode of governance, standards (pricing in particular but not exclusively) and sanctions for failure to comply. Competition law in almost every regime casts these cartels as illegal and prohibits them (while simultaneously either remaining silent or expressly facilitating export cartels directed at non-domestic markets). They raise difficult if not intractable problems for law enforcement because they are by definition secret making it difficult to prove their existence – hence the recent proliferation of leniency programmes which encourage whistle-blowing by companies or individuals in return for immunity or a reduction in fines for breach of the rules. The application of the cartel prohibition is also difficult because market behaviour can prima facie look cartel-like but in fact constitute legal (from a competition perspective) conduct. This can be true in particular in relation to the conduct of trade associations which can be responsible for self- and co-

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regulation in an industry e.g. through certification regimes that ensure compliance with agreed industry standards. Trade associations can exchange information about the industry – the issue in the competition sphere being at what point does that information constitute a breach of competition law because the level of information dampens competition inappropriately. The aim of this paper is to explore the boundaries between regulation (in particular TPRER) and competition law in relation to cartels. Focussing primarily on EU competition law, it will set out the key features of cartels and leading case law concerning trade associations in the competition sphere. It will then examine the key mechanisms employed to mark the boundaries between cartels and appropriate activities for trade associations before concluding.

3 Assessing the Impact of the Global Financial Crisis on Regulatory Governance: The Case of Public-Private Hybrid Regulatory Institutions. Edward Cohen Westminister College

ABSTRACT A central aspect of the spread of regulatory capitalism has been the creation of a variety of hybird institutions and arenas in and through which public and private agents can collaborate to develop regulatory standards. At the global level in particular, these sites have played a central role in shaping and diffusing standards in the context of multiple, overlapping, and competing claims for jurisdiction. In fields such as financial regulation, commercial law-making, environmental protection, and food safety, these institutions or sites have brought together state officials, affected industries and firms, and professional experts to work out shared understanding of the standards and norms that should guide public and private action within and across states. Such arrangements have proven very attractive to these actors. Their opacity and flexibility in institutional operation and membership allow actors to develop and revise regulatory standards without a great deal of oversight, while their multiplicity allows powerful actors to pursue forum-shifting strategies to shape regulatory discourse and practice at a global level.

In this paper, I explore the impact of the global financial crisis on the future of these institutions. Over the past two years or so, we have seen increased demands for transparency in regulatory process, significant calls for a reassertion of public control over private actors, and an expansion in the number of states (i.e. the emergence of the G-20) actively involved in the governance of the global economy. These pressures may work to constrain the role of private/public sites, or may lead powerful actors to attempt to reinforce their capacities and roles. I focus on the area of commercial law-making, but will propose a framework for exploring this question that is applicable more broadly to the future of these hybird sites of global regulation.

4 Competition (But Not Too Much?) Among Non-Governmental Regulatory Programs Errol Meidinger SUNY Buffalo

ABSTRACT A growing amount of modern regulation is conducted through non-governmental regulatory programs, and most regulatory domains include several such programs. These are typically in some competition with each other for regulatory clientele and public confidence. Most research has concentrated on individual programs and their relationships with regulated firms, leaving inter- program dynamics poorly described and under-theorized. This paper provides an overview of regulatory competition in the forestry and food sectors. It argues that non-governmental regulatory programs are both competitive and interdependent and should be viewed as participating in larger regulatory systems. The paper offers some working hypotheses regarding inter-program competition and briefly considers the potential usefulness of regime, network, organizational field, and ecosystem models for understanding inter-program dynamics.

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Panel 4I Harnessing Non- State Capacity

1 Will the economic crisis induce the use of social pacting as a strategic mode of adjustment across the EU Aidan Regan University College Dublin

ABSTRACT The economic crisis is a collective action problem. Countries in the European Monetary Union (EMU) do not have recourse to currency devaluations. This is particularly affecting small open regional economies of Europe such as Ireland, Greece, Portugal and Slovenia. Faced with high public deficits and growing debt to GNP ratios many governments are now faced with the painful social process of downward wage flexibility. Competitive wage devaluations are replacing currency devaluations. To achieve this coordination between incomes and fiscal policy, governments can either act unilaterally or engage in a tri-partite process of negotiated reform with employers and labour unions. During the 1980’s and 1990’s 14 different EU countries adopted 34 social pacts as a strategic adjustment strategy to burgeoning problem loads. These macro level problems included high levels of structural unemployment, heightened international competition and growing debt to GNP ratios. The type of pact adopted was mediated by country specific institutions and regulatory frameworks but all responded to some macro level crisis. What was unique about these social pacts was the strategic involvement of government. It was not a Keynesian bargain of wage restraint for social investment but a monetarist bargain of wage moderation for fiscal restraint. The focus was on adjusting incomes policy, fiscal policy, and labour market policy to a new macro-economic context. Are coordinated social pacts a more effective governance mechanism to deal with economic crises than government led adjustments? Is there are a trade off between minimising socio-political conflict and adopting a short sharp fiscal correction? These questions are particularly important for regional open economies in the EMU. The Netherlands, Slovakia, Lithuania and Slovenia amongst others have adopted tri-partite agreements as a strategic response to the crisis. Yet, Ireland, a country that has adopted seven pact agreements to date, has not. What are the institutional, economic and political conditions that explain this difference? Drawing upon a database (Institutional Characteristics of Trade Unions, Social Pacts and Government Intervention) hosted at the Institute of Labor Studies – Amsterdam, this paper will present an empirically grounded theoretical explanation on the emergence and institutionalisation of social pacting. It will draw upon the work of Elinor Ostrum to empirically investigate the economic crisis as a collective action problem. It will identify the necessary and sufficient conditions under which social pacts emerge and will conclude by asking whether under these conditions we can expect to observe a new ‘third wave’ surge of social pacting aimed at employment creation across the EU.

2 Policy Capacity in an Age of Crisis: Business Associations and the Coordination of Industrial Success Ana Maria Evans Instituto de Ciências Sociais

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ABSTRACT The global financial and economic crisis has triggered intense debates among scholars and policy makers on the models of capitalist regulation that are most adept to reconcile economic efficiency with institutional credibility, social participation and welfare. Notwithstanding the key contributions by comparative political economy for our knowledge on the influence of societal organisation and policy networks over trajectories of adjustment (Hall & Soskice 2001; Amable 2003; Hall & Thelen 2009), we still lack a comprehensive understanding of the constructive elements and the political action involved in processes of industrial reform which bypass the hand of the state and are steered by collective organisation. This is the primary goal of my research. Through in depth historical analysis, I compare the politics of coordination which has secured the relative economic position of the small retailers of the Portuguese pharmacy sector with the dynamics that explain the fast decline of small firms in agricultural sectors which received massive funds from the state through programs funded by the European Union.

3 Politics, Labor, Regulation, and Performance: Lessons from the Privatization of OTE George Pagoulatos, Nikolaos Zahariadis Athens University of Economics and Business; University of Alabama at Birmingham

ABSTRACT We seek to understand the impact of privatization in Greece by examining the country’s flagship project, the gradual privatization of the Greek Telecom (OTE). We use modeling to assess changes in regulation and labor relations, brought about by OTE’s privatization, on the company’s economic and social performance. Following Durant et al (1998), we differentiate between two types of performance: one that reflects market values and affects the company’s management, including rate of labor productivity, capitalization, profitability, and technical innovation; and another that reflects social values and affects society, including call failures, network reliability, installation time, and directory assistance. We ask: What is the impact of weak regulation and troubled labor relations on OTE’s market- and social-based performance? We argue that shifting degrees of political involvement through regulatory intensity and labor relations refract the hypothesized beneficial effects of reductions in state ownership. Regulatory intensity (not just scope) and labor relations mediate the results, making them far less beneficial under certain conditions.

4 From New Public Management to Public Value. An examination of how programs of voluntary self-regulation build public value and contribute to regulatory growth. Christopher Walker New South Wales University

ABSTRACT This paper examines models of voluntary self-regulation to consider if such applied examples of public policy illustrate the mobilisation of Moore’s (1995) concept of ‘public value’ as shaping public sector management strategies. The regulation literature has extensively examined the influence of New Public management (NPM) practices in orientating public sector preferences towards regulatory solutions (Christensen and Laegreid 2006). This analytical approach has value in explaining the growth of independent regulators to oversee privatised industries and the general preference of agencies to draw on regulatory action to shape markets and stimulate competitive service provision (Jordana and Levi-Faur 2004; Majone 1996; Vogel 1996).

However, neoliberal interests in the expansion and development of markets is only one of a number of factors contributing to the explosive growth in regulatory interventions. Concerns for safety, rights and environmental protection have also generated huge growth in social regulation (Moran

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2001). Whilst NPM and regulatory capitalism are helpful in explaining the growth of regulatory governance (Levi-Faur 2005), analysis of policy practice suggests a broader range of concerns are at play shaping agency responses and their preference for regulatory solutions.

This paper applies Moore’s (1995) model of ‘public value’ to a program of voluntary self-regulation in the Australian trucking sector and examines its explanatory value for understanding regulatory growth. Self-regulatory strategies readily fit into a public value framework. They are seen as operationally feasible, drawing on limited state resources. Regulatees more readily accept them and when supported by government agencies the authorising environment (consisting of public and private interests) steadfastly confirms their legitimacy as acceptable methods for promoting and managing compliance.

Drawing on empirical data from interviews with industry auditors and regulators discussion examines how external parties are drawn into the regulatory process to build compliance capacity and enhance the social and economic value of public policy programs. Does the concept of public value provide useful insight into understanding the forces that are shaping the explosive growth in regulation and the ongoing shift towards regulatory governance? How useful is this analysis in an age of crisis? And does this help explain why often discredited models of ‘light touch’ regulation are still promoted as options for progressing the policy objectives of the state?

5 Articulated vs Disjointed Corporatism: The Impact and Implications of Trade Union Strategies Oscar Molina , Roland Erne Universitat Autònoma de Barcelona University College Dublin

ABSTRACT We examine the impact that recent trade union strategies of political action had on their internal government. This question involves a shift in the lenses used in the analysis of social pacts in the 1990s from a focus on the content of agreements towards a closer inspection of the implications for trade union governance. Corporatist and elitist theories have stressed the existence of a trade-off between external strategic action and internal democratic processes. In this vein, the recent strategic move of unions towards political action would have undermined their democratic basis. We develop a two-dimensional model of trade union democracy with a vertical (participatory) and horizontal (pluralist) dimension. The analysis of four social pact countries serves to reject the disjointed corporatist scenario which claims the existence of a trade-off between greater strategic capacity and lower internal democracy. A more articulated picture of trade unions comes out of the analysis consisting in new equilibria between external action and internal democracy. However, we observe an extension of participatory mechanisms which contrasts with the decline of the pluralist dimension of trade union democracy.

Panel 5A Governing Irish Companies

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1 State Responses to the Irish Banking Crisis: A Grand Experiment in Corporate Governance Theo Lynn, Ruchira Sharma, Blanaid Clarke Dublin City University Business School

ABSTRACT Corporate governance literature has largely converged upon internal monitoring and shareholder activist strategies as methods of shareholder protection following the decline of the market for corporate control. Commentators and activists alike have generally neglected the opportunity for an independent party, which watches over the management of companies, to guard shareholders’ interests. Ireland and the UK are two countries where the value of media coverage of corporate governance violations to a number of key company stakeholders has not been assessed. This paper considers the various reactions to media coverage of corporate governance violations and proposes that the news media influences the corporate governance practices of public limited companies (plcs) listed on Stock Exchanges in Ireland and the UK. Using a range of sources, media coverage of corporate governance violations may be analysed and measured and the relationships between this activity and the actions of (i) company directors and management, (ii) policymakers and (iii) investors examined through interviews and analysis of company documents, government reports and stock market data.

Emerging evidence suggests that the Irish media influences (i) the boards of directors of Irish listed plcs, in that reformatory measures are taken by the boards in the vast majority of violating companies studied; (ii) the government authorities who are responsible for the legislative and regulatory infrastructure in which they operate, with statistical evidence of increases in government attention to corporate governance issues following increased newspaper coverage of theses issues and (iii) the investing decisions of investors in Irish listed plcs, with statistical verification of a relationship between movements in share price and volumes of newspaper articles relating to violations by listed companies providing avenues for more exploratory research into how news from print, broadcast and online media influences corporate governance in both Ireland and the UK.

2 The Influence Of The News Media On The Corporate Governance Practices of Irish And UK Listed PLCs Louise Gorman, Theo Lynn, Mark Mulgrew Dublin City University Business School

ABSTRACT Corporate governance literature has largely converged upon internal monitoring and shareholder activist strategies as methods of shareholder protection following the decline of the market for corporate control. Commentators and activists alike have generally neglected the opportunity for an independent party, which watches over the management of companies, to guard shareholders’ interests. Ireland and the UK are two countries where the value of media coverage of corporate governance violations to a number of key company stakeholders has not been assessed. This paper considers the various reactions to media coverage of corporate governance violations and proposes that the news media influences the corporate governance practices of public limited companies (plcs) listed on Stock Exchanges in Ireland and the UK. Using a range of sources, media coverage of corporate governance violations may be analysed and measured and the relationships between this activity and the actions of (i) company directors and management, (ii) policymakers and (iii) investors examined through interviews and analysis of company documents, government reports and stock market data.

Emerging evidence suggests that the Irish media influences (i) the boards of directors of Irish listed

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plcs, in that reformatory measures are taken by the boards in the vast majority of violating companies studied; (ii) the government authorities who are responsible for the legislative and regulatory infrastructure in which they operate, with statistical evidence of increases in government attention to corporate governance issues following increased newspaper coverage of theses issues and (iii) the investing decisions of investors in Irish listed plcs, with statistical verification of a relationship between movements in share price and volumes of newspaper articles relating to violations by listed companies providing avenues for more exploratory research into how news from print, broadcast and online media influences corporate governance in both Ireland and the UK.

3 Replacing 'Comply or Explain' with Legally Binding Corporate Governance Codes: An Appropriate Regulatory Response? Deirdre Ahern Trinity College Dublin

ABSTRACT At present, like the position in the United Kingdom, compliance with the Financial Reporting Council’s Combined Code on Corporate Governance by companies listed on the Irish Stock Exchange is on the principle of ‘Comply or Explain’. However, in the midst of a period of economic downturn and financial scandals involving banks, it was considered that there was a need for binding codes of practice to be put in place to ensure high standards of corporate governance. Accordingly, the Corporate Governance (Codes of Practice) Bill 2009 aims to provide for the drawing up by the Central Bank and Financial Services Authority of binding codes of practice in relation to good corporate governance which will apply to Irish listed companies and for ministerial approval. This paper will examine whether these proposals for legislatively-backed corporate governance codes constitute an appropriate regulatory response and will consider the regulatory consequences for companies and regulators including the enforcement role which it is proposed to assign to the Irish Stock Exchange and the Central Bank and Financial Services Authority of Ireland.

Panel 5B Governing Nanotechnologies: From risk regulation to the governance of Innovation II

1 Regulating nanotechnology: preliminary results of a transnational comparison of stakeholders’ opinions Simone Arnaldi University of Padua

ABSTRACT Abstract unavailable currently

2 Regulatory lessons from nanomedical regulation

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Bärbel Dorbeck-Jung, Nupur Chowdhury University of Twente

ABSTRACT Abstract unavailable currently

3 REACHing Down: European Nanotechnology Regulation in the Chemicals Arena Robert Lee, Steven Vaughan Cardiff University

ABSTRACT Abstract unavailable currently

Panel 5C Regulating for Sustainability by Integration

1 The Common Transport Policy – a sustainable policy? Helene Dyrhauge University of Leeds

ABSTRACT The Sustainable Development has become a key policy for the EU, where every initiative has to be supported by an environmental impact assessment. This indicates that all policy fields have accepted the premises of sustainable development and that DG ENV is no longer seen as a periphery policy obstructing the main industrial and commercial policies. The paper, therefore, examines if the Sustainable Development agenda has had any impact upon the Common Transport Policy. Transport by nature has a negative impact on the environment but the European Commission has adopted a “sustainable mobility” policy, where it aims to mitigate the transport sector’s negative impact. This translates into initiatives such as reducing emission for airlines, internalization of external cost in the road-haulage sector and changing the modal-split from road to railways, which aims to reduce transport’s negative impact upon the environment. The paper argues that these regulatory initiatives are not addressing the issue of sustainable mobility because of the inherent differences between environmental and transport policies with regards to regulating negative environmental impact whilst at the same time increasing mobility. These contrasting policy priorities have previously been seen in the relationship between DG TREN and DG ENV, which has not always cordial because of their different policy priorities. The paper therefore examines if Sustainable Mobility Policy has lead to a policy convergence between the two Directorates General. Overall, the paper contributes towards our knowledge of the inter-institutional relationship within the Commission, by examining the relationship between DG ENV and DG TREN with regards to the Sustainable Development agenda. Moreover, it contributes towards our understanding of the Commission’ commitments to the sustainable development. Finally, the paper aims to conclude that while DG TREN has adopted some sustainable policies its main priority is still an efficient infrastructure and not the environment.

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2 Integrated Marine Governance: rethinking accountability and legitimacy Jan van Tatenhove Environmental Policy Group (WUR)

ABSTRACT Marine ecosystems are threatened by several economic activities, such as fisheries, commercial shipping, oil- and gas production, offshore windmill parks, tourism etceteras. The specifics of these marine activities (varying from fixed static place bound structures to temporary dynamic activities in a three dimensional space), combined with the fragmented regulatory systems of governance of sectoral marine activities hinders to find solutions for several environmental problems, such as the overexploitation of non-renewable resources, the destruction of ecosystems and the exceeding of the waste repository system. An important initiative to enhance the optimal development of all sea- related activities in a sustainable way, based on an ecosystem-based marine management system, is the EU Integrated Maritime Policy (IMP). IMP demands novel institutional arrangements, the inclusion of new actors, levels and steering mechanisms. More general, forms of integrated marine governance will raise new questions about the participation of actors, the power relations between these actors, and the legitimacy and accountability of marine governance arrangements. This paper aims to discuss the constraining and enabling conditions for integrated marine governance and the possibilities to realize an integrated marine policy. After a discussion of marine governance arrangements, the paper will discuss the possibilities for developing EU Marine Spatial Planning (MSP). An important challenge for the years to come is to understand the different institutional dynamics of the sectoral marine policy domains, and to design legitimate and accountable integrated region-oriented marine governance arrangements. The second part of this paper will discuss new relations and forms of legitimacy and accountability in integrated marine governance arrangements.

3 Global Financial Crisis versus Climate/ Environment Crisis Tan Seck Leng National University of Singapore

ABSTRACT There is no universal agreement on whether or not environmental degradation should be included in macro-economic policy analysis, although there is often a perception that addressing the climate / environment crisis will compromise the economic wellbeing of an economy. The paper argues that assessing macro-economic outcomes differs depending on whether environmental capital is internalized or excluded from the analysis. Given that environmental capital is generally excluded from most analyses, assessments of many macro-economic activities and effects have been mis- stated. The response to the global financial crisis, for example, can be argued to have likely exacerbated the climate / environment crisis. This paper argues that if an agreement can be reached on the role of the environment in the economy, then progress on both the economic and environmental fronts can be achieved. This point is illustrated though reference to empirical evidence from selected economies. An important theme addressed in the paper is the need for eco- environment convergence in terms of the rescue efforts taken in response to the global financial crisis.

4 Governance for sustainability in a globalizing world Alberto Martinelli University of Milan

ABSTRACT The financial crisis has demonstrated that the one-sided globalisation of the market economy without adequate financial and social governance is putting the world at risk. Speculative financial

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strategies pursued with new and unregulated vehicles have evaded ineffective national control and slack international financial regulation. Major disequilibria have arisen between exporting countries with high rates of savings and balance of payments surpluses like China and Japan, on the one hand, and consumer countries with huge public debt and commercial balance deficits like the United States. Both the financial and the ecological crises are today a traumatic manifestation of the basic contradiction in contemporary globalisation between increasing economic interdependence and continuing political fragmentation. Our article takes stake of core arguments in some of the most central governance traditions and discusses their capacity to deliver solutions. In analytical terms much of the governance debate around three institutional anchors: Government, Markets and Civil Society, or their combinations, which translates into a debate about different modes of coordination and regulation. Governance, in this understanding, is about combining and striking the relative balance between authority and hierarchical control versus exchange and transactions, and solidarity and norms in a globalising aren. Our article starts with an appraisal of the strengths and weaknesses of the ideas of market-driven, state-led and civil society-led governance, but also factors in the effect of media and communication as governance arena in its own right. Our article reviews core arguments put forward in broader approaches to governance where several governance mechanisms are combined. Out of the critical analysis we distil an approach to governance that combines three basic elements: Firstly, a re-interpretation of Montesquieu’s principle of checks and balances – not applied only to state institutions, but to the interplay between the state, business/markets and civil society. Secondly: an argument for poliarchic multilevel governance, where semi-strong flexible institutional frameworks at various levels of aggregation allow actors to jointly engage in developing governance. Thirdly: we assume that open communication may constitute an important governance element, both for empowerment of new actors, as an agenda setter, and as a trigger for other institutional arenas. We end by recognising that global governance, going forward, will include a mix of parallel governance models, partly competing for hegemony, but also partly supporting one another.

Panel 5D State Structures and Public Sector Organisation I: Constitutional Pressures and Constraints

1 The Politics of Institutional Design in Parliamentary Democracies Kutsal Yesilkagit Ultrecht University

ABSTRACT Students of political control have repeatedly underscored the dynamic nature of bureaucratic autonomy. The level of bureaucratic autonomy of agencies is said to systematically vary with the advent of a new political coalition, (threat of) budget changes, and the (political) appointment of

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new agency heads. This paper tests the effects of changes in the political saliency of policy issues as an alternative to these explanations. The judgments related to complaints on race and religion issued by the Dutch Equality Body between 1994 and 2008 form the empirical basis of this study. This paper will examine the extent to which the judgments of the Dutch EB were affected by the rising saliency of issues related to (Muslim) immigrants and Islamic fundamentalist terrorism after 9/11.

2 States Under Pressure: Institutional Adaptation to New Policy Challenges Niamh Hardiman, Per Lægreid, Muiris University College Dublin MacCarthaigh, Paul Roness

ABSTRACT Governments’ approach to policy making and implementation depends not only on the preferences of the party or parties in power, but also on the institutional capacity of the state to formulate and deliver policy and to do so effectively. Governments may therefore need to find new means of addressing emergent policy challenges that involve institutional adaptation and innovation. This paper uses national time-series databases of state institutions for both Norway and Ireland to analyse the shifts in the structure of state institutions that have taken place in response to new policy challenges. We take two policy instruments that entail institutional changes – regulation, and privatization; and two substantive policy areas in which significant new demands on state capacity have been experienced – health care, and immigration. The comparative research design enables us to probe the reasons for similarity and contrast in state responses in the two countries.

3 Separation of Powers and Administrative Red Tape Colin Provost, Victor Lapuente Gine University College London, Goteborg University

ABSTRACT The financial crisis of the late 2000s caused numerous bank failures, particularly in the United States, but many analysts are still determining the precise causes of these failures. One commonly held belief is that the ability of bankers to choose their regulator enables to choose the most lax one, thus resulting in a regulatory race to the bottom. Prior to the financial crisis, commercial banks could be regulated by the Office of Comptroller Currency (OCC) as regular commercial banks, or they could switch their designations to “thrifts” or “savings and loans” and be regulated by the Office of Thrift Supervision (OTS). Additional anecdotal evidence suggests that some banks converted from federal to state charters in order to avoid the more strict regulatory touch of the OCC. In this paper, I examine both banks that failed and survived during the financial crisis, in an attempt to determine the effect of different regulatory regimes. In particular, I focus on the banking departments of different states, as well as the Office of Comptroller Currency and the Office of Thrift Supervision.

4 Rhetoric of Regulation: How US Public Service Commissions Define Their Mission Janice Beecher Michigan State University

ABSTRACT Each of the federal and state public utility commissions publishes a statement of mission or vision, often accompanied by elaboration of agency purposes or goals. At one level, mission statements are only what they are: a public articulation of collective philosophy to the consumers they serve, the utilities they regulate, the professional staff they employ, the political bodies to which they are accountable, and other stakeholders in the process. Of course, mission statements may or may not

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translate to or correlate with actual decision-making behavior on the part of regulators. However, mission statements are of academic and practical interest in terms of the rhetoric of regulation. Agency mission statements communicate how regulators perceive their role and purpose and they change with time. After a century of ?traditional? regulation, the commissions are exhibiting a remarkable capacity for adaptation, at times apparently contradicting long-held theories. Once concentrating on the core principle of regulation in the public interest, today?s mission statements reflect how regulators conceive a modernized regulatory role that is responsive to traditional market failures but also to evolving conditions and demands. A preliminary analysis is revealing. First, the commissions devote considerable and thoughtful attention to their missions and the associated goals of their agencies. Second, the mission is meaningful in that it conveys a substantive message to the providers and consumers of utility services. Third, and most importantly, the commission missions reflect a clear paradigm shift with respect to incorporating new rhetoric associated with emerging market conditions and public policy mandates. This paper will present a comprehensive content analysis of contemporary commission mission statements with a basic analysis of variation and a discussion of implications for regulatory politics and policy.

Panel 5E Regulatory Responsibilisation

1 Lifestyle regulation Stavros Zouridis, Meike Bokhorst, Rik Peeters Tilburg University

ABSTRACT Public administration increasingly regulates the behavior of its citizens by codifying standards for a person’s lifestyle as legal norms and legal obligations. In Dutch public administration we observe a trend towards more legal norms exactly prescribing how a good citizen should behave, how people should live as healthy citizens, and how people should raise their children. Regulation on these issues has always more or less been a concern of government, but recently government has resorted to legal norms to regulate people’s lifestyles. We observe new kinds of soft law and hard law that regulate how people should behave. These kinds of lifestyle regulation aim at good citizenship,, a healthy lifestyle, responsible parenting, and austere management. In general, several EU member states increasingly define a citizen’s lifestyle as a legal obligation.

In our paper, we analyze this trend towards lifestyle regulation by means of legal norms. In the first part of the paper, we describe the kind of behavior that is increasingly regulated by legal norms and legal obligations. We also analyze the way these legal norms are formulated. By connecting the nature and status of these new legal norms with general theories of legal norms and legal obligations, we aim at a better understanding of this new phenomenon. In the second part of our paper we concentrate on the explanations and implications of this trend towards lifestyle regulation. Why does public administration deploy legal norms and legal obligations as instruments for social engineering? We then explore some implications of this trend. We especially focus on the implications this trend might have for the relationships between citizens and

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public administration and the legitimacy of law and public administration.

Outline of the proposed paper

1. Introduction: object and perspective of the paper 2. Regulating people’s behavior by legal obligations: current trends and practices in several EU member states 3. Lifestyle regulation and the nature of legal norms and legal obligations 4. Why lifestyle regulation: why does public administration deploy legal norms for social engineering? 5. Implications of lifestyle regulation: how does lifestyle regulation affect the relationships between citizens and public administration and the legitimacy of law and public administration? 6. A transformation of the constitutional state? Concluding observations, issues, and questions

2 Cui Bono? A Critical Analysis of the development of the Irish National Quality Standards for Residential Care Settings for Older People in Ireland Ciara O' Dwyer Trinity College Dublin

ABSTRACT We are living in the era of the Regulatory State, yet little is known about the processes used to develop the regulations pervading our lives and way of living. More and more often, regulations are developed through a collaborative approach, which suggests that power (and responsibility) is ultimately being passed from governments to regulated entities and consumers. This paper sets out to develop our understanding about how “regulation after crisis” operates in practice. In 2005, a documentary broadcast on Irish television showed the systemic abuse of residents in a privately-run residential care home for older people, Leas Cross, which caused public outcry. In response, the Irish government announced its intention to improve the quality of nursing home care. It established a new, independent regulator, which established a 34-member Working Group to develop a set of minimum care standards. The Working Group was made up of many relevant stakeholders from the residential care sector. The development process also involved an extensive public consultation process. Regulations underpinning the Standards were subsequently drawn up by officials within the government’s Department of Health and Children. The first inspections under the new regime began in September 2009. Based on documentary analysis and interviews with relevant stakeholders, the study suggests that the reaction to “Leas Cross” led to standards characterised by an uneasy tension between risk avoidance and the personal autonomy of care home residents. In addition, the Standards have been underpinned by weak legislation, which has effectively rendered the regulator powerless to improve care homes. While it is perhaps not surprising that regulation developed too quickly in response to a crisis may be weak, what is noteworthy in this case is the positive reaction to the Standards. While the benefits care home residents will accrue remain to be seen, it is clear that the government remains firmly in control.

3 Permission after Respect: Informal youth work and the impact of assessment through regulatory success Deirdre Duffy University of Nottingham

ABSTRACT The development and implementation of the Respect Agenda has had the most significant effect on young people. Under the broad headings of reasserting ‘good’ and ‘bad’, the need for young people

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to become more responsible and self-regulate more, and that the rise in crime was due to a lack of common decency and respect inherent to the youth population, policy-makers introduced a series of civil or soft-law mechanisms for limiting and punishing certain activities such as Acceptable Behaviour Contracts, Parenting Orders and Anti-Social Behaviour Orders - all of which have been used most frequently against those under the age of 25. The effect of this “punitive turn” in social policy, the associated growth of regulation through welfare and the formalisation of dominant normative expectations of ‘acceptable’ behaviour (see: Squires, 2005; Flint and Nixon, 2001; Parr, 2009) have all been explored in great depth, with a particular focus on the relationship between the ‘macro’ – policy-making - and ‘micro’ – social - levels of ‘regulation through responsibilisation’. However, substantially less attention has been paid to the ‘meso’ level of youth policy – the practice of youth work. Though a core element of the Respect Agenda’s treatment of youth crime and anti- social behaviour (ASB) was the notion that through investing in, promoting and – where necessary – compelling young people to become active members of their community ASB would be lessened, few studies have looked at how this has impacted upon the practice – and praxis – of youth engagement agencies and initiatives. This paper will therefore explore the impact of the Respect Agenda on the ‘lived experience’ of youth policy, what the responsibilisation now embedded within youth policy approaches actually means for youth work and question whether this is that radical a shift. Overall my argument here is that youth workers in informal youth participation initiatives are now expected to take on the role of both regulator and facilitator by both allowing young people to develop social skills which are, according to Respect, inherently positive, and restricting their activities to an ill-defined set of behavioural norms. Comparing experiences from ethnographic fieldwork at an inner-city youth club with programmes such as the Youth Taskforce Action Plan (Department for Children, Schools and Families, 2008), this paper demonstrates how the lack of consideration given to the actual process of youth engagement, versus what the impact of this engagement should be, has led to often internalised conflicts and ruptures in the practice of youth work.

4 Regulating-for-welfare: A Comparative Study of "Regulatory Welfare Regimes" in the Israeli, British and Swedish Electricity Sectors Hanan Haber Hebrew University

ABSTRACT The regulatory state and the welfare state are two institutions which seldom meet. The regulatory state is seen as focused on market failures and trust-busting, while the welfare state is said to shield citizens from the negative redistributive effects and externalities of the market. This paper explores the relations and boundaries between the welfare state and the regulatory state in the electricity sectors in the UK, Sweden and Israel. It demonstrates the emergence of social policy in a place where such policy should, according to conventional wisdom, not exist at all: within the context of liberalised, privatized and (de)regulated electricity sectors. This paper finds that the boundaries between the regulatory state and the welfare state are blurred in the two countries with liberal welfare regimes (Israel and Britain), but not under the social democratic regime of Sweden. The implications of these findings are then discussed with the aim to better understand the limits of the neoliberal project.

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Panel 5F Investigating Private Food Standards and Quality Governance: Case Studies

1 The Globalisation of Standard Setting Activities in Agri-Food Sectors: a governance perspective Armelle Maze AgroParisTech

ABSTRACT The aim of the paper is to propose, based on recent development in New Institutional Economics, a comparative analysis of the alternative governance mechanisms supporting the initial design and the development of Good Agricultural Practices (GAP) Guidelines as food safety standards in the agricultural sector. Over the last decade, the development of private global standards set up by large international retailers have attracted much attention in the academic litterature as they seemed to propose a possible shift in food safety governance from public towards private or fixed forms of regulations. One of the major initiative in this area is the development of a global private standard set up by a consortium of North European large retailers, called the Global/EurepGap system. Recent researches in international law and political science especially focuses on issues related to the legitimacy and the accountability of such private global consortium compared to other formal international standard setting organisations. Our contribution is here to consider the effectiveness (in terms of time and scope) of such private global standards to compared to other existing private quality assurance schemes and agri-environmental standards already implemented by european farmers. Empirical data is based on a participative field research conducted with applied agricultural R&D organizations in Northern France in charge of developing methods and tools for the adoption and implementation of GAP guidelines & quality assurance scheme by farmers, interviews with GlobalGap managers and a field survey with certification bodies. One of the paradoxes of such private global standards is that tend to report much stronger requirements than those set up by public standards, even in european countries. Our analysis demonstrate that the optimal design of GAP guidelines can be analysed as the implementation of a simplified HACCP methodology which is at the core of european food safety regulation (Demortain, 2007). We show that such adaptation is still subject to an implicit trade-off between the scope of requirements to be applied by farmers and the prioritization of corrective actions in sensitive topics as required by the HACCP methodology, trade-off which should be better taken into account in terms of public policy and in term of private governance of standard setting activities in the agricultural sector. We derive some conceptual and organisational issues attached to the actual design of international standard setting organisations in the agricultural sector

2 Food quality through networks: data from a European research on wine Federica Casarosa, Marco Gobbato European University Institute, Universita di Trento

ABSTRACT In recent time, state regulation concerning food safety and quality has been progressively replaced by self- or co-regulatory arrangements requiring companies, within the whole food chain or in a

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given phase, to implement their own food safety and quality systems. This shift, encouraged by States that rely on higher compliance to private regulation, has triggered the adoption of private standards drafted by private firms within the food chain. These standards mainly relate to food safety, but they can also focus on food quality standards, which move from the default level defined by 'safe' products towards a higher one where also the decision concerning the type products and the methods of processing can become an added value embedded in the final product. In this latter case, the standards are usually beyond the requirements set by public standards, for instance, defining more stringent or more extensive rules concerning the selection of raw materials. Additionally, quality standards may extend vertically controlling either upper or lower layers in the value chain.

The purpose of this article is to analyse a sector where quality standards have a fundamental role, namely the wine sector, in order to show the evolution that also this kind of private standards has passed through and to verify how private companies has defined their quality standards within the supply chain, focusing mainly on transnational ones. Our intent is to provide evidence of the different models of networks that companies build up in order to achieve quality also focusing on the devices used to coordinate the supply chain and to monitor the activities carried out at different layers.

3 The Market for Halal Certificates Frans van Waarden, Robin van Dalen Ultrecht University

ABSTRACT With the growth in food exports from non-Muslim to Muslim countries, and the migration of Muslims to Western non-Muslim societies, Muslims buy food more and more from, or within, non- Muslim societies. This creates problems of risk and uncertainty for them: Can they trust the food available to them to be in line with their religious teachings? Is the food Halal or Haram? Governments in non-Muslim countries have not considered it their task to publicly regulate religious food standards. In the absence of such regulations, and of trust between customer and supplier - more difficult as food chains become longer - there is a need for information and certification about food products and the processes they may have undergone. This market niche has given rise to a variety of suppliers of such information, of various degrees of commercialization. The emerging market for Halal certification has in the meantime already exhibited many of the problems and excrescences familiar of new unregulated markets: fierce and unfair competition, intransparency, fraud, excessive pricing, the lemons problem, etc. The Turkish Halal certification association GiMDES detected at least 30 private certifiers in the Netherlands ‘which issue fake Halal certificates’, found also ‘cases of excessive pricing’, and of cheating Muslim consumers with ‘unauthorized certificates’ (Turkish E- Gazette Sunday’s Zaman, Jan. 12, 2010), leaving it in the middle which authority could have authorized them. Our paper gives an overview of the Dutch market for Halal certificates (relating it to the global market for it); discusses a number of typical problems on such a market of information and private certifying regulation: establishing reputations and credibility, securing funding, organizing inspections and effective enforcement, developing credible sanctions, managing diversity (there are different degrees of Halal as well as different teachings and different degrees of strictness), fighting fraud and ‘Halal laundering’, avoiding that bad products drive the good ones from the market, the absence of obvious authorities in the very heterogeneous and decentralized Muslim community, etc. Finally the paper investigates a number of solutions that have been tried to counter such problems, including accreditation by foreign organizations in some Muslim countries like Turkey or Malaysia. In passing we will also make comparisons with other similar certification markets, varying from bio-

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food to sustainable fishing and - recently current - financial products.

4 Power and the Food Supply Chain: Proprietary and Hybrid Governance in Australia and Europe Carol Richards, Hilde Bjorkhaug, Geoff Lawrence University of Queensland, Centre for Rural Research Trondheim

ABSTRACT Food scandals throughout Europe, the US and beyond have been the catalyst for new forms of food governance that seek to either supplement, or replace, government-led regulation with private, and hybrid public-private, forms. While responsibility for food safety has moved from the policing of the food chain by the state, to reliance on private actors, there nevertheless remains a plethora of different models and approaches. Globally, these include direct government regulation and monitoring, proprietor-led schemes run by major supermarket chains, and ‘whole of chain’ governance (with the latter incorporating an element of state governance, but in a diluted form). Taking a case study approach, we examine the UKs ‘Red Tractor’ and Norway’s ‘Nyt Norge’ (Enjoy Norway) Quality Assurance Schemes and compare these to Australia’s proprietor-driven model. We pay special attention to the power of farmers in the supply chain across these different forms of food governance. We conclude that the ‘whole of chain’ schemes that exist in parts of Europe reflect a sophisticated and more democratic model of governance when compared to proprietary-led schemes.

Panel 5G The Politics of Financial Regulation in Emerging Markets

1 Bringing Parties Back In: The Institutional Foundation of Securities Market Regulation in Southeast Asia Xiaoke Zhang University of Nottingham

ABSTRACT Emerging market countries have been under intense systemic pressure to enact strong securities market rules. One prominent theoretical and empirical question that has commanded a great interest among scholars and policy-makers alike is why there has been significantly cross-country variation in the effectiveness of rule enforcement. This paper seeks to develop a political party- based approach to examining this question. More specifically, it emphasises the complex interplay of two intra-party variables—organisational cohesion and state-society linkages—as the major determinants of financial regulatory efficiency. The paper posits that governments operating through cohesively organised and broadly-based parties are more able to commit to enforcing securities market rules than those operating through incohesive parties with narrow ties to society. This proposition is sustained through a comparative analysis of securities market regulation in

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Southeast Asia since the Asian financial crisis of 1997-98. The major empirical findings suggest that international economic circumstances, particularly market integration and financial crises, need to be viewed in interaction with domestic political structures in order to understand the dynamics of regulatory changes in emerging market countries.

2 Global Ideas, Local Uncertainty: Financial Supervisory Independence from London & Basel to the Emerging World? Christopher Gandrud London School of Economics

ABSTRACT How influential are prominent jurisdictions in the international financial system for actually changing regulatory policies in less prominent emerging countries? If they are influential, what mechanisms leverage this influence? This paper aims to explore these questions. It focuses on a specific policy and context, the adoption of financial supervisory independence between 1990 and 2007. Two theories of policymaking independence are tested against each other. The first--veto players--posits little or no relationship between where a country is positioned in the international economic system and its likelihood of adopting supervisory independence, rather than central bank of ministry of finance based regulation. The second--McNamara and Blyth's sociological institutionalism--argues that when less prominent jurisdictions face uncertainty about how to achieve economic growth because of crisis, they look to prominent jurisdictions for policy templates. An event history analysis of transitions towards the UK Financial Services Authority model is used to test these propositions. It provides evidence that the domestically focused veto players approach is particularly insightful during periods of 'normal politics', i.e. when levels of financial crisis are low and there are clear policy alternatives. However, in times of local crisis less prominent and especially emerging countries adopt globally prominent ideas to overcome means-ends uncertainty, possibly even regardless of their veto players' relative locations.

3 Pension Funds and the Institutional (Re)Configuration of Capital in Latin America Giselle Datz Virgina Tech

ABSTRACT Pension funds in emerging markets are a very regulated and salient set of financial players. However, they have seldom been studied either by the substantial literature on pension reform in Latin America or by works on the "geography of finance", which have stressed the role of institutional investors, yet mostly focusing on OECD countries. This paper furthers economic geographers' contention that pension funds play a key role in global economic transformations. I suggest that they are strategic sites for the analysis of global institutional reconfigurations in a context of international crisis at both the private and public levels. In emerging markets it is important to highlight not only the role of private pension funds (as in Chile and Mexico, and until recently in Argentina), but to also examine the role of pension funds of publicly owned companies, which is significant in both local financial markets and in the real economy. In the case of Brazil an analysis of these wealthy pension funds highlights the ways in which the global crisis has promoted a reconfiguration of investment opportunities and state-markets interactions. The latter can hardly be reduced to a drive towards increased regulation. Recently reforms were passed allowing the highly regulated local pension funds to engage in foreign investment because domestic resilience to the crisis has made it possible to keep local interest rates low. At the same time, the state's power expansion is revealed in its attempt to try and influence pension funds of public companies who are shareholders of privatized enterprises. An analysis of these developments captures a new and extensive web of private-public hybridity that underscores economic change through the redesign of local regulation.

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4 The politics of banking regulation in emerging markets: the pivotal case of China Andrew Walter London School of Economics

ABSTRACT Since the mid-1970s, the major developed countries have agreed general principles for financial regulation and elaborated a range of voluntary but increasingly specific standards relating to various aspects of financial sector supervision and regulation. This paper investigates China's evolving relationship with the Basel regime on banking supervision and how this might be explained. China is a latecomer to financial regulation and has been until recently an outsider in the Basel process, which in other areas of global governance has led it to adopt a critical stance. Most developing countries have also seen Basel standards as biased in favour of developed countries. Paradoxically, however, the Chinese leadership's attitude towards the Basel regime has been much more positive than many would expect. I show that domestic reformers have seen the Basel process as a means of enhancing their ability to promote the reform of China's major domestic banks and to enhance their international competitiveness. This has contrasted with Chinese attitudes towards other areas of global financial governance. Whether this approach continues is likely to be crucial for the evolving shape of the global banking regulatory regime

5 Russia and the Global Credit Crunch: Financial Regulation between the Two Crises Anastasia Nesvetailova, Kiryl Haiduk University of London, University of Trento

ABSTRACT The paper examines the effect of the global credit crisis on the Russian system of financial governance. The paradox of the 2007-2009 crisis in Russia is that unlike its precursor, the default of August 1998, the global credit crunch was not ‘Russian’ in making. Like in many other countries, the credit crunch of 2007-2009, having mutated from an international liquidity meltdown into a global recession, affected Russia primarily through the international liquidity channels. Yet with mounting unemployment, rising inflation and stalled economic growth, its effects on the Russian economy have been devastating and are comparable to the 1998 case. Why then, despite the lessons of the 1998 financial crisis, the presence of formal institutions and relatively tight rules of financial regulation, did Russia become a victim of the 2007-2009 credit melt-down? In this paper we aim to answer this question, analysing the evolution of financial regulation in Russia post-1998, and examining the political economy of Russian financial system in the run-up to the 2007-2009 credit crisis.

Panel 5H Agency in Non- State Regulation

1 Private Actors in Meta-Regulation: the Role of Management Consultants

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Sharon Gilad London School of Economics

ABSTRACT The regulatory role of private-actors – such as self-regulatory bodies, compliance professionals within firms and consumer and environmental groups - is at the heart of recent work in the sphere of regulation. Relatively overlooked, however, is the role played by management consultants in the compliance sphere. This paper draws on management literature regarding the “explosion” of management consultancy and tentative findings from a case study regarding of the UK Financial Services Authority (FSA) ‘Treating Customers Fairly’ (TCF) initiative to conceptualize the possible role of management consultants in regulation. Employing a ‘meta-regulatory’ approach, the FSA required financial firms to interpret what treating customers fairly means in their individual circumstances, to identify what risks their operations pose to the fair treatment of customers, to set out how they will deal with any gaps, and to systematically assess their performance and ‘culture of fairness.’ The findings suggest the FSA’s TCF initiative generated high demand for management consultants’ services by both firms and FSA. One likely explanation for this high demand regards firms’ attempts to make sense of regulatory expectations, and the FSA’s pursuit of unbiased information about the quality of firms’ responses. In addition, TCF arguably called for expertise in organizational-change management, which was beyond the traditional domain of both regulators and firms’ compliance professionals thereby creating demand for consultancy firms’ hybrid expertise in compliance, management and organizational change. Moreover, consultants actively sought to increase demand for their services by exacerbating firms’ perception of the risk of not satisfying the FSA’s expectations, which possibly enhanced managers’ pursuit of risk-reduction. Finally, firms and the FSA’s reliance on management consultants’ services may be a result of their limited reciprocal trust and capacity for dialogue. The discussion and conclusion assesses the likely generalizability of the findings to other meta-regulatory domains.

2 Why Do Firms Fail To Comply With Csr Requirements? An Examination Of Un Global Compact Delistings Jesse Steen Knudsen Copenhagen Business School

ABSTRACT While a substantial literature describes corporate benefits of CSR initiatives, the literature is silent concerning why some companies are asked to leave international reporting frameworks for failing to meet CSR requirements? This article examines 630 companies delisted from the UN Global Compact. One explanation stresses the impact of political-institutional development. A second explanation examines the effect of sectoral characteristics and company size. The article concludes that institutional development in the home country matters. Focusing on France and Spain the article finds no clear relationship between delistings and sector or company size. However, firm size is related to fulfilling more demanding reporting requirements such as the Global Reporting Initiative. Implications for business and policy are discussed in the conclusion.

3 NGOs and litigation: a way to influence public policy in an age of crisis? Environmental and data protection policy compared Hartmut Aden Berlin School of Economics

ABSTRACT Representatives from Non Governmental Organizations (NGOs) and from social movements have more or less successfully tried to reach their policy objectives by litigation before domes-tic and in some cases before European courts. In the paper that I propose for the conference, I will examine such litigation strategies from an

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interdisciplinary political science and legal perspective in two policy fields: environmental and data protection policy. The paper starts from the hypothesis that the way in which NGOs try to promote their targets before courts largely depends on institutional settings, especially on the procedural rules for the access to justice – and in a broader sense on the openness of political systems and of courts to promote the participation of NGOs representing the general public interest. Empirically, the paper is based on a sample of cases in which environmental and data protec-tion NGOs have used litigation strategies before German and European courts. Possibly a comparative perspective will be added by integrating cases from one or two other European countries into the sample: • Which are the strategies that NGOs use when they try to reach their targets before the courts? • Which institutional settings are favourable for successful litigation? • Do such litigation strategies politicise the relevant courts? Or do they de-politicise political conflicts? • Did the NGO’s litigation strategies change over the time? Does the internet open new pos-sibilities to organize litigation strategies? • Is the integration of NGOs into judicial proceedings by attributing them the right to repre-sent the general public interest a way to improve policy outcomes - and to prevent future crises?

Panel 5I Accounting for New Regulatory Approaches and Regulatory Performance

1 Public Accountability and PPP’s -How does public accountability work in complex settings? Tom Willems University of Antwerp

ABSTRACT This paper uses the concept of public accountability to ask questions about the democratic quality of new horizontal forms of governance like PPP’s. After exploring Flemish PPP policy we concluded that there appears to be an important accountability paradox. The introduction of innovative governance tools like PPP’s has led to an accumulation of accountability mechanisms. Besides more traditional political and judicial accountability mechanisms, business-like or managerial accountability mechanisms like contracts, market competition, risk analysis and performance audits are on the rise. Many officials even complain about real accountability overloads. Yet, and therein lies the paradox, well informed observers perceive public accountability in PPP as highly problematic. There is a strong feeling that there is something wrong with the way public authorities are being held to account regarding PPP projects. The wide range of accountability mechanisms apparently does not lead to a satisfying ‘state of accountability’. Public accountability as a normative end is insufficiently achieved. This remarkable inconsistency between accountability as a mechanism and as a normative end constitutes the main focus of the paper. How can we avoid that democratic governance gets lost in diffusion of public and private responsibilities? By studying in-depth four large cases of PPP

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projects in Flanders, we hope to uncover the dynamics that explain the complex relationship between accountability mechanisms and results. This paper presents the empirical results of the first case, a social housing DBFM project.

2 Accountability And Governance In Local Public Services Nuno Ferreira da Cruz, Rui Cunha Marques Instituto Superior Técnico – Technical University of Lisbon

ABSTRACT The growing budget restrictions and decentralisation processes that local governments face nowadays are threatening the sustainability of local public services. To overcome this problem, local decision makers around the world have been ensuing ambiguous reforms, resulting in various provision models. Since these services are essential for citizens’ welfare, it is crucial to determine whether or not these models have been effective and useful to amend this state of affairs. To offer extra leverage to key projects the European governments have been resorting to public- private partnerships (PPP). One of the visible trends, which lack further research, has been the use of mixed public-private companies (institutionalised PPP). Although it is recognised that this solution can be interesting to both public and private parties, it has some particularities that can avert the aimed goals. This investigation focuses on the cases where a local government creates a firm envisaging the participation by the private sector in the company’s equity. We try to understand if the decision to provide a local public service with newly mixed companies is well founded and if these processes have not been poorly managed. In this communication we perform an extensive literature review on mixed companies regarding theoretical, operational and legal aspects. Furthermore, we will focus on the regulation by contract involved with these ventures, referring to a particular Portuguese case-study in the water sector. We explain how the municipality handled risk allocation and regulated the access to the market of privates. Revealing the best practices in the accountability delegation chain involved with these partnerships is crucial to the success of the model. Finally, we discuss the need for external regulation (carried by a “light regulator” performing “sunshine regulation”) and make suggestions on how these processes should be managed right from the bidding stage, which may have some policy implications.

3 Regulatory Quality: A Cross-country and Cross-sectoral Analysis Isik Ozel Sabanci University

ABSTRACT The current global crisis has drawn significant attention from both academic and policy-making circles regarding the need for more and “better” regulation in economic governance. Studies on regulatory governance in developing countries are still scarce and they mostly explore mechanisms of diffusion, focusing on the initiation of regulatory reforms. This study asserts that establishing regulatory agencies does not necessarily guarantee a smooth functioning of regulation or “good regulation”. What is at stake is the regulatory quality, since the actual operation of regulating agencies tends to deviate from their initial formulation. In many developing countries, pre-existing domestic institutions and the embedded veto players resist the adaptation of regulatory reforms; and/ or IRAs may be “captured” by public and/ or private interests; actors with vested interests might impair the quality of regulation. There is, however, considerable variation at the country and sectoral levels: some countries have higher institutional capacity to carry out high quality regulation, while others fail to do so. Why do regulatory agencies in some sectors tend to be “captured” and/or politicized more easily than in others? What explains such cross-country and cross-sectoral variation? This study explores quality of regulation carried out by the independent regulatory

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agencies. It puts forward that regulatory practices are shaped by the broader institutional context, giving rise to variation in the forms of governance. It argues that the existing institutional arrangements such as the number and configuration of veto players, the way the private interests— those of the regulatees—is organized and the sectoral determinants such as the level of internationalization affect regulatory quality. The study will focus on three sectors: finance, energy and telecommunications, drawing from three cases: Mexico, Hungary and Turkey. The study’s findings will improve our understanding of the governance structures in the middle income countries and varieties of regulatory capitalism.

4 Regulatory Regimes and Foreign Mining Investment in the Asia-Pacific Region: Comparative Evaluation and Policy Recommendations Vlado Vivoda University of South Australia

ABSTRACT This paper assesses the performance of regulatory regimes governing foreign mining investment in the Asia-Pacific region against the main criteria which determine the quality of a regulatory regime. The main argument is that the poor performance of the governance structures and non-performing regulatory regimes in the mining sector are behind the high level of regulatory risk for foreign mining investors, and the low levels of foreign investment. The paper utilises the novel regulatory regime mapping instrument, developed as part of an Australian Research Council (ARC) funded project, which consists of over 200 sector-specific indicators to assess the performance of regulatory regimes governing foreign mining investment in China, India, Indonesia, Papua New Guinea and the Philippines. Based on the findings, policy recommendations for improving governance infrastructure in the sector are outlined. This paper, unique in its subject area, may assist the regional governments and possibly governments of other developing countries in improving governance infrastructure in their mining sectors, and thus reduce the level of regulatory risk and increase the amount of foreign investment in the sector.

Panel 5J Regulatory Governance in Network Industries I

1 On the design and implementation of utility regulation Alessandro Marra, Vittorio Carlei Università degli Studi "G. D'Annunzio" di Chieti- Pescara

ABSTRACT Nowadays, utility regulation is carried out by means of multi-tier and complex public institutional settings: several public entities, regulatory agencies and authorities are involved at different levels of governance, pursue different objectives, make use of different tools, operate at different phases of the regulatory process and continuously interact among themselves. Does such an institutional complexity have any impact on the effectiveness of regulatory reforms? In our view, the multitude

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of interactions among institutions, goals, tools and phases of the regulatory framework/process affect regulatory effectiveness (and, hence, utility performance) and do it in a more penetrating manner than policy and legislative measures designed at EU level. Our purpose in this paper is to found the relevance of institutional complexity from a theoretical and practical perspective, provide a preliminary analytical framework to identify, classify and compare different public institutional settings and propose some guidelines to deal with the implications of institutional complexity for public policy and administrative processes

2 Governing the Dynamics of the Network Industries Rolf Kinneke, Mathias Finger, John Delft University of Technology Groenewegen, Theo Toonen

ABSTRACT It is generally accepted that the network industries have evolved over the past 20 years and become more liberalized. In parallel, the technologies in the different network industries have also somewhat evolved, especially the ICTs that underlying all other technologies. It is also agreed that the governance of these network industries has evolved from traditional state-owned enterprises to undbundled enterprises under regulation to new, more self- organized and decentralized forms of self-governance. But, not only is the latter form of governance is still under discussion, moreover, it is not yet established in the literature whether this is a "natural" evolution or whether these three forms of governance represent different models associated with different performance objectives. In this paper, we want to go yet one step further, and ask the question whether and how this very dynamics of the network industries can or should be governed. Indeed, if there is an evolution from monopolistic, via regulated to decentralized self-governed infrastructures, the question arises as to whether this process – characterized by both technological (distributed, inverse) and institutional changes (regulation by ownership, sector-specific regulation, competition and/or self-regulation) – unfolds organically or whether it can or should be facilitated by appropriate policies on the governance of evolving infrastructures. Our paper is thus structured as follows: 1. In a first section, we will schematically present the three main stages or models of the evolving infrastructures, namely the original traditional stage/model of integrated public ownership or delegated management (still prevalent in the water and sometimes the railway sectors), the stage/model of unbundled, partly privatized sectors regulated by sector-specific independent regulatory authorities )prevalent in the cases of electricity, gas, air transport, and sometimes railways), and the emerging model of decentralized competing and weakly regulated network industries as in the cases of telecommunications and postal services. 2. In a second section, we will relate these three models/stages to different theories, namely public management in the case of stage/model 1, regulatory economics in the case of stage/model 2, and common-property resources and self- regulation theories in the case of model/stage 3. 3. In section three, we will then discuss the dynamics at both the technological and the institutional levels, both of which combined have led to these models/stages. In particular, we will critically discuss whether these are stages or simply different models, and what the underlying forces of change are. 4. In the concluding section, we will retrieve from the above what we can learn (1) about the evolving governance of the infrastructures, (2) how we can conceptualize this evolving governance, and (3) derive from there how such a dynamics could in turn be "governed", i.e., be facilitated in policy and in institutional terms.

3 New Foundations for EU Energy Policy Adrien de Hauteclocque, Jean- Michel Glachant, European University Institute Eva Niesten, Yannick Perez

ABSTRACT Achieving the objectives of EU energy policy requires coherence both within and among each of its three objectives (its "three pillars": competitiveness, sustainability and security of supply). However,

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any European policy is also constrained by the existing institutional and political frame for decision- making. This frame has not been designed to optimally produce energy policies, which often leads to institutional paralysis and sub-optimal outcomes in practice. This paper is thus grounded on the need to question the institutional process of EU energy policy production necessary to go forward with three conflicting objectives. The paper first shows that the common wisdom often too quickly assumes that EU energy policy exists as a uniform area. In fact no single EU energy policy exists but rather a set of several pre-existing non- energy policies (e.g. single market; environment protection; foreign affairs) which have been incrementally concerned with energy duties. The legal tools used to build each piece of the so-called "EU energy policy" have thus rarely been designed to address the specificities of energy markets and the multi- levelness of energy governance. It creates a consequential mismatch between the rationale of energy policy areas and the actual allocation of competences between European institutions and Member States. One of the key institutional problems of EU energy policy today is the current inability of some ‘pioneering’ Member States to credibly commit and promote "ad hoc" common policies to escape the formal and procedural requirements of EC law. Several institutional ‘patches’ could remedy this situation and we show that the key solution should be to implement a Shengen-like approach allowing for flexible EU integration in certain energy policy areas. In the final part of the paper, the Shengen approach is applied prospectively to three potential candidates for flexible integration: nuclear, gas security of supply and massive renewables.

4 Comparing regulatory decision-making in the energy sector Giusseppe Bellantuono University of Trento

ABSTRACT Since the beginning of the liberalization process in the energy sector the economic literature has devoted many efforts to the assessment of the relationship between the quality of the regulatory framework and the performance of energy markets. The prevailing wisdom relies on the construction of synthetic indicators, which should describe the main institutional variables. These indicators are then employed to run econometric regressions and rank each national regulatory system according to their results. In this paper I argue that currently available synthetic indicators do not capture the institutional complexity of regulatory systems. While there is an urgent need to measure the quality of rules and institutions, this task cannot be accomplished without first developing a better understanding of their origins, complementarities and implementation. To advance this goal, I propose to use regulatory decision-making processes as the unit of analysis and as a common ground for the dialogue between legal scholars and economists. How such processes are organised directly affects the relationship between energy markets and institutions. Two theoretical approaches offer a more realistic explanation of regulatory decision-making. Firstly, comparative law helps detect those institutions, sources of law or legal ideas most relevant for the workings of each national or supranational regulatory system. Secondly, behavioural law and economics helps understand the decision costs regulators must face and provides a standard of reference to set forth concrete proposals for improving the regulatory design. After providing a general description of this new approach, the paper applies it to a specific regulatory problem, namely the development of network rules which support the transition of energy systems to large- scale deployment of renewable energy sources. The European and American regulatory systems are compared to find out how each legal tradition deals with the conflicts between traditional and new energy players and copes with economic and technological uncertainty.

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Panel 6A EU Regulatory Responses to the Crisis

1 Surpassing network governance? Factors affecting proposals for supranational governance in the European System of Financial Supervisors and the European Systemic Risk Council. Shawn Donnelly University of Twente

ABSTRACT This paper examines crisis-induced regulatory reform proposals for the financial services industry in the EU, focusing on the likelihood of new delegation to the European Commission and proposed Agencies and bodies, and their intended relationship with institutions of global governance. It embeds the analysis of proposals for a European System of Financial Supervisors, incorporating agencies for banking, securities and insurance regulation in the context of two different kinds of influence: on the one hand, to delegate as much national authority as possible to the EU level to maximise European clou t over global governance initiatives; and on the other, to protect sensitive areas of national discretion from harmonisation, as happened during the 2000s as policy regimes for these areas were being created (Donnelly 2010)

2 Regulation in Europe after the Financial Crisis: Patterns of Up-loading and Down-loading of Regulatory Solutions Beata Kviatek University of Groningen

ABSTRACT The crisis in international financial markets pushed the EU member states to decide upon coordination of financial policies at the European level. This was consequently realized by adoption of a number of regulatory and budgetary measures aimed at responding to financial crisis. At this point an interesting question is what regulatory solutions were adopted and why. In order to draw the patterns of up-loading of national policies I will examine several cases, for instance, the promotion of Dutch supported idea of an EU-wide recapitalization fund. The other question is then what regulatory solutions were accepted (or down-loaded) by the member states and why. As a case study I will look at the process of spread of Gordon Brown’s rescue plan of October 2008 among the EU member states.

3 Overcoming Systemic Financial Risks in Europe: Contested Policy Responses and the Shortcomings of Ordoliberal Responses Dieter Pesendorfer Queens University Belfast

ABSTRACT The monumental crisis of global financial markets since 2007 and the current economic downturn have not only led to significant changes in debates about financial and economic regulation but also put an enormous amount of regulatory reform proposals on the agenda. While critics of neoliberalism urge fundamental policy change in a situation of an open ‘policy window’ to establish

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a completely new global financial system based on a ‘New (Green) Deal’, on tight regulation and systems’ diversity, ordoliberals – in their attempt to stop such reforms – demand caution against overregulation and warn of negative or even unintended consequences of responses not awaiting major economic recovery. ‘Shadow banks’ and the so-called innovative financial instruments are major sources of systemic financial risk resulting from the trends of financialization. The paper focuses on the theoretical aspects of the EU’s reactions to these two areas of financial risk regulation, namely the regulatory proposal for Over-the-Counter derivatives (amendment to the Capital Requirements Directive) and the draft Directive on Alternative Investment Fund Managers. Based on classical structural power arguments in relation to the controversies between different models of financial systems in EU member states, the EU’s role in supporting financial integration in the Common Market, regulatory competition (especially between the world’s largest financial centers) and considering contemporary (better) law-making practices, the paper takes a critical view on the likelihood of a fundamental policy change and argues that we should not expect a too radical change but more a moderate reformulation of neoliberalism in terms of its ordoliberal conceptualization. In the final part it outlines and discusses some ideas for a financial system based on an interpretation of the precautionary principle for the financial sector (e.g. financial product safety commission, downsizing financial institutions) and asks about the EU’s capacities within the ordoliberal framework to establish such institutional firewalls against future systemic risks.

Panel 6B Multilevel Environmental Governance and Nanotechnology

1 Big Government for Small Technology – European Regulation for Nanotechnology Kirsten Rodine Hardy Northeastern University

ABSTRACT Nanotechnology has been hailed as the “next industrial revolution.” Regulation is one of the key components of how states interact in markets. How do states regulate in dynamic economies with competitive market considerations and important public interest and safety concerns? The European Union has developed a multi-level stakeholder set of governance and regulation around the emerging field of nanotechnology, particularly in the area of environmental regulation and chemical safety. The United States has created a patchwork of governance at the local, city, state, and federal levels. Interestingly, one of the key findings to emerge in recent research is that much of the action in regulating nano-technology is on the local and city level, as opposed to the state or federal levels (Bosso and Kay 2009). The European Union has followed a different path, driven in part by concerns over subsidiarity and its rich history in environmental legislation. To what extent does the European pattern of regulation for nanotechnology constitute a separate “European model?” Is this model very different from other patterns of European regulation and governance? I argue that European regulation of nanotechnology follows both a European and national pattern, yet in ways that are surprising. The paper presents a multi-level theoretical framework for European

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regulation and governance in nano-technology, as well as an empirical analysis of widespread variation across member states. The paper also outlines next steps for comparing European regulation and governance with emerging global patterns in the US, Canada, Australia, and Japan.

2 Local Government and Conditions of Uncertainty: Cambridge, MA and the Regulation of Nanomaterials Christopher Bosso, Caitlin McAllister Northeastern University

ABSTRACT Uncertainties surrounding the health and environmental effects of nanotechnology pose a unique dilemma to local and state governments invested in fueling economic growth through innovation. They typically have limited capacity to address potential environmental and public health effects of new technologies even as such effects are felt first locally. We focus on the experience of the Cambridge, Massachusetts, Nanomaterials Advisory Committee (NAC) in 2007-08 as it considered rules on nanomaterial research and production within city limits. The NAC’s path of action was influenced by the experience of Berkeley, California, which had implemented a nanomaterials reporting ordinance a year earlier, and, perhaps more important, by lessons obtained by the Cambridge Environmental Review Board (CERB), which for three decades has overseen what were the first regulations governing biotechnology enacted in the United States. The outcome – to not act– reflected a sober yet watchful understanding that too little was known to promulgate specific rules just yet. Understanding the processes by which Cambridge addressed this dilemma may guide other local governments in dealing with uncertainty.

3 Governance and Uncertainty: A Meta-Analysis with applications to health and environmental impacts of nano-technology Rob A. DeLeo Northeastern University

ABSTRACT Scholars have long wrestled with the concept of uncertainty and its implications on governance and policymaking. However, there is a no a coherent understanding of how governments should align themselves to deal with uncertainty. Instead, the concept of uncertainty is implicitly addressed across a variety of subfields, each treating the concept in a noticeably unique way. In light of this fragmentation, the following meta-analysis reviews how the concept of uncertainty is treated in three distinct theoretical frameworks: (1) public policy studies; (2) organization theory, in particular the literature on high-reliability organizations (HROs); and (3) anticipatory-governance, a theoretical framework that draws from a host disciplines including sociology, political science, and science and technology studies. Because the mitigation of uncertainty is central to any regulatory regime, this analysis also make inferences into how these disparate literatures inform our understanding of how governments should align themselves to deal with conditions of acute uncertainty. In the final section I consider the applicability of these literatures to the potential environmental and health side effects of nanotechnology in particular.

4 Regulation of manufactured nanomaterials and -devices in the Netherlands Johannes Eijmberts Northeastern University

ABSTRACT Around the world governments and stakeholders in emerging nanoscience and nanotechnologies engage in deliberations on regulatory approaches of (manufactured) nanomaterials and nano- devices. This paper assesses the regulatory approach of nanomaterials and nano-devices in the

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Netherlands. It describes the general Dutch governance model for environmental policies, within which nanoscience policy formulation takes place. The paper provides an overview of the actors in the Dutch nanotechnology debate. It gives a timeline of the developments in governance of nanoscience and nanomaterials in the Netherlands. The country has large ambitions in this field and the government co-funds a far-ranging nanoscience program. The paper is centered on two research questions: - How does the current policy formulation of nanoscience and nanomaterials regulation root in Dutch traditions of governance of science & technology, and of environmental policies? - Which parts of the formulation process may be labeled specifically Dutch, and which parts are (co- )produced through European and OECD collaboration? The Dutch governance model is rooted in a long history of inclusive consensus seeking and mediation between all participants (government, independent research institutions, universities, industry, interest groups, and the general public) in the process of policy and regulation formulation. Furthermore, Dutch policy is nested within an evolving European model of regulation and governance for nano-technology, as well as other international efforts, including the Organization for Economic Cooperation and Development (OECD).

Panel 6C Regulation, Rights and Review

1 “Manifestly Unreasonable?” A Critique of Merits-based Review in Irish Regulatory Appeals Gerard Sadlier Law Reform Commission

ABSTRACT Abstract: Over the past decade, Ireland has experienced an unprecedented proliferation of regulatory agencies. While regulation seems to be the political response to every ill, little attention has been paid to the structure or effectiveness of appeal mechanisms. Still less has focused on the proper standard which should be applied by an appellate body, when considering the correctness of the regulator’s decision ‘on the merits’. This paper considers both these issues, with reference to Irish law and the law of comparable jurisdictions. Using a selection of regulatory regimes currently operating in Ireland as examples, the paper illustrates the inconsistencies in the structure, composition and powers of the different bodies which hear appeals from regulated sectors. The justification for such differences is questioned and the impact which such variation can have on the regulatory process is illustrated. The prospect of setting up a single body to hear regulatory appeals, or of providing a right of appeal to the High Court, is canvassed. Central questions concerning the type of body which should hear appeals – expert or generalist, permanent or Ad Hoc, are addressed. Successful systems operating in the U.K. and Australia are considered. The standard of scrutiny to which a challenged decision will be subjected on appeal, or application for judicial review, is then discussed. The stringent standard of manifest unreasonableness applied by the Irish courts, in judicial review proceedings is discussed and contrasted with case-law from

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comparable common law countries and the European Court of Justice. The standard of review applicable in a statutory appeal is then addressed. The efforts of the Irish courts to formulate a consistent standard of ‘unreasonableness’ for the purposes of statutory appeals is queried. The various standards applied by ad-hoc appeals bodies are critiqued. Finally, an attempt is made to draw tentative conclusions about the impact which the differing standards of review identified above have had on the regulatory process. A series of factors which should be considered, in setting the threshold for review on the merits appeal is proposed.

2 Excluding judicial review from the decisions of non-state actors Daniel Stewart The Australian National University

ABSTRACT The various roles of non-state actors in regulation place the courts in complex and often uncertain roles. Often this role is explored through considering the effect of judicial review on achievement of the regulatory scheme and the alternative forms of accountability available. However, to the extent the involvement of non-state actors attempts to exclude judicial review, at least where that review might be available were state actors involved, then issues of separation of powers and the appropriate role of the court in filling in any accountability gaps are also directly concerned. This paper will explore how approaches to delineating judicial involvement in regulation, whether in response to a particular crisis or otherwise, help us in considering the availability of judicial review to actions of non-state actors. It will compare recent judicial decisions in Australia and the UK to the interpretation of privative clauses and other restrictions explicitly attempting to restrict judicial review. It will then attempt to place these approaches in the context of other important developments in the role of judicial review in each jurisdiction, and in particular the diverging role of jurisdictional error and different constitutional frameworks. The differences in approaches to the separation of powers and the role of judicial review that this comparison elicits will then be used in exploring the approach the courts take in intervening in the actions of non-state parties on the grounds on their connection with the state or the achievement of public regulatory objectives.

3 Discretion and Judicial Review in EU Competition Policy: The Case of Merger Control

J.C. Hernandez University of Navarra

ABSTRACT EU merger regulation rely on the “significant impediment to effective competition” substantive test. However, the clause that incorporates these test is not clear regarding implementation criteria. As a result, in many cases assessment and decisions about Mergers and Acquisitions are adopted in an uncertain legal context. Often this situation is justified for two reasons: first, the need to incorporate the economic complexity into the decision; and second, the prospective nature of merger assessment. Nevertheless, from the Law’s point of view many questions arise. Prospective decisions are unsuitable to deal with classic theories of regulation and judicial review. As we explain in this paper, the European Commission adopts its decision based on the foreseeable behaviour of undertaking. European Courts recognize Commission’s wide discretion to assess merger on a case-by-case basis and limited the scope of judicial review. As a result, commentators have criticized the EC merger regulation. In this paper these issues are considered. In the first part, we study the clause that incorporates the substantive test in EC merger regulation. In the second we deal with the scope of judicial review of prospective decisions and appropiate standard of proof. Next, we argue that reform of EC merger

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administrative procedures will reduce the scope of discretionary authority to reasonable levels and improve the decision-making process. Finally, we suggest tools developed in the risk regulation literature to improve legitimacy and ensure rationality of the European Commission’s decisions.

Panel 6D State Structures and Public Sector Organisation II: National Diversity

1 Reorganizing by Mergers. Analyzing the choices for new structures of the French Territorial State in the 2000s. Philippe Bezes, Patrick le Lidec University Paris 2

ABSTRACT The 2007 Presidential election of Nicolas Sarkozy generated the launching of a significant General Review of Public Policy in France affecting the global organization of the French state. Within this process, a systematic and strategic reorganization through mergers has been decided by 2007-2008 consisting in three sets of decisions: merging state regional units according through the creation of large ministerial and policy-oriented state units; re-formatting the départemental organization of the state by creating three big inter-ministerial state units ; rethinking the global hierarchical leadership within the territorial state by reinforcing the coordinative and ‘horizontal’ power of the prefects. The paper will address the question of who, how and why this organizational change – dominantly based on the template of ‘mergers’ – took place in the French context of the 2000s. After an important neo-managerial reform of the budgetary process in 2001-2006, this systematic reform of structures could be related to the wave of post-NPM measures favouring integration and coordination through labels and programs such as ‘Whole-of-Government’ approach or ‘joined-up’ government. Relying on a backward tracing of the multiple micro-decisions and negotiations that took place in this reform process on a short period (2007-2009), this paper will discuss and challenge this explanation in a French context where organizational disaggregation was not a consequence of previous NPM reforms but more an inheritance of the past. Starting from a discussion of the strength of ideational templates, the paper will suggest alternative explanations of this choice for systematic mergers and exclusive focus on structures. It will specifically insist in the emergence of an ‘ambiguous consent’ between competing drivers of the reorganization decision process and will identify several contradictory rationalities at stake: budgetary cuts expected from the merging process by the ministry of Finances; increased means of policy coordination at local level given to the prefects and the ministry of Interior; new policy capacities for redesigned ministries.

2 Europeanization of regulatory agencies in Estonia Külli Sarapuu Tallinn University of Technology

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ABSTRACT The paper will focus on a specific type of Estonian government agencies – the boards and inspectorates – and their development from 1993 (beginning of systematic EU-related activities in Estonia) over 2004 (aquiring the EU membership) to 2009. The boards and inspectorates form a well defined group within Estonian public administration, they are provided by law and their main function is to exercise state supervision and to apply enforcement powers of the state.

Estonian public administration has gone through major transformation since regaining independence from the Soviet Union in 1991. A mapping exercise of structural development carried out by the author on years 1989-2009 revealed that the accession to and membership in the European Union have been important variables in the structural change of public administration. In the period of 1997-2007 most of the explanatory documents to the establishments, mergers or endings of the regulatory agencies mention EU membership as a direct or indirect reason. For example, in the establishment of the Agricultural Registers and Information Board and the Data Protection Agency or the merger of the Tax Board and the Customs Board, EU factor has been brought out as the main cause of reorganization. However, there is reason to hypothesize that the nature and intensity of the EU influence has changed over the years (as well as has the importance of the legacy of being a post-communist state).

The paper will take a closer look to the changes and will attempt to give an account of the development of regulatory agencies in the context of accession to and further membership in the EU. The paper will draw on the literature discussing the concept and mechanisms of Europeanization (both in the context of eastern enlargement and the membership experiences of ‘west’) and will combine it with the research on post-communist transition in administration. The underlying foundation will be created by the literature on administrative organizational structure and the division of functions within such a structure. The empirical part of the analysis will be based on data gathered during the mapping exercise and complimented with information from documentation concerning the accession process as well as obtained through interviews with relevant individuals.

3 Institutional Change and Policy Capacity in Anglophone Countries John Halligan University of Canberra

ABSTRACT An issue for Anglophone systems that have managerialised, privatised, marketised and centralised their public sectors, is how to address policy capacity now that disaggregation and private sector solutions (at least for some purposes) are out of favour.

At one level similarities exist among Australia, Canada and New Zealand and the United Kingdom in the aftermath of the new public management era. There is a tendency towards the concentration of power in the prime minister and to rely on the main policy-coordinating agency at the centre. At another level context matters as instanced by the significance of policy ministries and a dispersed departmental system in New Zealand; and the by-passing of departments under a Canadian government that prefers policy advice from neo-con think tanks). There are parallels between government rhetoric in Australia and the United Kingdom about strengthening civil service policy capacity while simultaneously drawing extensively on external advice.

The paper proposes to examine how Anglophone countries are responding to policy challenges through developing policy capacity for strategy and implementation. This will cover the emerging design issues about internal capacity of the public service, the relative roles of policy departments

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and central agencies, and mechanisms for vertical and horizontal policy coordination. Finally, the paper considers the implications of organisational change for addressing policy challenges.

Panel 6E Context and Regulatory Design

1 Regulatory Reform in Georgian Broadcasting: Citizen Rights and Roadblocks to Co- Regulation Giorgi Kipiani Javakhishvili State University

ABSTRACT Council of Europe (CoE) and European Community have been involved in intensive consultations on transformation of broadcasting regulation in Georgia since its a accession to CoE from 1999. Article discusses dynamics of legal environment change and role of different stakeholders (civil society, broadcasters, state) in implementation of European media policies. Transposition of European media policy standarts in Georgian Law of Broadcasting in 2001 was followed by efforts of citizen active participation in co-regulation of broadcasting and growth of consumer complaints to regulator - the Georgian National Communications Commission. In response to this pressure the Law on Broadcasting was amended in December 2006 and now broadcasters themselves can choose whether to handle complaints within their internal self-regulation mechanisms or as part of any joint self-regulatory mechanism. Amendments prohibit any interference by the courts or independent regulatory body in resolution of these issues. So instead of co-regulation self-regulation was introduced. Such a regulatory framework is regarded by state officials as one of the most liberal of its kind in Europe. Regulatory mechanisms are minimal - all fines for breaches of Broadcasting Law has been removed and new Broadcasting Code of Conduct admits airing scenes of violence up to 15 seconds. Meanwhile European monitoring bodies publish controversial reports: assessment by the European Bank for Reconstruction and Development (EBRD, 2009) concludes that only Georgia has high compliance of national communications regulation mechanisms among the CIS countries; EU neigbourhood program (ENP, 2009) report concludes that current legislation and practice of the national broadcasting commission does not allow an adequate protection of minors and consumers. Article discusses obstacles in implementation of CoE standarts in the framework of modernization and path-dependency theories.

2 Private School Regulation and Policy Instruments: Back to National Policy Styles Amos Zehavi Tel Aviv University

ABSTRACT Different commentators which draw a distinction between ‘hard’ and ‘soft’ policy instruments (which mainly differ in the degree of coercion that their use involves) argue that in the ‘new governance’ age a pronounced shift has occurred from the former to the latter type of instruments. This paper argues, however, that general claims about state enervation too often focus attention on

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the common use of ‘soft’ instruments, such as information and persuasion, while ignoring how they are complemented by more coercive instruments such as enforcement of voluntary covenants. Moreover, variation across both national policy systems and policy sectors can be considerable but often goes unnoticed. A comparative study of non-government school regulation in the U.S., England, and Israel is employed to illustrate both the prevalence, and effectiveness, of soft-hard policy mixes and the variation in contemporary national policy styles. In England, the government performs the task of strict regulator vis-à-vis the non-government schools sector although direct use of coercion is relatively rare because the very threat of coercion provides sufficient motivation for non-government schools to comply with state guidelines. In the U.S., both political change and reinterpretation of constitutional restrictions on public aid to non-government schools have enabled a growing emphasis on government use of financial incentives in its interaction with non- government schools. In Israel, governments mainly employ the ‘soft’ instruments of persuasion and deliberation largely because other instruments have failed. Israel represents the one case in which the new governance insights regarding policy instrument evolution appear appropriate. Nevertheless, it is argued that the unique mix of political power and anti-government motivation that characterizes the Israeli non-government school sector constituency is unlikely to be replicated elsewhere.

3 Identifying Context of Controlling Risks in Prison Service Management:Comparative analysis of Prison Management between English and Japanese Prisons Ayako Nakamura, Oliver James University of Exeter

ABSTRACT This paper is intended to analyse how the unity of prison staff and informal rules and belief in prisons influence on the effectiveness of prison management. The prison service is a highly regulated policy domain, and the use of private resource, which is well known as Private Financial Initiative (PFI) in England, is also driven by legal controls or formal written regulations on the private sectors and staff members. However, in the prison service, the efficiency and effectiveness of control is delivered not only by formal written rules and regulations, but also by two contextual factors: Informal rules, which influence on the management of local prison establishments, and high unity and mutual relationships between prison staff members. In order to successfully use the private source for prison management, it is necessary to consider the impact of these informal contextual factors on prison operation. In order to identify these contexts of prison services, firstly, this paper focuses on specific risk and how it is controlled in prisons: suicide and violence by prisoners. Secondly, regarding this risk, I will compare styles of controlling them in English and Japanese prisons by identifying the relations between prison staff members and the influence of formal and informal rules on them. For the purpose of comparatively identifying these, I will refer to Wildavsky’s and Douglas’s Grid and Group Cultural Theory. Finally, reviewing the result of these measurements and my comparison of risk controls over suicide and violence in the English and Japanese prison service, I will suggest what we have to consider for the effective privatization of Japanese and English prisons.

4 Global and Local Dynamics: The Regulation of Medical Technologies in the European Union, Japan and the United States. Christa Altenstetter City University of New York

ABSTRACT The regulation of medical technologies is a neglected topic in social science and health policy research. This is a paradox in light of the increasing demands for life-enhancing medical devices,

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revolutionary medical-technological innovations, and the fact that recalls of medical implants, such as artificial hips, defibrillators, heart valves, and stents, are as a frequent as drug recalls. In turn, global and national and in the case of the EU regional policymaking on medical devices has been shaped by three separate but mutually reinforcing developments: (1) the globalization of medical device production, medical-technological innovation, and trade; (2) the imperatives of finding a single “window of regulation” driven by national regulators and global business interests; and (3) the persistence of strong regulatory preferences embedded in national institutional developments and legal and administrative traditions, including health care and medical research traditions. This analysis starts out by exploring the commonalities of medical device regulation across three cases ─ the European Union, Japan, and the United States ─ and tracing their respective historical trajectories and examining how each regulatory regime is responding to, and is influenced by, global regulatory agreements designed to move toward a “single regulatory window” for medical products. Preliminary findings suggest that the pressures for global cooperative agreements and their incorporation into national practices and related adaptation processes are decisively influenced by the prevailing national institutional context, the commensurate political climate, and the historical- political trajectory unique to each case. Patient access to advanced medical technologies is the least globalized component of medical device regulation and remains a function of each national health care system. Empirical data were obtained through open-ended interviews, websites of formal and informal stakeholders, and document analysis in each case.

Panel 6G Changing Institutional Patterns in Africa

1 Stock Market Participation In The South African Development Community Greg Shailer The Australian National University

ABSTRACT Our objective is to explain the persistently low but different levels of local participation in the stock markets of the Southern African Development Community (SADC). The comparative markets and governance literature emphasises legal origins of property rights institutions as a determinant of economic development and capital markets outcomes. We argue that understanding how prevailing property rights regimes impact stock market participation requires an understanding of how the regimes and markets developed and the implications of the development processes for current participation propensities. Colonial policies in SADC countries varied according to the European colonial power and the perceived economic benefits of a territory. Differences in colonial policies affected property rights development and the extent of persistent institutional conflicts in a country, influencing extant industrial development, savings and stock market outcomes. Colonial political autonomy and settler activity influenced the transformation of local institutions, and transplanting private ownership practices failed in the absence of substantial populations of nonindigenous peoples. Post-colonial industrial development and stock market participation are higher in countries where private ownership dominates communal ownership. Overall, lower participation levels in SADC stock

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markets are related to lower aggregate levels of industrial development, which derive from prevalent communal ownership traditions and institutional conflicts. Private ownership regimes are most effective where the traditional communal ownership practices have been substantially eliminated. Where extensive private property rights have been introduced but communal property rights are widely maintained by the indigenous population, the persistent institutional conflict has impeded economic development. Variations in the economic and stock market outcomes are better explained by the variations in the property ownership culture rather than by institutions for protecting property rights. In the absence of sufficiently large numbers of potentially profitable projects and investors, capital markets remain undeveloped and there is no substantive role for a public stock exchange.

2 Privatization, Commercialization And The Democratic Process In Nigeria: A Conjunctural Enquiry. Chuku Umezurike University of Nigeria

ABSTRACT The intertwining practices of Privatization and Commercialization of public enterprises in Nigeria have more or less formed the core of the liberalization programmes engendered in economic reforms in the country. They became critical aspects of public policies in 1988 as part of the defunct Structural Adjustment Programme in Nigeria. They have been expectedly pursued since 1999 that the country entered into the much avowed post-Military political rule. The advancement of scholarship in this paper is mainly in view of the perpetuating hibernation of national development on the programmes of privatization and commercialization. The paper thus furthers the contention by noting that the comprador character of the Nigerian political economy has created abnegation for the role of these programmes in resolving economic malaise and advancing democracy in the country. By drawing relevant data from Nigeria’s post-Military political regimes (1999-2009), the paper submits that the assumed indispensability of the programmes has derived from the historical limitations on the institutionalization of public power in Nigeria, a condition which has heightened social inequalities to the disadvantage of the most oppressed social forces. The paper finally notes that the greater pursuit of democracy in the country leverages both the institutionalization of public power and the appropriate practices of public enterprises in Nigeria.

3 Nigerian Insurance Companies in an Age of Regulation Hakeem Yusuf, Tajudeen Yusuf Queen’s University Belfast

ABSTRACT Regulation of Nigeria’s insurance industry has become substantially intensified in the last two decades. This paper critically evaluates the philosophy of and challenges of insurance regulation in the context of post-authoritarian governance and increasing economic liberalization in Africa’s potential largest insurance market. The last two decades has witnessed among others, government regulatory intervention through the establishment of a regulator and mandatory recapitalization. We assess the regulatory experience of the Nigerian insurance industry prior and after the capitalization era; spanning 1999 to 2009. Temporally, the trajectory of developments in the last decade which coincides with post-authoritarian military rule in the country is significant. As a developing economy, the Nigerian insurance industry presents an example of untapped and gross under-utilization of its boundless potentials as a regional power in the Sub-Saharan Africa after almost three decades of authoritarian military rule. Adopting a qualitative approach, this paper explores the factors responsible for the industry’s slow growth in comparison with its huge human and material resources and what lessons might be learnt to chart a new way forward.

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Panel 6I Quality of Regulation

1 What’s an impact assessment to do? Ideas, instruments and the capabilities- expectations gap Claire A. Dunlop, Claudio M. Radaelli, Duncan University of Exeter Russel

ABSTRACT The large majority of European governments have experimented for almost a decade with regulatory policy mixes including simplification, reduction of administrative burdens, e‐consultation, notice and comment procedures, cost‐benefit analysis and impact assessment (IA) in the context of ‘better regulation’ policies. IA, the pivotal instrument of this approach to regulatory reform has been first enthusiastically imported from the USA, however recent research shows that countries as diverse as Denmark, Italy, the Netherlands, Sweden and the UK find it difficult to get IA ‘right’ and to produce policy learning. Instead, current research has shown symbolic and ritualistic usages of this instrument. Whilst in the US impact assessment procedures have their clearly demarcated role to play in the Presidential control of federal executive agencies, European governments have sought to use IA in connection to several aims: controlling the regulators is often one of those aims, but we also find ‘rationality’, ‘challenging our prior beliefs’, ‘open governance’, ‘joined‐up government’, ‘balancing sustainability with competitiveness’, ‘transparency in consultation and decision‐making’, ‘promoting a business‐friendly environment’, ‘controlling multi‐level regulatory activity’, and ‘evidence‐based policy’. In this paper, we argue that the multiple and contingent identities attached to IA in Europe can be explained by linking policy ideas to instruments. Policy ideas – it has been argued recently – have vehicular qualities and travel across countries easily, especially in a dense institutional multi ‐level setting like the European Union. Policy innovation ideas travel because they have talisman ‐like properties – they can be accepted by different stakeholders because each of them projects different meanings on a given innovation. Hence they adopt the same innovation for different reasons. However, the literature has failed to add that this multiplication of meanings and policy frames associated with a policy innovation can also lead to an escalation of goals, attempts to manipulate the content of the innovation, and ultimately, has Riker has shown, lack of social choice equilibrium as a result of the high number of dimensions. The result is that a policy tool’s capabilities are exaggerated to the point that a ‘capabilities‐expectations’ gap is created. Another consequence is that the overall coherence of the policy mix of ‘better regulation’ policies decreases, since it becomes difficult to pin down what exactly IA has to do in the mix. Such mechanisms of manipulation cannot be sustained – politically, economically or in terms of social legitimacy. Eventually, it becomes impossible to choose what an IA should do for the complex, multi‐dimensional constellation of actors involved. We examine this explosion of aims, manipulation, and the resulting disequilibrium associated with IA, empirically, by looking at different types of documentation (parliamentary hearings and inquiries, submissions to consultation, and official statements of governments, agencies, business associations and stakeholders) for the UK and the European Union. We conclude that what superficially looks like

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‘frustration’ and ‘cacophony of voices’ is instead a complex mosaic of political manipulation. Empirically, the paper contributes to a deeper understanding of the political properties of policy instruments. Theoretically, we offer insights on the interplay among ideas, instruments and politics. The paper ends by trying to offer a more realistic account of what IA can do than those presented by decision‐makers and stakeholders. With more humble approaches to policy innovations it may be possible to realise collective agreements between policy actors that are sustainable and robust, where values are condensed and expectations controlled. Only by narrowing the gap between capabilities and expectations can the scene be set for the substantive and institutional learning IA is intended to foster.

2 Understanding Administrative Barriers to SMEs in Bulgaria Evgeni Evgeniev World Bank

ABSTRACT The Bulgarian economy has been growing by 6% y-o-y between 2003 and 2008. But, the global financial crisis conveyed serious decline of capital inflows and credit growth, which led the economy into recession (-6.5% in 2009 and -2.5% in 2010, IMF estimates). Achieving pre-crisis growth levels would depend on structural reforms, including continued economic measures to develop a friendly business environment. The current Bulgarian government, which assumed office in July 2009, introduced short-term economic measures aimed at the recovery of the economy. One of the relevant strategic objectives of the new government program is the introduction of legislative and regulatory measures for the reduction of restrictions and bureaucratic obstacles for the development of Bulgarian business, and for the encouragement of foreign investment. There are also a number of particular measures to improve the business environment, envisaged by the government to be implemented by April 2010. However, measures at the mid-term and long-term are still missing, and these are much needed because improving the regulatory environment requires continued government engagement. Badly designed and administered regulations impose major constraints to growth and productivity and create strong incentives for small businesses to remain in the informal economy. Moreover, regulatory and administrative barriers and policy inconsistency, instability and unpredictability, are among the most significant impediments to both foreign and domestic investment. Effective regulatory reform processes and institutional structure improves the business environment by reducing policy risks and cutting regulatory costs for businesses. Hence, the regulatory reform strategy of the Bulgarian government should embrace a systemic approach and build on what has been already achieved. Based on Administrative and Regulatory Costs survey of about 300 firms in Bulgaria, conducted in May-October 2009, comparative data from the World Bank Enterprise Survey and Doing Business (World Bank) on new EU-10 economies, interviews with public officials, business associations and experts, government and IFIs reports and secondary literature, this paper aims to: (i) analyze key government initiatives for reduction/simplification of administrative barriers and their impact on business activities; (ii) discuss overall barriers and key administrative barriers to business activity in Bulgaria and present international case studies on how best-performing countries address the issues; and (iii) propose key policy recommendations

3 The Evolution of Taxi Regulation in Ireland Stephen Weir Institute of Public Administration

ABSTRACT This paper analyses the role of interest groups in the determination of taxi regulation in Ireland during the 1990’s. It uses a game theoretic model to explain the behaviour of the taxi industry lobby

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and politicians in determining taxi regulation over the decade. The paper shows that the taxi lobby exerted significant power over regulatory determinations during the decade. It further demonstrates that as the decade progressed the problems of the regulatory system became more obvious to the public and increasingly cost politicians in terms of votes and credibility. It also shows that the taxi lobby’s inability to compromise to ameliorate the public’s concerns led to the complete liberalization of the industry.

4 The Need for Strategic Approach to Regulatory Reform in the Period of Crisis, in Five Western Balkan Countries Slavica Penev Belgrade Economics Institute

ABSTRACT Regulatory reform in five WB countries (Albania, Bosnia and Herzegovina, Macedonia, Montenegro, and Serbia) was driven by the need for substantial change in their legal systems, from a socialist legal system to a market economy one. This reform process was significantly influenced by international community and, in particular, the EU accession process of the countries in the region. It was focused on the improvement of the quality of regulations and reduction of unnecessary administrative burdens that affect business activities and private investment in the region. The reform process mostly focused on specific sectors and areas, and lacked a strategic approach.

The current economic crisis has strongly affected the regional economies by rapidly contracting their economic activity, primarily as a consequence of a sharp decline in net capital inflows in the region and reduced external demand for the region’s exports. Economic recovery of the region depends greatly on the improvement of its competitiveness. The process of establishing a competitive legal and regulatory environment in the region, as a key element of the investment and business environment, should be among the key reform activities. In order to secure the sustainability of the regulatory reform progress, especially in the period of economic crisis, the countries in the region should avoid re-regulation, re-introduction of state control functions, and excessive and overburdening regulation in general. They should apply a strategic approach, focused on securing so-called “smarter” regulations that would support future economic development and growth of the countries in the region. This process should be strongly correlated with the continuation of the EU harmonization process and with cooperation in that process among the countries in the region.

Panel 6J Regulatory Governance in Network Industries II

1 Regulatory Governance Changes under the framework of Bilateral and Multilateral Agreements Wei Lu EPFL

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ABSTRACT Ever since the beginning of China’s economic reform in 1978, China’s air transport sector has achieved a significant growth pace. The total turnover achieved an average growth rate of 18% in the past 3 decades, about 2 times compared with the world average level. China’s civil aviation industry regulator used to take a self-determined regulatory approach. Past regulatory regime was based on the overall planned economy structure in China before 1992. The main trait lies to the emphasis of scale expansion and central planning for the whole industry. With the development of China’s economy and also the air service market itself, some flaws of traditional regulatory framework become much more obvious and cause some systematic problems for the industry. In the past decade, especially with the entry of WTO and several important air service agreement amendments with parties like US and European countries, regulator for the industry found more and more it bear continuous and heavy pressures from outside interest parties in its air transport sector regulation. Those pressures not only focus on market access and national treatments in market concerned, also require for transparent and consistent regulatory procedures. Also with the integration with the international air service market, China’s air transport industry regulator try to learn applicable institutions and practices from outside world, and try to develop its regulatory regime herewith, be it active or passive. This paper makes analysis based on that background information, and evaluate the real effect of those policy stimulus bought to China civil aviation regulator under the framework of bilateral and multilateral agreements concerned.

2 Flaw in the Governance of the Telecommunications Sector? Wolster Lemstra Delft University of Technology

ABSTRACT Governance regimes are typically sector specific, taking into account the peculiarities of the subject matter. However, failures of governance in some sectors have a wider bearing on the economy than in others; the banking sector is a current example. This also holds for the energy and telecommunications sectors, albeit to a lesser degree. Nonetheless, the network industries show a high degree of similarity in the governance regimes deployed, and the sector reforms applied. In the telecommunications sector, the expectations of successful reform were based on three assumptions: growing demand, technological developments and participation of the financial sector. In this contribution we will discuss how the safeguarding of public values in the telecom sector has become subject of the rules-of-the-game in the financial sector and hence of its governance. As a consequence of the reform new phenomena have emerged: Telecom firms have become subject of trade, to realise short-term financial gains; significant levels of debt and a lack of sufficient cash flow have led to bankruptcy. While these phenomena can be considered to be outcomes of a market- based regime, to be off-set by the gains the regime provides, this does not apply to the new ‘asset class’ of Private Equity backed Leveraged Buyouts. PE-LBO funds make offers that cannot be refused by shareholders, boards and management. Hence, there is no check-and-balance in the form of corporate governance operative. As governments have relinquished control, the targeted firm is left to the ‘forces of the financial market’. The outcome is predictable: financial engineering aimed at a major redistribution of capital, totally contrary to the public interests. We will argue that depending on the role perception of governments we are confronted with a flaw in sector specific regulation, or alternatively governments will need to accept, once again, the role of ‘lender of last resort’.

3 Postal markets and electronic substitution: What is the impact of convergence on regulatory practices and institutions

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Martin Maegli, Christian Jaag EPFL

ABSTRACT The European postal markets are undergoing a reform which aims at promoting competition on the one hand and protecting the benefits of public services on the other. The important topics concerning postal regulation and the development of markets are (1) the market regime, (2) the definition and financing of universal services, (3) market power control, and (4) emerging electronic substitution of postal services. Even though the decrease in mail volumes due to electronic substitution is discussed in the literature and experts agree that it will predominantly impact the development of postal markets in the future, there is hardly any discussion about the consequences for regulatory regimes and their evolution. Finding an appropriate co-evolution of regulation and market development is one of the primary challenges of postal reform. The crucial question therefore is whether the increasing convergence of postal and telecommunications markets also causes a convergence in regulation. The postal sector is not entirely different from other network industries, except for the lack of a physically installed infrastructure while postal networks are rather virtual. The postal network is very labour intensive and not subject to high investments or sunk costs. In a disaggregated approach to network regulation, postal markets are often analyzed along the value chain (including clearance, transportation, sorting and delivery of items). Telecommunications markets are described based on their various network layers. Following the disaggregated approach, the telecommunication network can be analyzed as consisting of a passive network layer including infrastructure (e.g. cables in the underground), an active network layer which sends and receives signals and a third layer which represents the services and applications provided on this infrastructure (see figure below). So far, postal regulation focuses on process steps and quality whereas regulation in telecommunications focuses on those infrastructure layers which constitute monopolistic bottlenecks. The postal universal services definition includes a minimum range of products and services including the accessibility of the postal infrastructure as well as quality and frequency requirements. Postal operators more and more invest in digital products and combine them with traditional physical postal services (e.g., electronic P.O. Boxes and hybrid post solutions). Furthermore, they increasingly aim at installing secure digital identities for their customers to provide safe electronic communication. They therefore provide complementary products and applications on the network operated by telecommunication providers. The European Universal Service definition of telecommunication does not include those services and applications but requires the physical interconnection between households at affordable prices. Nevertheless, the possibility of postal operators to develop applications in a digital environment also allows for creating hybrid solutions in combination with products of the universal service. This increasing convergence between postal products and telecom applications is a new phenomenon which needs an according co-evolution of regulation. Which parts of current regulation will become redundant? Is there additional regulation needed due to new bottlenecks or changes in consumer behavior? In our qualitative analysis, we investigate the impact of intermodal competition and growing convergence between postal and telecom services on regulatory institutions and regulatory governance costs. We set up a comparison between the networks and compare the scope of universal services and issues concerning market power regulation in the two different industries. Finally, we derive several regulatory policy implications for postal services based on or combined with electronic solutions and how regulation could deal with this convergence.

4 Mixing and Matching: Complementing more Traditional Research Methods with Social Network Analysis- Case Studies in Multilevel Regulatory Arrangements: energy and telecommunications in Belgium Joery Matthys, Koen Verhoest, David Aubin, Ghent University, Katholieke Universiteit Leuven, Emmanuelle Mathieu, Karin Ingold ETH Zurich

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ABSTRACT In the post-liberalisation area, utility companies operate in a context of multilevel regulation, involving a wide set of authorities with general or sector-based competencies. The literature points out that the presence of a multitude of regulatory actors may have disadvantages, such as a lack of transparency, redundancy in interventions, high administrative burdens for companies, risk of blame shifting between regulatory actors, and blind spots in rule enforcement. Previous research has tempered these predictions, and pointed out that coordination mechanisms limit the amount of overlaps and blind spots in the multilevel regulatory arrangements. It is therefore necessary for researchers to ascertain the level of coordination between all regulatory actors. In line with Verhoest and Bouckaert (2005) coordination is understood as a process that aims to enhance the voluntary and forced alignment of tasks and efforts of organisations within the public sector. The network of public actors involved in rule implementation, licensing, monitoring and enforcement (Hood et al, 2001) represents a regulatory constellation. Classic research tools can identify structural and procedural coordination instruments, but this gives only a partial view of the interactions amongst these actors, and between public actors and private companies. Social network analysis has the potential to be a powerful new research instrument, complementing data on procedural and structural coordination instruments, thus providing us with a more complete picture of how the different actors interact and coordinate. In this paper, we pose ourselves the question how social network analysis can influence perceptions on the regulatory constellation of two utility sectors in Belgium, energy and telecommunication. We do this by comparing the conclusions of earlier research, which only uses classic research tools, with the results of a Social Network Analysis on the same regulatory constellation.

Panel 7A Effective Banking Regulation

1 The relationship between capital requirements and bank behavior: A revision in the light of Basel II José Filipe Abreu, Mohamed Azzim Gulamhussen Bank of Portugal

ABSTRACT We extend the literature on the efficiency of capital adequacy requirements in reducing risk taking behavior of banks using a representative dataset and new measures for the degree of regulatory pressure. Our dataset comprises a pure Basel I framework period and a period were banks are already strongly involved in the adoption of the Basel II framework whilst maintaining Basel I for regulatory purposes. We use two innovative definitions for the degree of regulatory pressure: a dummy variable with reduced arbitrariness and a variable that allows for a continuous shift of behavior. Our findings suggest that (i) after an adjustment period of the banking system to capital levels above the minimum capital requirements set by the Basel I framework, regulatory pressure associated with low capital buffers seems to lose efficiency; and (ii) that prior to the subprime crisis there was a market perception that the Basel II framework will allow banks to reduce their risk- weighted capital ratios.

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2 Financial Stability and the Institutional Setup of Banking Regulatory Agencies: Is Autonomy Consequential? Jacint Jordana, Guillermo Rosas Universitat Pompeu Fabra, Washington University, St. Louis

ABSTRACT We propose to investigate different institutional setups of regulatory and supervisory agencies in the financial area to systematically predict episodes of economic instability and banking crises across time and space. For this purpose, we have collected data on four organizational features of regulatory agencies: (1) their degree of institutional integration in implementing financial regulation, (2) the separation of the financial regulatory tasks from the country's central bank, (3) the de facto independence of banking supervision regulatory authorities and (4) the extent of formal powers granted to the regulatory entity to monitor bank balance sheets. In line with propositions derived from the literature on delegation, we expect autonomous agencies to deliver superior financial outcomes. We measure financial outcomes in two different ways. First, we trace the incidence of banking crises across countries and throughout time to the regulatory features mentioned above. Second, we consider variation in the observed ratio of bank assets to bank liabilities (both aggregated at the country level). Banking crises and financial stability are the dependent variables in our analysis.

We have so far collected data for 60+ countries, based primarily on OECD and Latin American economies, and an additional set of "large" countries (populations over 40 million), all observed throughout the 1971-2008 period. Aside from potential confounders (we control, among others, for rates of economic growth, rates of credit expansion, exogenous shocks, and political regime characteristics), we seek to control for temporal dynamics in our dependent variables and, particularly, for the possibility of diffusion effects in banking crises. Especially since the 1990s, the occurrence of banking crises seems to follow a diffusion pattern, extending simultaneously in many countries in a short period of time. We anticipate modelling the cross-national diffusion of financial instability across countries by controlling for geographic contiguity and foreign trade exchanges among pairs of countries, as well as country-level financial openness.

3 Another Race to the Bottom? Venue Shopping for Regulators in the American Financial System Colin Provost University College London

ABSTRACT The financial crisis of the late 2000s caused numerous bank failures, particularly in the United States, but many analysts are still determining the precise causes of these failures. One commonly held belief is that the ability of bankers to choose their regulator enables to choose the most lax one, thus resulting in a regulatory race to the bottom. Prior to the financial crisis, commercial banks could be regulated by the Office of Comptroller Currency (OCC) as regular commercial banks, or they could switch their designations to “thrifts” or “savings and loans” and be regulated by the Office of Thrift Supervision (OTS). Additional anecdotal evidence suggests that some banks converted from federal to state charters in order to avoid the more strict regulatory touch of the OCC. In this paper, I examine both banks that failed and survived during the financial crisis, in an attempt to determine the effect of different regulatory regimes. In particular, I focus on the banking departments of different states, as well as the Office of Comptroller Currency and the Office of Thrift Supervision.

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4 Implementing Macro-prudential Regulation: Principles-Based or Rule-Based? Andromachi Georgosouli University of Leicester

ABSTRACT The latest financial turmoil brought into the surface a series of flaws of the system of financial regulation in the UK –particularly with respect to the management of financial crisis. One of them has been the pro-cyclicality of Capital Adequacy Requirements (CARs) applicable to banking institutions. This problem has been attributed to the micro-prudential focus of CARs and, as a response, policy-makers have embarked upon an attempt to transform prudential regulation into a macro-prudential regime. In this vein, there has been much debate about the content of the revised macro-prudential requirements. By contrast, the issue of the proper design of macro-prudential regulatory standards has not received equal attention. In this connection, discussion has been rudimentary and limited to the expression of some occasional concerns about the suitability of FSA’s principles-based approach to regulation. Nevertheless, it is clear that there is a growing consensus in favour of a rule-based regime, as it is thought that this would tighten up macro-prudential regulation and make it more effective. This paper explores the soundness of this position. It considers the design of macro-prudential regulatory standards and has two objectives: On the one hand, to overview the perceived advantages and disadvantages of a principles-based vis a vis a rule-based approach to prudential regulation and, on the other hand, to explore a third possibility, namely the structuring of macro-prudential regulation along the lines of a management-based regulation. It will be argued that, although none of the regulatory approaches is free from problems, a management based approach to regulation seems to be preferable, as it is tailor-made to induce the regulated firms to engage in a planning process that aims towards the achievement of the desired public policy objectives -in this particular case, effective financial crisis management and long-term financial stability.

Panel 7B Regulating the New Media

1 Journeyman to five-tool player: co-regulation and audiovisual media in the UK Daithí Mac Síthigh University of East Anglia

ABSTRACT Media regulation in the UK has traditionally seen a division between State regulation (in the case of broadcasting) and self-regulation (in the case of newspapers), both of course subject to laws of general application. However, co-regulation has emerged as a significant feature of contemporary regulation of the media. With official support and encouragement from UK and EU legislation, and political and regulatory commitment to the ‘light touch’, existing areas of co-regulation such as broadcast advertising and premium-rate telephone services have recently been joined by the new system for the regulation of ‘video-on-demand’ as an aspect of the transposition of the Audiovisual Media Services Directive (AVMSD). At the same time, legislation revising the system for the

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regulation and classification of video games has also been introduced, which would widen the category of games subject to regulation and facilitate the designation of a body other than the British Board of Film Classification as the regulator. The Press Complaints Commission continues to defend the self-regulatory model in the face of some criticism, although the new Press Council of Ireland, in the context of the Defamation Act 2009, is closer to co-regulation than its UK counterpart. The focus of this paper is on the processes by which recent decisions to choose co-regulation has been made, including the positions of governments, parliamentarians, industry, citizens, consumers and interest groups. The model of co-regulation for video-on-demand is placed in the context of theoretical approaches to both Internet and media regulation, providing a link with the debates on carrier and content regulation discussed by co-panellists, and compared with developments in other jurisdictions as the AVMSD is implemented across the European Union.

2 Internet Law and Governance: Co-Regulation as a Constitutional Solution? Chris Marsden University of Essex

ABSTRACT Government’s initial reluctance to intervene directly in Internet regulation reflected the dynamism and technological competence of the industry, and the knowledge and competence gap for governments. This paper considers co-regulation from multistakeholder perspectives: industry, government and civil society, in regulatory and constitutional terms, in order to make more transparent the role of the various co-regulatory cabals which emerge through empirical case studies. The Internet Service Provider (ISP) community has previously attempted to exert a light touch, self-regulatory mechanism that protected user rights due to its very inadequacy: ISPs did not have resources nor incentives to interfere with users’ communications. The nub of the problem is that private actors are carrying out what were previously government functions in sensitive constitutional rights issues: primarily by acting as private censors under government fiat. It will be seen that this 1990s model has become a ‘Paradise Lost’ as government has asked more ever- greater scrutiny and involvement of ISPs with users’ communications, both to support government policies in fighting crime, terrorism and illegal pornography, but also in supporting other private actors’ interests in copyright, defamation litigation, commercial speech and other speech-based restrictions on user rights. Self-regulation is seen as having become inadequate to government needs, driven by large corporate and charitable interests, as the Internet has matured. Co-regulation or direct regulation are supplanting self-regulation. There are four categories of self- and co- regulatory scheme analyzed: 1. Standards 2. Content 3. Filters 4. Governance The individual schemes are in themselves of interest, but this treatment analyzes similarities and differences in their formation, role and evolution, in terms of their willing or unwilling journey from self-regulation towards co-regulation. By examining this broad sweep of speech and technology oriented schemes, and several jurisdictions, this paper brings out the general trends from the particular histories of each scheme and territory. The overwhelming trend is towards much greater government intervention and a grudging and limited introduction of multi-stakeholder fora to represent the citizens’ interest. This in itself is not novel, but in conclusion the paper considers the renewed constitutional illegitimacy of government censorship via co-regulation, a step which courts are actively examining to explore whether continued expression of private censorship is actually becoming an increasingly illegitimate mask for government-directed filtering and speech chilling.

3 Balancing regulatory effectiveness and legitimacy? An examination of internet filtering

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in the United Kingdom TJ McIntyre University College Dublin

ABSTRACT Since 2004 United Kingdom Internet Service Providers have participated in a voluntary regulatory system by which they block users from accessing certain web pages which are determined by the Internet Watch Foundation (a private charitable body) to contain child pornography. This covers the overwhelming majority – over 98% – of UK internet users. The system – colloquially known as “Cleanfeed” – has been described as successful by the UK Government and children’s charities and has served as a model for similar schemes in other jurisdictions. Critics have however raised concerns about the legitimacy of this system and the other uses to which it might be put. It has been said that the Internet Watch Foundation, in deciding whether content is potentially illegal and should be available to UK internet users, is engaged in a form of censorship which properly should be vested in the state and put on a legislative basis. Similarly, it has been claimed that the private status of the Internet Watch Foundation insulates the system from norms of democratic oversight and judicial accountability. The procedures which the Internet Watch Foundation follow have also been criticised as opaque, lacking fair procedures, and conducive to arbitrary and ad hoc decision making. As against these criticisms, however, it might be said that the flexible, non-statutory nature of the system has contributed to its effectiveness and (insofar as it relies on voluntary industry funding and cooperation) may serve to legitimate the system by means of alternative methods of accountability and non-hierarchical governance. This paper outlines the operation of this system, considers these competing arguments and assesses whether there is in fact a conflict between regulatory effectiveness and legitimacy in this context and the extent to which the Cleanfeed system succeeds in meeting the demands of each.

Panel 7C Regulating Law

1 Regulation of Privatized Prison Facilities: On the Force of Ideational, Constitutional and Functional Limits of Regulation Margit Cohn Hebrew University of Jerusalaem

ABSTRACT In November 2009, the Israeli High Court of Justice invalidated a detailed amendment to the Prison Service Law, which introduced a major reform in the management of prison services, previously entirely operated by the state. Under this 2004 amendment, a new prison facility was to be built and operated by a private entity selected by public tender. Powers granted to the franchise holder were to include the exercise of a range of supervisory, disciplinary and punitive measures. Under this model of outsourcing/privatisation, presented as a revamped and enhanced version of the British model of privately operated prison services, regulation was to be provided by a group of on-site supervisors, members of the state prison service. The declaration of the invalidity of the statute by an overwhelming 8 to 1 majority, ostensibly relied upon the impact of the reform on two constitutionally protected human rights—liberty and dignity—but the court’s reasoning contains dicta both on the recognition of core roles of the state, which cannot be outsourced in the existing

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polity, and on the inherent weaknesses of regulation as an ex-post-facto mechanism. Met with public support and tacit agreement in some government corridors, the decision has received limited criticism despite its major constitutional and policy implications. The paper explores the impact of the affair on the future of regulation in a society struggling between at least three possibly competing ideational frameworks. Constitutionalism, or the devotion to the protection of supra-statutory rights and institutional frameworks, is not necessarily served by a commitment to the regulatory state, which in itself is still at odds with remaining political and social beliefs in the power of central government. I offer several interpretations of the affair, from contextual to radical-universal, each of which reflects a distinct account of the force, the limits and the future of regulation as a social-ordering mechanism.

2 The Constitutionality of Privatized Prisons Guy Seidman, Sommer Hillel Interdisciplinary Center, Herzliya

ABSTRACT In November 2009 the Israeli High Court of Justice ruled in H.C.J. 2605/05 The Academic Center for Law and Business, Human Rights Division v. The Minister of Finance that privately run prisons are unconstitutional in Israel. At the time of the decision, the state-of the-art prison was fully built, and ready to be operated by the winners of a public tender. The state is now expected to pay hundreds of millions of shekels in compensation to the operator.

The decision to establish the privately run prison was made by a 2004 statute. At that time, many countries including the United States, Britain and France had all established private prisons. The state had two motivations: to save money by having a more efficiently run prison and to improve prison conditions. Both aims were to be achieved by transferring the management of the prison to a private firm chosen by tender and closely supervised by the state.

A panel of nine justices, presided over by Supreme Court President Dorit Beinisch, ruled that for the state to transfer authority for managing the prison to a private contractor whose aim is to maximize profits would, in itself, unconstitutionally violate the prisoners' human rights to dignity and freedom. The importance of the case lies in the fact that it does not condemn a specific attribute of the private prison, or acted on actual problems in an existing prison, but rather held the concept of privatizing a prison in general unconstitutional, even though it was an informed decision of the legislator, and a common practice in other democracies.

In commenting on the case, Attorney Gilad Barnea, who represented the petitioners, claimed that the ruling "defines the bounds of what is permissible and not permissible in transferring the powers of the state to private hands."

3 The Concept of Regulation in Administrative and Economic Law in Continental Europe, the UK and the USA and the Emergence of the Course «Regulatory Law» - a comparative overview Tatjana Jovanic University of Belgrade

ABSTRACT Regulation is a concept which includes mechanisms, rules, institutions, decisions and principles which enable particular sectors to arise and function while preserving certain equilibriums. The traditional approach to regulation has always been a sector-specific one, but the General Regulatory

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Law encompasses the main principles of State intervention, forms of intervention, methods and instruments of regulation. Therefore, a transversal view which gather this scattered and sector- specific issues and synthesize it in order to provide overall analysis and perspectives. Regulatory Law as an university course emerged in the last decade by transformation of the Public Economic Law (notably the discipline known in France as Droit Public Economique, Droit Public des Affairs), erasing the traditional boundary between public and private law. This meta-juridical discipline is only partially a positive law subject, and it represents one of the legal disciplines where the Sociology of Law has yielded significant impact. As such, this discipline is doctrinally neutral, enabling it to combine various approaches to the analysis of law, including economic analysis, but is however not limited to the concept of the Economic Analysis of Law.

The purpose of Presentation on the Concept of Regulation in Administrative and Economic Law in Continental Europe, the UK and the USA is to compare the existing studies of General Regulatory Law and Regulatory Policy and to try to summarize findings to show common and different issues in the development of teaching. The Presentation itself will be a part of author’s attempt to create an Internet database on all centres of excellence in the field of Regulatory Policy, Regulation, Regulatory Governance and Regulatory law, as well as academic experts in the field, which the author personally needs in order to defend and upgrade this discipline in the university syllabus at the Faculty of Law of the University of Belgrade.

Panel 7D Conceptual and Theoretical Analysis of Regulation

2 The Royal Commission into the 2009 Victorian Bushfires: A Lens into Regulatory Failure Graeme Hodge, Arie Freiburg Monash University

ABSTRACT A series of bushfires in Victoria, Australia, resulted in the deaths of 173 people in 2009, as well as hundreds of homes and extensive property losses. As part of the state government’s response to this catastrophe, a Royal Commission was established to inquire into these events. The objective of this Commission was to establish how these events had occurred and ensure that appropriate steps were taken to avoid such catastrophes in future. This paper aims to review the work of the Royal Commission through the lens of regulation. It articulates the many ways in which regulation, whether formal or informal, failed across the public sector, the private sector or civil society. It also looks at the role of the Royal Commission itself as part of the regulatory review process.

Given the high level of this inquiry, its generous resourcing and its extensive powers, a Royal Commission such as this theoretically presented a valuable opportunity to review regulatory frameworks, determine what does and does not work in regulation and propose evidence-based

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options for reform.

There appear to be many causes of the fires. Some appeared to have been a result of electricity assets privatised a decade ago. A long term tension had also existed between the desire for a greener and more natural housing environment amongst trees as against a cleared but perhaps less fire prone neighborhood. Separate institutional arrangements existed for metropolitan and country fire fighting. Moreover, the effectiveness of warning systems operating around the time of the fires as well as the existence of a ‘stay or go’ choice made by local householders were possibly two further contributors to the tragedy.

This paper comments firstly on the different disciplinary discourses which have dominated the inquiry (such as legal, economic and public policy) and discusses the degree to which they assisted in policy development. It then argues that although the Commission has been effective in grappling with the multiple meanings of regulation, the inquisitorial and legalistic style of the Commission’s hearings may have deflected attention away from broader issues of policy and system failure by focusing instead on the diffusion of risk towards specific institutions and individuals. The paper concludes that the Commission process is only one aspect of the broader issues of public accountability and allocation of risk in a highly politically charged environment. A greater understanding of such political dynamics in regulatory reviews is needed if we are to better shape regulatory systems.

2 Regulatory Autonomy in the European Postal Sector Sandra Eckert University Osnabrück

ABSTRACT Agency autonomy in Europe is a complex phenomenon referring to formal as well as informal aspects and to relations between various actors within a multi-level regulatory space. Formal independence is by now a relatively well developed and researched concept thanks mainly to the quantitative comparative research conducted by Fabrizio Gilardi (Gilardi 2005a; 2007), whereas our understanding of de facto independence is still underdeveloped. This is a serious shortcoming given that empirical studies (e.g. Maggetti 2007) have found that formal independence is neither a necessary nor a sufficient condition for explaining variations in the de facto independence of agencies. Another drawback of the state of the art is that analysis has very much focused on the role political actors continue to play post-delegation, and not so much on the regulator’s relationship with the regulatee, other non-majoritarian institutions and a wider range of interested parties. Seeking to offset these shortcomings, the paper first develops a comprehensive concept of regulatory autonomy which it then applies to the case of postal regulation in France and Germany. The findings suggest that formal and de facto independence of regulatory agencies may diverge considerably across countries and over time: France exhibits a high level of formal independence combined with a low level of de facto independence, while the opposite pattern holds for Germany; in France actual autonomy has consistently been limited over time, while in Germany there is substantial longitudinal variation in accordance with changing political considerations. Across levels we have not seen the emergence of a sector-specific regulatory network so that the informal modes of coordination between national ministries and regulators continue to be purely intergovernmental in nature. Both national politico-administrative cultures and the political salience of policy-making are found to be important explanatory factors for the degree of regulatory autonomy in the sector.

3 Coordination, coordination, coordination…and its regulation. How the Lisbon Strategy affects EU law. Stijn Smismans Cardiff Law School

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ABSTRACT In this paper I will analyse whether and to what extent the Lisbon Strategy has influenced the nature of EU Law. . The place and nature of EU law in the Lisbon Strategy has mainly been addressed in the literature on new modes of governance. Focusing in particular on the instrument of the Open Method of Coordination, both legal scholars and political scientists have talked about a shift from hard law to soft law. In Community terms this translates as a shift from ‘harmonization’, as a central device in the realisation of the Single Market, relying on binding European regulation adopted through the Community Method, to ‘coordination’ as the central device of the Lisbon Strategy. Since the 2000 Lisbon Summit coined the concept of the ‘Open Method of Coordination’(OMC), ‘coordination’ has without doubt become one of the most prolifically used eurojargon words of the last years. ‘Coordination’, however, has many dimensions, and is not limited to the OMC. It is part of the broader ideational repertoire of the Lisbon Strategy, together with concepts such as ‘competitiveness’, ‘sustainability’ and ‘knowledge-based society’. More than any other concept in the ideational repertoire of the Lisbon Strategy, coordination is the core discursive device used by policy actors to structure the organisational components of the Lisbon governance architecture, both in the set-up of the explicit politico-organisational machinery as in the selection of policy instruments and procedural requirements.

Therefore, to understand the effect of the Lisbon Strategy on EU law we need to go beyond the general claim ‘from harmonization to coordination’, or from hard law to the soft OMC. Rather we need to understand the multiple dimensions of ‘coordination’ as a central ideational and organisational device of the broader Lisbon Strategy, and then analyse how this central device of the Lisbon governance architecture influences the nature of EU law. Therefore, in the first section, I will analyse the main discursive uses of the concept of coordination in the Lisbon Strategy. One can identify four main discursive uses of the concept, although they are strongly intertwined. In the following sections, I will analyse whether and to what extent these different dimensions of coordination influence the nature of EU law. I will formulate three hypotheses on how the Lisbon Strategy, as a governance architecture composed of both ideational and organisational components, affects European law. I expect the Lisbon Strategy to affect the amount of European legislation (namely reducing it); to change the nature of EU law (namely, providing more procedural and ‘hybrid hard-soft’ measures; and to affect the case law.

4 Delegation to Independent Competition Authorities: Explaining Variation in Formal Political Accountability Christina Koop European University Institute

ABSTRACT

Independent regulatory agencies have come to play an key role in the enforcement of regulatory policies in the past decades. Especially in economic regulation, they enjoy far-reaching competences. Yet as their importance in the policy-making process has increased, so has the criticism directed against their insulation from the democratic process. As they operate at arm’s length of central governments, the agencies are largely exempted from the accountability mechanisms which are traditionally associated with the ministerial hierarchy and the chain of delegation. As a consequence, the bodies are, ceteris paribus, exposed to more opportunities to shirk, and to misuse their powers.

The absence of traditional accountability mechanisms can be compensated in a variety of ways, and by a variety of actors. The agencies can be held accountable by such bodies as audit offices, ombudsmen, professional peers, interest groups and the public at large. However, the most

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stringent form of accountability still is accountability to the political principal. Agencies are dependent upon governments and parliaments for their regulatory competences, and typically also for their resources. Moreover, they can be subject to provisions which oblige them to inform politicians about their activities, or provisions which enable politicians to take corrective measures in the case of neglect of duty.

In practice, the degree to which such provisions are incorporated into the design of agencies varies considerably from one country to the other. So far, the question of why some agencies are subject to a whole range of accountability instruments, whilst others are nearly exempted from accountability obligations, has remained largely unaddressed. This study takes a comparative perspective and maps the differences in formal accountability of competition authorities across EU and OECD countries. This descriptive part will then form the starting point for an analysis of the determinants of the variation in political accountability.

5 Delegation to Independent Competition Authorities: Explaining Variation in Formal Political Accountability David Coen University College London, London School of Economics

ABSTRACT Abstract unavailable currently

Panel 7E Regulating Healthcare

1 Effects of performance measurement in Dutch hospital care Emiel Kerpershoek Delft University of Technology

ABSTRACT New Public Management and the consequent liberalization programs that took place in various North American and Western European countries have increased the demand for accountability of professional organizations in the public sector. In response, many systems of performance measurement (PM) have been introduced in the public sector to increase transparency and efficiency. In this development professional autonomy is often perceived to be a barrier for such external regulation. Literature shows that PM in professional organizations can have both beneficial and perverse effects. On the one hand PM can enhance transparency, learning and innovation. On the other hand PM can conflict with professional values when it interferes with professional the organization of professional work. This paper explores the effects of PM in Dutch hospital care and the strategies that medical professionals apply in dealing with this system, based on a qualitative comparison of two case studies (i.e. a university hospital and a general hospital). For this purpose, a large number of interviews was conducted with medical specialists, managers, professional

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associations and health insurance companies in the Netherlands. Analysis of the interviews revealed that the autonomous position of professionals enables various forms of strategic accounting. However, the underlying motivations appear to vary. Strategic accounting can be perceived as opportunistic and self-serving behavior on behalf of the professional. It can also be perceived as a coping mechanism that is applied by professionals in order to make the system work in practice by coping with unintended effects of PM.

2 Measuring the effects of regulatory interventions on the quality of health services Eric Koornneef Trinity College Dublin

ABSTRACT Over the last two decades the notion of a small government with a separation between the delivery or administration of public services and strategic oversight and policy development role has gained influence across the world. The term New Public Management is frequently used to describe this political vision of a more strategic, oversight role of government. The often used analogy to describe this process is that governments should primarily ‘steer’, rather than ‘row’ (Lewis et al, 2006). In many countries the implementation New Public Management policies has led to the creation of new agencies at arm’s length of government, including regulatory bodies in the healthcare setting. The establishment of regulatory bodies for healthcare settings is primarily motivated by the goal of providing assurances to the public and to improve the performance of public services through a range of regulatory interventions (Walshe and Boyd, 2007). Although regulation in healthcare has become a key feature in many countries surprisingly little is known about the actual, cumulative effects regulatory interventions have had on the quality of healthcare provision. In the healthcare sector, governments have created regulatory systems to not only control compliance with legislation and standards to protect individuals and communities from harm but also to improve the quality of services (Scrivens, 2007). The overall aim of this research study is to gain a better understanding of the role and impact of regulatory interventions on the performance of health services by analysing the way regulatory interventions impact on the quality of healthcare service delivery, and, in turn, on the outcomes for users of these services. The figure below shows the five research questions addressed by this study.

3 Independent regulatory agency: Inadequate institutional design/configuration or ineffective external control? Maria Antonieta, Almeida Pimenta Universidade Federal do Rio de

ABSTRACT Independent regulatory agencies are an innovation in the field of public management. However, this organizational model has been criticized by experts in Brazil and in other countries, mainly due to its independency / autonomy level, due to the insufficient or total lack of control, and also due to the possibility of capture. Regulatory capture by the market, either by opportunist politicians or by the agency staff is a great challenge. If the institutional design of the regulatory agencies is supposed to provide gains in terms of effectiveness and credibility of the regulation processes, how to make sure these organizations do not divert from their goals? The main objective of this study was to analyse the forms of control of the Brazilian Supplementary Health Agency (ANS), which is responsible for the regulation of the market of private health plans. The central question was whether this control effectively managed to avoid regulatory capture and to guarantee its autonomy and independency in face of political opportunism. The methodology used to evaluate ANS involved the review of control reports by the Federal Court of Accounts (TCU)

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and the societal input. Three main results were achieved: (1) civil society knows little about ANS and this compromises their participation in the control and in the decision making processes; (2) even though the agency carries out actions that allow for more transparency and participation, like public consultation and technical groups, these mechanisms must be improved so that they are used more effectively; (3) despite the fact that the TCU has been making an effort to adapt to the new requirements posed by the federal government, including the creation of a specific unit to control the regulatory agencies, there has been a deficit of enforcement in this area. The study has identified that it is very important to change the institutional design of ANS, but it is even more necessary to perfect the control practices over the government , breaking away from Brazil´s weak tradition in this area.

Panel 7F The Role of Scientific Evidence in Food Safety Policy: Challenges and Limits

1 EU GM Food Regulation: Lessons from a severe case of the Emperor's new clothes Shane H. Morris, Ewen Mullins, Charles Spillane University College Cork, Teagasc Crops Research Centre, National University of Ireland

ABSTRACT In June 2009, the EU commission launched an evaluation of the legislative framework on GM food and feed. In addition, the EU's regulatory framework for GM crop/foods is unlikely to be sustainable in its present form, particularly given the rapid pace of advances in plant biotechnology. This paper examines the regulatory history and key drivers at the science-policy interface that have led to current issues and future problems faced by the EU’s GM crop/food regulatory framework. Lessons learned from EU GM regulation are analysed and key considerations for the future of Europe’s regulatory framework are assessed. In essence, the GM regulatory fiasco has largely been a construct of past policy decisions to choose a process- rather than a product-based approach to regulate new plants or foods, including GM crop varieties. Based on an analysis of current scientific risk assessment a more appropriate regulatory framework, better reflecting the idea of the precautionary principle, would focus on comparatively assessing the potential environmental and health risks versus the benefits of a product, rather than overly focusing on (often hypothetical) risks regarding the process through which the product a new plant variety was created. In doing so, a firmer base would be established creating a more robust starting point from on which to base cost benefit analysis of the particular application of modern plant biotechnology.

2 Reflexive Governance and the Regulation of Beef Imports to the EU James Lawless University College Dublin

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ABSTRACT The European Community's (EC) regulation of bovine meat and meat products has been marked by considerable international conflict over food safety and veterinary public health standards. The ban on the use of growth-promoting hormones in cattle prompted the establishment of the SPS Agreement and an ongoing dispute in the World Trade Organization (WTO). The BSE crisis forced major changes in European food law and regulation, as well as the establishment of a very stringent control regime for beef. The implementation of the existing regime continues to create significant tensions internationally, with the EC restrictions on Brazilian beef imports in 2008 condemned as 'unjustified, arbitrary and disproportionate' . Given the complexity of Community rules in this area – composed of an intricate panoply of product and production standards, veterinary and agricultural processes and regulatory infrastructure – this poses a considerable challenge for competent authorities (as implementers) and the Food and Veterinary Office (FVO) of the European Commission (as auditors of implementers). Beef imports to the EC are required to satisfy food safety and veterinary public health standards 'equivalent' to those set out in Community legislation. The complexity of Community rules is therefore heightened when the EC attempts to regulate beef from third countries. Reflexive processes, whereby regulators and regulatees engage in deliberation, learn from the experiences and perspectives of the other and, change their norms and modes of operation as a result, is a process which is often needed for successful regulation in complex and uncertain areas. This research will investigate the degree to which reflexivity has acted to overcome tensions in EC control of third country beef imports.

3 Law and Governance in European Food Safety Regulation - The Case of GM Food Maria Weimer European University Institute

ABSTRACT In this paper I take 'governance' as an analytical approach to investigate the role of law in structuring action co-ordination among different (public and private) actors involved in the regulation of food safety at EU level. In particular, I will analyze the legal framework for the authorization of GM food in order to determine the governance structures / modes provided by it. I suggest understanding the term governance not as a particular innovative practice, which in the discussion on 'new forms of governance in the EU' is commonly contrasted with hierarchical regulation, but as an analytical perspective that perceives all political action as decentralised collective action co-ordination between interdependent actors, be they national or supranational, private or public actors. The legislative framework for the authorization of GMOs is, in this perspective, perceived as a form of meta-governance, which provides for an institutional framework to organize the co-ordination between different actors involved. The purpose of the paper will be to determine the modes of governance that dominate within the institutional framework for GMOs (hierarchy, networks, market...); to examine the role and power of the various actors involved (industry, NGOs, public authorities at EU and national level, judicial actors at EU and WTO level...); and, finally, to answer the question of whether the kind of governance provided for by the legal framework is effective measured by the regulatory objectives in this field (does law in this context provide for effective governance or does it hinder it, and how?).

4 A Standard of Review in Food Safety Related International Trade Disputes. Some New Developments Lukasz Gruszczynski Polish Academy of Science

ABSTRACT The paper addresses the problem of a standard of review (i.e. the level of intensity of the scrutiny

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that the reviewing body exerts over the decision or regulation being reviewed), which is applied by WTO panels in sanitary and phytosanitary disputes when assessing national scientific determinations. In particular, the paper analyzes how the new standard that was set out the Appellate Body (AB) in US/Canada - Continued Suspension of Obligations in the EC – Hormones Dispute is actually applied in practice. The panel report in Australia – Measures Affecting the Importation of Apples from New Zealand, which is expected in January 2010, is the first opportunity. This analysis will be a good basis to explore the vertical allocation of power between the WTO dispute settlement bodies and national governments in the area of food safety regulation. The Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) is one of the central legal instruments in the area of international food safety. As a general rule, it requires scientific justification in the form of risk assessment for all national SPS measures that affect international trade. The early SPS case law tended to adopt rather intrusive standard of review, which allowed WTO panels to assess quality, persuasive force and correctness of the national scientific determinations and substitute them with their own. This approach had an obvious impact on the allocation of power between the WTO and its Member States, favoring international over national level of governance. The recent decision of the AB in EC – Hormones II constitutes an important shift in the WTO jurisprudence. The AB opted for more deferential standard of review that gives an additional margin of direction to national governments when regulating SPS risks (including food-borne risks). The panel report in Australia – Apples will be the first one to elaborate on the AB’s findings and apply them to the specific circumstances of the case. The report is of particular importance as it will shed a light on the future direction of the SPS case law and clarify the relationship between prerogatives retained by the Member States and supervisory powers of the WTO.

5 The European Food Safety Authority at the judicial gate. Some reflections upon the judicial review of EFSA scientific opinions by European Courts Alberto Alemanno HEC Paris

ABSTRACT As countries around the globe embrace regulatory reform programmes in order to improve the effectiveness of regulatory outcomes, there is a growing recognition that ex ante analysis of likely impacts of regulatory actions is the best way to attain this goal. Typically the focus of the different analytical tools developed by countries to undertake such a prospective analysis concern the impact of regulatory action within their own jurisdictions. Yet today an increasing proportion of regulatory reform programs reflect a growing awareness of the international context. Thus, both US OMB Circular A-4 and the EU Impact Assessment Guidelines, although largely geared towards domestic impacts of regulations, mandate the regulators to consider the international trade and investments effects of their respective regulations. As a result, analytical methods such as regulatory impact assessments and benefit-cost analysis encompass not only domestic but also international impacts of regulations. This paper, after examining the rationale for such a reorientation and expansion of impact analysis as well as the different methods used to predict also international impacts, will offer a critical assessment of the possible legal implications stemming from such an ex ante scrutiny on the trade effects of proposed rules. In so doing, it will investigate to what extent such an exercise might be accommodate within the WTO legal order and, in particular, whether it might raise some problems in case of litigation stemming from the adoption of a rule whose foreseeable effects had been previously identified by the author country.

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Panel 7G Regulating for Sustainability in the Global South

1 Regulating for sustainable development: an evaluation of electricity regulators in India Gopal Krishna Sarangi TERI University

ABSTRACT Regulatory regime in an economy, it is argued, to a substantial extent is shaped by the existing institutional and policy construct. When the institutional and policy transformation occurs in tune with the change in the socio-political-environmental objectives of an economy, this necessitates wider regulatory space to incorporate such changes in policy agendas. Regulatory entities are found to be safe and feasible conduits to implement broader sustainable development goals of any economy like climate change. India reformed its electricity industry structure and created a new set of institutional arrangement of regulatory bodies in the electricity industry in the late nineties. Over a short span of time, these regulatory entities have broadened their spectrum of activities beyond their sectoral goals. While this sounds quite fitting for a country like India where considerable attention is needed to pay to these sustainable development concerns, economic efficiency businesses also require equal attention. Aligning these two is not only difficult but also complex as the permissible limit to trade off these conflicting goals are unknown in a developing country context. Regulatory instruments and market based tools are frequently used with varying proportions and combinations to meet these overarching sustainable goals of the economy. It appears that given the lack of experience in managing these critical societal concerns has resulted varying levels of outcomes. Setting this as a background, the study examines following set of research questions; - To identify and isolate regulatory activities which are designed to implement sustainable development goals. - To examine the market and non-market forces widening the regulatory space to meet broader societal goals. - To assess the heterogeneity in approach to address sustainable development concerns in different settings at sub-national levels.

2 How can low-income countries gain from a climate negotiation Framework Agreement? Nicola Cantore, Leo Peskett, Dirk Willem te Velde International Development Institute

ABSTRACT Climate change negotiations can have more important welfare consequences for poor countries than other negotiations such as the current WTO Doha round. We review key negotiation issues in the run-up to Copenhagen climate change negotiations, set out key scenarios and model their effects on incomes in poor countries.

We consider three main negotiation issues on which we build our scenario analysis: emissions reductions, technology transfer and climate finance. Using an Integrated Assessment Model we find that sub-Saharan Africa (SSA) can gain 1% of (accumulated) GDP by negotiating strong emission

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reductions (e.g. 80%-95% cuts on 1990 levels by 2050) in developed countries, but would lose up to 2% of GDP if it takes on emission reductions (15% by 2020) itself. Cheaper green sources of energy induced by technological change in developed and developing countries raise incomes of developing countries considerably.

Climate finance to Africa for adaptation and mitigation can raise SSA incomes, but it is crucial to understand which levels of finance to negotiate for. We consider two different scenarios based on estimations from the European Commission (EC) blueprint and the World Bank (WB). When we assume a 15% emissions reduction for Africa by 2020 and financial transfers from rich countries to Africa worth $ 8.7 billion per year (in 1990 prices) on the basis of the EC blueprint estimates, we find that this scenario leads to a loss in GDP compared to a Business as Usual (BAU) scenario in which no action to reduce emissions is taken.

According to the WB estimates, scaled-up climate finance transfers worth around $ 32.3 billion per lead to a gain of around 0.2% of GDP (again assuming Africa is subject to a 15% emissions constraint by 2020) compared to a BAU scenario.

The scenarios of greatest economic value to Africa are those in which there are ambitious cuts in developed and large developing country emissions, large finance packages but no specific emissions constraints for poor countries, in which case transfers from rich to developing countries enhance growth, reduce emissions and allow an earlier introduction of domestic purchases of backstop technologies. This scenario would raise Africa`s GDP by up to 6% (compared to BAU) and would provide environmental effectiveness.

3 Responding to the Multiple Crises: Adequacy and Appropriateness of the New Water Regulatory Systems in the South Asia Sachin Warghade, Subhod M. Wagle Tata Institute of Social Sciences

ABSTRACT The global financial crisis has aggravated the precarious financial conditions faced by state-owned water sector agencies in South Asian countries. At the root of these precarious conditions are the performance and governance crises that have plagued the state-owned agencies in the region. The challenges created by these crises are would be aggravated further by looming environmental, social, economic, and political challenges due to the impending climate change.

The paper begins by identifying and elaborating the challenges posed by the abovementioned crises, as well as the challenges posed by climate change, including the socio-political challenges pertaining to equitable water distribution. In the second part, the paper lays down the key characteristics of the new independent regulatory agencies (IRAs) and regulatory systems being established in the water sectors in South Asian countries. This section primarily relies on the special IRA laws passed by the three big Indian states as well as similar laws from Sri Lanka and Nepal. Based on the first two sections, the third section engages in critical assessment of the design and dynamics of the new regulatory system to check its adequacy and appropriateness in order to efficiently and effectively address the challenges posed by the abovementioned multiple crises. In addition to the analysis of documents, the paper also draws from regulatory interventions done by the authors.

The major conclusion is that the principles and objectives on which these systems are predicated are inappropriate and inadequate to address the challenges, while the vision underlying these principles is narrow and myopic. Further, the result of efforts of policymakers to translate these principles and objectives into the laws and other policy instruments seem to have created woefully inadequate products. Similarly, the dynamics resulted from the efforts to implement these policy instruments

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Panel 7H Balancing Regulation and Competition Policy

1 Competition Policy and Regulation in Turkey: Friends or Foes Fuat Oğuz Başkent University

ABSTRACT While the United States and European countries have a long history of interaction between antitrust and regulation in implementing competition in industries, Turkey’s very short history drives both institutions to a cautious deference toward each other.

Which one is more efficient and more enduring under the political process of regulating industries? In this paper, we discuss the tension between CA and regulatory institutions on competition policy in regulated industries. In this paper, I will discuss theoretical arguments for and against sector specific regulation of industries. Then, I will turn to the Turkish experience and discuss recent decisions by the Competition Authority briefly. In the end, I will address the question of economic efficiency and political determinants in implementing competition.

In Turkey, competition in regulated industries is a relatively new issue. The Competition Authority (CA) began to work in 1997 and independent regulatory agencies (IRA) came into existence a few years later. Regulations in energy, telecommunications and banking have begun to be implemented since 2001. CA has the authority over competition in the country in all industries as a general rule. Independent regulators rule on competition in those industries. In regulated industries competition has become a secondary issue most of the time because of political preferences and regulatory capture. This brings us to the question of how to design and implement competition policy in regulated industries. Should we set rules so that a general competition law that applies to all markets without exception, or should a long list of exceptions be attached to the general rule to define and describe competition in these industries? Politicians, regulators and economists tend to answer these questions differently.

In Turkey, the cautious deference of the Competition Authority toward regulated industries does not solve any problems. The experience of other countries and public choice considerations take us to advocate for a more independent structure for competition. While the best way to do this through judiciary, the current legal framework limit us to the Competition Authority and regulatory authorities.

The reality in Turkey shows why we need more than mutual understanding in implementing competition in these industries. Boundaries should be set straight. However, economics and politics conflict in this matter. Government desires to control competition in regulated industries. The judicial protection of competition is usually an exception.

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In the end, regulation and competition can become foes more easily than friends. While complementarity may increase social welfare, substitution is more realistic politically. As a result, I argue that antitrust-based implementation of competition policy in network industries, such as telecom and energy, would be more influential and provide a ground for a complementary structure of antitrust and regulation.

2 Rights and Competition Policy: Theorising the practice of the Australian regulator Vijaya Nagarajan Macquarie University

ABSTRACT The Australian process for the competition regulator to authorise anti-competitive conduct on the basis of ‘public benefit’ is a distinctive one. The path followed by the regulator in its early years of the seventies, was based on the philosophy of dialogue and responsiveness, which fell away during the nineties as the regulator took on the responsibilities of a deregulated market and a decentred regulatory environment.

Using a combination of qualitative and quantitative methodologies, this paper studies the manner in which the term ‘public benefit’ has been interpreted. The Australian Competition and Consumer Commission (ACCC) experience can be described as a a triumph of practice over theory – the ACCC has recognized economic efficiency factors as well as non-economic efficiency factors; encouraged governance networks and promoted equitable dealings as a means of monitoring powerful players in a decentred market; and facilitated the incorporation of a dispute resolution mechanism into Codes of Conduct thereby proceduralising self regulation. However this extemporized practice has resulted in inclusivity deficits that have grown over time. This approach, while experimental and outcome driven, remains ad hoc and under-theorized, and comes at a great cost.

It is proposed that the ACCC should reassess its performance, developing overarching principles which are founded on a discourse that is more universal than economic efficiency and with a fundamental commitment to inclusivity. With this in mind a principle-based approach to locate public benefit is suggested. The first principle provides a broader theoretical framework for defining public benefit by identifying the main human rights that embody public benefits and secondly, by extracting the immanent rights that have been recognized by the regulator in practice. These two sets of rights are used to create a set of heuristics, which become principles defining public benefit, while providing sufficient flexibility to accommodate regulatory challenges.

3 The Prominence of Takeovers in the Evolution of the Electricity Sector in England: the Weight of State Activism and of Institutions Michel Goyer, Rocio Valdivielso Warwick Business School

ABSTRACT We analyse in this paper the determinants behind the prominence of takeovers in the evolution of the electricity sector in England. The English case is unique in the European Union in regard to the importance of foreign ownership following two important takeover waves. What account for this specific outcome? We analyze the respective influence of two theoretical perspectives: state activism and varieties of capitalism. The former emphasises the importance of the choices of policy- makers in the design of regulatory frameworks; the latter highlights the importance of institutions on the process by which firms coordinate their activities and its impact on policy-making. We argue that these two theoretical perspectives complement each other in accounting for the prominence of takeovers in the electricity sector in England. Policy-makers often implemented policies that went

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against the wishes of top executives of electricity companies; the sets of institutions faced by firms in England rendered them vulnerable on the market for corporate control. Moreover, we also highlight how each theoretical perspective illustrates shortcomings associated with the other. State activism highlights how process of policy-making expand beyond the narrow coordination needs of domestic companies; the varieties of capitalism testifies how institutions mediate the impact of the set of preferences of policy-makers on major outcomes. The paper concludes by highlighting how these two theoretical perspectives should be better integrated in the study of regulation.

4 Joined-Up Regulatory and Competition Policy using the Case of the Bundling of Communications Services Pat Kenny Commission for Communications

ABSTRACT This proposal addresses the notion of joined-up regulatory and competition policy using the case of the bundling of communications services as an example.

In the communications sector ex ante regulation is imposed with a view to creating the conditions whereby sustained effective competition can be fostered. Once this position is reached ex ante regulation should be rolled back.

Many commentators fail to fully take cognisance of the transformative agenda inherent in communications regulation and tend to view ex ante regulation as just competition rules applied in another, more efficient, route. This is a mistake.

Regulation is not just a restatement of competition law restrictions on dominant operators but rather a series of restrictions on behaviour which (if properly applied) should minimise the probability of any breach of competition law being breached.

The recent settled litigation between ComReg and Eircom on bundling (and the current consultation) is a perfect example of these concepts. In a competition setting bundles of products can raise a concern of margin squeeze when firms are reliant on key inputs from the incumbent. The tests for an anti-competitive margin squeeze are well known. The question is whether attempting to control incumbents on this limit is the proper regulatory approach whilst competition is only beginning to emerge?

The paper will argue that there is a proper role for regulatory burdens in excess of those required by competition law in those circumstances. This involves a trade-off between consumer's short term interest in lower prices against their over-riding interest in the emergence of a stable, self sustaining, effective competition in the longer term. These remedies can be progressively removed as competition becomes more established, such that, in the limit regulatory burdens are removed and the sector reverts to control of bundles under standard competition rules.

Panel 7J Regulating Water

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1 The value of water: is the concept useful for policy making? Vania Paccagnia Environment Agency

ABSTRACT Water policies in England and Wales pursue a variety of objectives - from reversing over abstraction to adaptation to climate change - through a mix of policy instruments. Current policy mix was introduced some decades ago and might not be able to tackle effectively future pressures arising from population increases and climate change. Recent reviews, commissioned by the Government, have reiterated how existing instruments should be reviewed and new policy instruments introduced to face these challenges. The thrust of both the Cave and the Walker reviews is that water, to be managed sustainably, should be priced to consider its “true” value. Economic literature has extensively analysed this concept, by discussing different components of the value of water. Nonetheless, there is still a gap between theoretical findings and how they are applied in practice. This paper, by reviewing the concept of the value of water and its practical applications, discusses the issues that need to be tackled when implementing pricing policies to apply economic principles. Pricing instruments will be analysed against a set of criteria by considering theoretical findings and empirical evidence. Their interaction with other policy instruments will be considered. In its conclusions the paper will assess desirability, feasibility and effectiveness of pricing policies in attaining regulators’ objectives.

2 Implementing privatisation and liberalisation reforms through mutual adjustments between levels of government: the case of the implementation of the water reform in Italy (1994-2006) Alberto Asquer University of Cagliari

ABSTRACT The scholarly literature on regulatory reform has often remarked the mismatch between policymakers' declared objectives and the actual results attained when implementing privatisation and liberalisation policies (Newbery, 1999; Gómez Ibáñez, 2003; Landy et al., 2007). The failure to meet policy aspirations is generally imputed to the political interference of interest groups, which may undermine the reform efforts through the capture of the regulatory authorities and various forms of anti-competitive behaviour. Yet general causal accounts of the policy cycle of privatisation and liberalisation reforms miss considering how mutual adjustments between different levels of governments affect the implementation of this kind of regulatory reforms.

This study aims to fill this gap on the basis of an explanatory research argument for the trajectory and outcome of the implementation phase of privatisation and liberalisation reforms of infrastructure industries which take place in multi-level governance systems. The episode of the implementation of the water reform in Italy in the period between 1994 and 2006 provides an instance of such type of reforms. The explanatory research argument about the water reform implementation case is developed on the basis of the theoretical approach known as institutional processualism (Barzelay and Gallego, 2006; Barzelay, 2003). Such explanatory research argument includes a particular emphasis on the role played by initial conditions (e.g., public ownership of water firms) and context conditions (e.g., constitutional changes and implementation of EU directives) as causal factors, and on social mechanisms as theoretical reasons for causation claims.

On the basis of the explanatory research argument on the case, this study sheds some light on how mutual adjustment between different levels of government affects resistance against, progression

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towards, and diversion from the implementation of the privatisation and liberalisation reform in a way congruent to policymakers' declared objectives.

3 Decisional rounds and local modes of governance in Italian water management reform Chiara Carrozza University of Turin

ABSTRACT Privatisation, liberalization and regulation reforms involve many specific problems and alternatives solutions: while the classic literature on the public regulation assumes that all the theoretically appropriate policy tools are available to the optimizing choice of the public authorities, the context in which regulation policies take place is, instead, extremely complex and often reduces the number of available options.

The Italian water services reform, started in 1994, has been surrounded by a lively debate on the water management models between the supporters of the public modes of governance and the supporters of the private ones. However, the dynamics of the reform and its local outcomes show a picture that is difficult to describe through this binary perspective and that cannot be understood only considering the formal decisions made by the local public agencies.

The paper - part of the empirical work realized for my doctoral dissertation in the period 2005-2008 - introduces the general picture of the Italian reform, analyzes the decision-making process and presents a map of the local outcomes. Through the analysis of the games between politicians, water utilities and social movements during the reform implementation, and the analysis of the local outcomes, summarized into four groups of cases, we will try to show that the range of solutions is wider - and the boundaries between them more ambiguous - than commonly assumed in the theoretical literature and in the mainstream Italian debate, which appears to overestimate the role of the tools and of the formal instruments, and, vice versa, to underestimate the real and differentiated ability and power of the water sector actors.

4 Regulatory Governance in the water industry: The effects of the financial crisis on the political economy of the water sector in Germany, Italy and Russia Alberto Asquer, Johann Wackerbauer University of Cagliari, Ifo Institute, Munich

ABSTRACT The 2007-2009 financial crisis has led to raise again perennial issues concerning the viability of alternative mechanisms for the economic regulation of network industries. In the water industry, anyway, a lively debate on the merits of privatization and market-based regulatory mechanisms were already underway in the 2000s. Most of water utilities worldwide are owned by the public sector, typically at the municipal level, but in several countries municipally-owned water utilities have been restructured (or are considering restructuring) into various forms of public-private partnerships. Yet the move towards liberalisation and (partial or full) privatisation of municipal water utilities is often controversial. An issue arises, then, regarding whether the current financial crisis has (or is going to have) any effect on the political economy of the water sector, in terms of renegotiation of regulatory design choices and of changes in the forms of involvement of private operators and investors. This paper aims to address this issue by exploring the effects of the current financial crisis on the political economy of the water sector across different countries characterised by municipal ownership of water utilities. In Germany, where municipalities are traditionally involved in the regulation of water utilities through direct ownership of formally privatised

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companies and participation in supervisory bodies, liberalisation and private sector participation in the water industry remains rather half-hearted. In Italy, despite a considerable amount of efforts to introduce various forms of public- private partnerships in the last decade, municipalities still enjoy significant influence of water utilities and further steps towards more substantive privatization of water service provision is uncertain. In Russia, instead, the current financial crisis seems to open up the possibility for larger involvement of private operators and investors and for a reform of the water regulatory system, although it is still to be seen if municipalities will retain control of the water utilities. On the whole, this paper sheds some light on the regulatory governance in the water industry at the time of financial crisis, with particular attention to regulatory regimes largely based on municipal ownership of water utilities.

Panel 8A Case Studies in Banking and Securities Regulation

1 Big banks in small states: organizing financial markets in the global era. A study of regulation, risk‐ rating and monitoring of the crisis in the Baltics. Matilda Dahl Stockholm Centre for Organisational Research

ABSTRACT A remarkable feature of financial markets are their repeated failures, crashes or crisis (Soros, 2008, Kindleberger and Aliber, 2005). At the same time, financial markets are highly regulated and supervised in order not to fail. A financial crisis in it turn is often blamed on regulation and lead to re‐regulation. Discussion on the balance between state‐regulation and self‐regulation on markets is as old as the financial markets themselves. In mainstream studies of finance, the market is treated as an object “sui‐generis” – of a kind of its own. In its organizational approach to financial markets this paper views them as not only populated by many organizations but also as shaped by processes of organizing. One such process of particular interest in this context is the act of monitoring, supervising or auditing. Indeed these various types of scrutiny can be seen as processes that organize financial markets. The paper contributes to develop an organizational approach to the restructuring of financial markets and to the financial crisis. The setting is that of the economic transformation and financial crisis in the Baltic states. The main processes of organizing studied are monitoring and rating undertaken by and directed towards commercial and investment banks. Banks are here viewed as organizations acting on and shaping financial markets in transforming states, they are thus central actors on a changing field of international governance. Concepts borrowed from organization theory, international governance and auditing are used to analyze processes of organizing of the financial markets in the Baltic states. The empirical investigation includes a comparative case study of two Swedish banks in Latvia. Several observations at major regional conferences with a financial or economic focus, as well as topical workshops on the financial crisis from a Swedish and Baltic perspectives have also feeded in to the empirical investigation.

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2 Beyond Legal Origins? A Case Study of Consumer Over-indebtedness Regulation in the UK and France Iain Ramsay University of Kent

ABSTRACT Significant differences exist between France and the UK in the regulation of consumer credit markets. These include interest rate ceilings (which exist in France but not the UK), the role of credit bureaux, controls on entry by suppliers to the credit market, the availability of forms of credit (such as home equity loans) and the regulation of overindebtedness. There is a lower level of consumer debt in France compared to the UK.

This paper is part of a research project exploring why these institutional differences exist, what are their economic and distributional effects and whether they are likely to change. These questions are important because (1) the EU wishes to develop an integrated capital and credit market and combat financial exclusion (2) the UK government has until recently assumed the superiority of the “Anglo- Saxon” model of maximizing access to credit and consumer choice, a position now challenged by the world financial crisis and credit crunch.

Several potential explanations may account for distinct approaches to regulation of consumer credit markets. These include (1) legal origins—which are used to explain different techniques of regulation adopted in common law and French civilian jurisdictions (2) Ideal types of legal systems—with consumerist legal systems (such as the UK and US) emphasizing consumer choice over consumer protection (3) The influence of ideas—in particular neo-liberalism (4) The relative influence of interest groups in the political and regulatory process (5) “Culture”.

In this paper I focus on the response to problems of over-indebtedness where England and France adopted distinct policies and institutional responses to consumer over-indebtedness. I argue that the different positions on these issues are not explained by legal origins or culture but that political interest groups and the influence of ideas may be more fruitful lines of inquiry. This also suggests that barriers to integration in the EU are in this case political rather than cultural.

3 When Life Hands you a Lemon... Shifting Paradigms in Consumer Credit Regulation and the Accelerated Rise of the Principle of Responsible Lending after the Financial Crisis Joseph Spooner Law Reform Commission

ABSTRACT Since the initial opening of global consumer credit markets in the 1960s-80s, the dominant approach to consumer credit regulation in North America and Europe has consisted of “truth in lending” or information disclosure legislation. This Paper examines the neo-classic economic theory on which this regulatory philosophy is based, and discusses how information disclosure seeks to address market failure in accordance with Akerlof’s “Market for Lemons” principles. The theory of “adverse selection” and the conception of the consumer as a rational market actor are shown to lead to a regulatory model under which responsibility for preventing default and over-indebtedness is placed on the consumer borrower. The Paper next identifies the manner in which these theoretical underpinnings and assumptions have been increasingly questioned in recent years. This section presents the findings of behavioural economics that cognitive biases limit significantly the ability of consumers to act in an economically rational manner. It also discusses empirical research illustrating that the reality of consumer

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borrower decision-making does not correspond to the assumptions on which information disclosure legislation is founded. The Paper examines the justifications for the principle of responsible lending as an alternative focus of consumer credit regulation, including the superior ability of lenders to bear and predict risk, and the recognition that certain lending practices may actively fuel over-indebtedness. Early conceptions of responsible lending in EC law and the laws of selected Member States are explored. The Paper next examines the responses of regulators to the financial crisis, and describes how the acceptance of the principle has gathered considerable pace in the EU, UK and Ireland. The Paper concludes by asking whether these responses indicate a shift from neo-classical to behavioural economics as the dominant underpinning of regulatory thinking, and the establishment of responsible lending as a key paradigm of modern consumer credit regulation.

Panel 8C Regulatory Solutions to Privatised State Security

1 The social construction of a multi-level regulation around private security companies : the control of an inherently governmental function without the government ? Cyril Magnon- Pujo Paris 1 Pantheon-Sorbonne

ABSTRACT Recent scandals in the private security industry operating internationally have put in the media spotlight -and at risk- a fast growing sector, resulting from a new deployment of state authority, according to a privatization agenda. Consequently, such events have highlighted the drifts resulting from the unexpected and unprecedented increase in the use of private security companies (especially the mismanagement in the control of what has became a necessary instrument, for states, in its implementation of its supposed monopoly on the legitimate use of force), and reinforced a perception of crisis around this controversial activity. Crisis or “rhetoric of crisis” were then used both as a reason and a pretext for imposing a certain vision of regulation on what was previously considered both as an illegitimate and illegal practice. In accordance with this situation, the innovative regulation, necessarily and currently developed around private security companies, raises nevertheless multiples interrogations that this paper will address. Indeed, dealing with an extra-territorial, public and private issue, the control of such companies involves numerous stakeholders and takes the format of a multi-level regulation, in which states hold a questionable position . Therefore, the possibility of coordinating so many different levels of authority in a same consensual dynamic is questioned as the regulatory governance scheme created is unprecedented. The complex web of socially constructed norms (internal, domestic and international) framing private security companies’ activities extends this thought on the effects and meanings of a multi-level regulation, while the will of controlling such companies goes potentially on a par with the legitimization of a controversial issue. Finally, the

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legitimacy of a partially non-state control of an inherently governmental function is interrogated. Strategically depoliticized, those private regulations and their repeated requests for some state’s involvement indeed recall the structuring importance of the monopoly of State on the legitimate use of force; principle which influences ideas and practices of regulation around the private security industry. Original in its form and in what it achieved to control, this multi-level regulation, whether or not coordinated, thus deserves an attentive analysis as it questions both the possibility of non- state legitimate regulation and the way a regulatory governance scheme emerged.

2 Business or Monopoly: Regulatory Models in the Security Sector Adam White University of Sheffield

ABSTRACT As cash-strapped states struggle to meet the ever-increasing number of security threats in the world today, private security companies (PSCs) are fast-emerging as central players in the domestic security landscape, undertaking a multitude of frontline security functions such as protecting critical infrastructure, policing mega-events and conducting counter-terrorism surveillance. Alongside this ‘pluralisation’ of security provision, there has been a proliferation in state-administered regulatory regimes seeking to ensure that the activities of these PSCs are not compromising long-established notions of the ‘public good’. The aim of this paper is to evaluate the two key models for regulating the industry – the business and monopoly models – by drawing upon the recent experiences of the British case.

In particular, the paper will focus upon the following paradox: while the British state has in recent years employed a light-touch ‘business’ model to regulate PSCs in lines with the ‘Hampton Principles’, many PSCs have been lobbying for a much heavier ‘monopoly’ model which would serve to bring them under closer state control. The paper argues that this is because the security sector is structured by deep-seated social norms which stipulate that the state ought to monopolise security provision. This constrains PSCs whose activities grate against this norm and as a consequence it is in the PSCs’ commercial interests to be subjected to ‘monopoly’ regulation since this communicates to security purchasers that they are not purebred market actors functioning in accordance with the logic of private goods, but rather state-deputised actors operating in line with the public good.

The paper will conclude that there is thus an opportunity for the British state to move towards a ‘monopoly’ model since this will serve to both bring the activities of PSCs further in line with the public good and will accord with the PSCs’ commercial interests. In reaching this conclusion, the paper will also contribute towards the important task of explicating the relationship between the state, market and regulation in the most sovereign political domain: the security sector.

3 Corporate Torture in the ‘War on Terrorism’: Regulating in the ‘Gap’ between Security and Rights Fiona De Londras University College Dublin

ABSTRACT During the ‘War on Terrorism’ there has been a rapid and extreme escalation of the privatisation of state security functions. This has occurred not just in the use of private military companies and security firms and in the responsibilisation of banks, communities and private individuals but also in the privatisation of some functions associated with extraordinary rendition and torture. Torture, although absolutely prohibited by international law and, is and always has been a deeply sovereign exercise; a demonstrative act of assertion or reassertion of state power that takes place in what Paul

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Khan has described as a sovereign space beyond law (Sacred Violence (2009)). In the war on terrorism, extraordinary rendition has been used as means of structuring the imposition of torture on suspected terrorists by the United States and its allies. This process has involved the extensive use of private companies: airlines, charter companies, logistics companies etc resulting in the privatisation or corporatisation of this most sovereign activity. In this paper I suggest that some of the rationales for such corporatisation are minimisation of state liability for torture and concealment of the activity. This corporatisation reveals the challenges posed to the traditional paradigms of international law (state-state; state-international institution) and international human rights law (state-individual; state-group) as, although it may be possible to ‘tie’ the state to the private company in some way (articles of state responsibility, for example) there remains a space of intensely repressive activity but uncertain law. That space might be flooded by law through international legal reform and evolution, but it might also be susceptible to effective rights-based regulation focused on the involved companies. This paper will identify and try to shape that active space and the potential for rights-based transnational private regulatory approaches to usefully operate within it.

Panel 8F Complex Patterns of Interaction: Public and Private Actors in Food Regulation

1 Revising Meta-governance: Comparing the Impact of State Intervention on Network Structures in the Danish and Swedish Organic Food -industry Yonatan Schvartzman University of Aarhus

ABSTRACT Abstract unavailable currently

2 Waiting for the State? The Success and Failure of Traffic Light Food Labelling in Germany and Great Britain Frank Janning University of Hamburg

ABSTRACT The so called traffic light system in food labeling is widely accepted as a comprehensive and rational method in food labeling. In food stores and supermarkets consumers may obtain simple and trustworthy information about food quality and potential health risks of food products via this new approach in food labeling. In Great Britain supermarkets, retailers and large food companies agreed on the traffic light system as a method of self-regulation without any involvement of state regulation. Nevertheless, the British Food Standards Agency (FSA) took an active role in coordinating and monitoring the industry self-regulation; the FSA also helped in developing the new labeling approach. In Germany self-regulation failed, and the new conservative-liberal government (the new CDU-FDP-coalition) took a stand against a comprehensive food labeling system. The department of consumer protection (BMELV) opposed all efforts by consumer groups to introduce new food labels. As the state agency for consumer protection and food safety (Bundesamt für Verbraucherschutz und

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Lebensmittelsicherheit/BVL) has no competence to act as an autonomous regulatory agency no neutral actor were able to support and monitor mechanisms for self-regulation. Thus, the debate on new approaches for food labeling was much more politicized, and consumer interests were played down. In my paper I want to discuss the debate on food labeling in both countries to compare the different state traditions and emerging policy regimes in food regulation. In Germany the sector of food regulation is characterized by state intervention and strict law enforcement, but because of special interests of the Bundesländer and only weakly institutionalized coordination devices (e.g. BVL), the emerging policy regime is more and more politicized. In Great Britain the sector of food regulation is organized according to liberal market principles relying more and more on self- regulation. Yet, as the FSA can take an active role in supporting consumer interests in self-regulation the policy regime succeeds in maintaining consumer interests without further politicization.

3 Differential Empowerment for Regulatory Change – How transnational forces shape private and public forms of food safety regulation in Eastern Europe Laszlo Bruszt, Julia Langbein European University Institute

ABSTRACT This paper compares how the EU and other transnational actors employ mechanisms of transnationalization in order to empower firms, associations, and states to bring about regulatory change in EU candidate and non-candidate countries. Empirically, we compare change in food safety regulations in the Czech Republic and Ukraine with a special emphasis on the relationship between private and public modes of regulation. While the Czech Republic has fully adopted EU food standards and witnessed an increase in private forms of regulation through integrated food supply chains of retailers, wholesalers and producers, Ukraine has only adopted EU grain standards and regulates food safety and quality predominantly through forms of public intervention. Scholars of Europeanization will not hesitate to explain the divergent outcomes with reference to EU conditionality. In contrast, students of development will refer to opportunities for market access and the penetration of domestic supply chains by multinational investors. The paper shows that these are necessary factors to explain regulatory change in the Czech and Ukrainian food sectors. Yet empirical evidence also reveals that the EU and other transnational actors provide differential forms of assistance. In the Czech Republic, assistance was targeted at public and private actors who then legitimized and stabilized change in the local institutions of food safety. Hence, the capacity of Czech state actors to supply new institutions increased and the Czech agri-food associations were empowered to shape policy-making and channel financial and technical support to firms. Finally, multinational retailers provided farmers and processing firms with credits for the upgrading of production processes in order to ensure large and consistent deliveries. In contrast, transnational actors targeted assistance mostly at Ukrainian public actors and ignored private actors. Consequently, Ukraine’s food sector is characterized by shallow patterns of transnationalization, leading to slower and less encompassing regulatory change.

4 Meta-governance of quality systems. A case study on safeguarding the quality of Dutch eggs Haiko van der Voort TU Delft

ABSTRACT In times of budget cuts and ‘regulatory governance’- philosophies public regulators have a keen eye on private systems that are aimed at safeguarding the quality and safety of products. Relying on those systems would probably save valuable inspection capacity and keep quality and safety on an acceptable level. These systems could be framed as ‘governance- systems’, albeit on a micro-level, in

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which multiple public inspections, private certification bodies, audit committees and different industries interact to meet both individual and common ends. This framing provides an excellent opportunity to make the concept of meta-governance more tangible than in the current literature. Meta-governance, then, deals with the governance of these governance-systems. This paper offers a typology of theoretical meta-governance approaches that can be found in the current governance- literature. In this literature there is debate on, for instance, the question whether meta-governance is a state-activity or whether meta-governance is a deliberate activity by a single actor at all. After drawing relevant theoretical dimensions of meta-governance, the paper reports a study on the meta-governance of a Dutch quality system of eggs. Following a decision of the Dutch Ministry of Agriculture to rely some more on the quality system of the egg chain, a series of adjustments to both this quality system and the coordination of public inspections is emerging. An analysis of these adjustments provides a reflection on the found dimensions in meta-governance literature.

Panel 8H Reconciling State Activity and Competitive Markets

1 State Aid as a response to Crisis Adithya Vidyasagar Gujarat National Law University

ABSTRACT The goal of this paper is to analyze the interplay between the EU Fiscal State Aid and the Tax Policy of the EU Member States. During a period of crisis as now, one of the tools used by the States to decrease the effects of the crisis and permit at the same time to boost the domestic economy is by the use of State Aid and in particular fiscal state aid. Nonetheless, it is not so easy for the Member States, because in practice they do not have a big margin. Indeed, the problem of the fiscal state aid for the EU Member States is that these aids have to comply with the rules of the EU State Aid. From this moment, the problematic is to know, if the EU Member States can have a relevant Tax policy to reply to this crisis and at the same time comply with the requirement of the EU fiscal state aids. This paper will deal with as well indirectly of the question of the reality of the European Tax Policy.

3 When Regulation Helps but it does not Cure: The role of Social Policy on Broadband Performance Jose Maria Castellano Universitat Pompeu Fabra

ABSTRACT When studying the relation between competition, investment and innovation, economic models take into account the demand as fixed and uniform. Following these assumptions the literature has suggested that medium market entry regulation is the best option to encourage investment and innovation. However, the empirical evidence shows that medium market entry regulation does not lead all the countries to similar results in terms of broadband performance. Then, under what conditions medium entry regulation lead countries to a higher broadband performance? On the one

Page | 138 hand, these differences can be explained due to time differences in regulation and adoption but also by internal factors. These internal factors would be demand factors. In particular, this paper examines the secondary education achievement and young population proportion effects on regional broadband performance under the same type of market entry regulation. The different allocation of secondary education and young population resources across countries and within countries could be explained by different social policy models. The main hypothesis suggests that entry regulation would be less important for broadband performance as we thought. Also, medium entry regulation could lead to a high broadband performance under high secondary education and young population proportions. This analysis uses multivariable methods and analyzes EU regions from 2007 to 2009.

Panel 8I Regulating Energy

1 The Role of Private Governance in the Internal Energy Market Burkard Eberlein, Sandra Eckert University Osnabrück

ABSTRACT The role of private actors in the process of creating an Internal Energy Market (IEM) in the European Union is crucial. In particular transmission system operators (TSOs) dispose of key technical and operational capacity which is vital for the realisation of the IEM project. The suggested paper theorises and empirically investigates the effectiveness of private governance in producing a common good. More specifically, we seek to explore the extent to which TSOs have contributed to resolve cross-border issues posed by market integration in the electricity sector. In which ways have private actors coordinated their action and how effective was their cooperation in practice? Expectations will be formulated based on new institutional economics and transaction cost theory. These will be exposed to empirical scrutiny studying the emergence, execution and evolution of private governance in the area of cross-border trade of electricity and congestion management. We find that cooperation among European TSOs emerges as a response to a purely technical need for coordination, but that with the advent of the IEM European regulation increasingly sheds a shadow of hierarchy. Over time voluntary mechanisms become subject to public monitoring, whilst the role of TSOs within the IEM’s institutional architecture is being formalised. Yet despite increased political oversight TSOs continue to enjoy a considerable amount of discretion due to structural information asymmetries.

2 The Legal, the Physical, and the Mathematical Capacity of a Gas Pipeline Network Martin Grötschel, Thorsten Koch, Klaus Zuse Institute Berlin, E.ON Gas Transport GmbH, Spreckelsen, Peter Stratmann Bundesnetzagentur

ABSTRACT In 2005 the rules for gas transportation have been substantially changed in Germany due to new legislation. The “Bundesnetzagentur” now acts as regulation authority, monitoring the behavior of the market participants, asserting compliance to the rules, and resolving disputes. In response to the

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legislation, the energy companies were forced to split off independent companies which now own, maintain and operate the gas pipeline networks and act as gas transport providers. The new legislation led to a complete new paradigm on how to define the capacity of a gas transportation network. Until 2005, companies would build pipelines to transport gas according to specific long term delivery contracts. The new law now requires the gas transportation companies to offer gas buyers and sellers the right to charge and to discharge gas into the network on a short term basis. Neither a buyer nor a seller is forced to specify from where the gas comes or to which locations it will be delivered. Still, the gas transportation companies have to guarantee the delivery of the gas. In order to satisfy this legal requirement, the transportation companies have to publicly announce their “free” capacities. But what is this free capacity? Computing the capacity of a gas network is a nontrivial matter. The law introduces the definition of a “technical” capacity. We will explain the intended meaning and the possibilities for interpretation and we will compare this “legal capacity”, with a concept of physical capacity, and the capacity one can offer from a mathematical point of view. We will try to explain some of the effects the legislation had so far, what was intended, and what likely will happen once the ramifications are better understood.

3 A Systemic Approach to Establishing Regulatory Oversight Anshuman Saxena, Alain Wegmann Ecole Polytechnique de Lausanne

ABSTRACT In the most general sense, regulation is the act of controlling the interactions between the actors of a system. Nevertheless, in the absence of any standardized framework or methodology, regulatory interventions are often based on a superficial understanding of the system. The aim of this paper is to demonstrate the suitability of Systems Inquiry approach in establishing regulatory oversight. Such an inquiry takes a holistic view of the system, identifying the different stakeholders and the relationships between them. Understanding these relationships unearths the underlying value exchange thereby enabling a more informed regulatory scrutiny. As a concrete example, we use SEAM, a set of systemic methods developed at the LAMS laboratory in EPFL, and apply it to the study of quality of electricity supply in rural India. SEAM represents the perceived reality as a hierarchy of systems. Each system can be analyzed as a whole – showing its externally visible characteristics, or as a composite – highlighting the properties of the interrelated parts. For example, when applied to the electricity supply system, as a whole this system can be modeled to have the objective of meeting the energy needs of a certain set of consumers, but when modeled as a composite it exposes the objectives of individual stakeholders, namely: the economic interests of the supply companies, the institutional concerns of the government, and the social aspirations of the consumers. Further, in SEAM, stakeholders who cooperate together to achieve some common objective are grouped as Value Networks (VN). The two prominent value network types being: the Supplier Value Network and the Adopter Value Network. The ability of SEAM to model the relationship between the Supplier and Adopter Value Networks as a feature-value mapping, coupled with its whole-composite visualization of the target system allows SEAM to identify not just the properties of the different parts of a system but also the emergent properties of the system that result from the interactions between these parts. As an outcome, we demonstrate how SEAM helps identify the limitations of currently used indices for quality of electricity supply measurements and argue the need to include spatial, temporal and other user specific sensitivities for more realistic electricity supply qualityassessments.

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