ABSTRACT

Analyses of regulatory systems tend to follow two main approaches. The first is dominated by economists and seeks to build models of the economic impact of varying forms of regulatory intervention: we term this the cost-benefit approach to regulation. The second approach tends to be the preserve of political scientists examining the degree to which regulatory systems are ‘captured’ by those whom they are supposed to be regulating – this can be termed the regulatory-capture approach. In this chapter, we suggest that a third approach is necessary which takes seriously the complexities of the internal organizational features of both the regulators and the regulated companies – we term this the organizational approach to regulation. The organizational approach emphasizes that both the regulatory bodies and the regulated companies are complex social spaces within which actors construct meanings that make sense of their roles and activities in changing contexts. At a simple level, this notion emphasizes the need to consider the range of perspectives on and interests in regulation based on the structural position of actors within organizations. Certain actors are more powerful than others in articulating a set of values and practices for the organization as a whole; this is revealed in conflicts and arguments within organizations over the nature of regulation. Similarly, certain organizations play a more influential role than others in constructing the system of regulation. Hancher and Moran (1989) use the idea of the ‘regulatory space’ to describe the complex field of actors and interests that participate in the construction of a regulatory system; our argument is that this concept needs to be extended to emphasize the internal dynamics of the organizations within the ‘regulatory space’.