Understanding Regulation: Theory, Strategy, and Practice
Abstract
The way in which regulation works is a key concern of industries, consumers, citizens, and governments alike. Understanding Regulation takes the reader through the central issues of regulation and discusses these from a number of disciplinary perspectives. This book is written by a lawyer and an economist, but looks also towards business, political science, sociology, social administration, anthropology, and other disciplines. The fundamental strategies, institutions, and explanations of regulation are reviewed and the means of identifying 'good' regulation are outlined. Individual chapters look at such topics as self-regulation, the regulation of risks, the cost-benefit testing of regulation, the importance of enforcement, and the challenge of regulating within Europe. The book's second part considers a series of issues of particular concern in modern utilities regulation, including the use of RPI-X price caps, the control of service quality, franchising techniques and ways of measuring regulatory performance. Questions of accountability and procedure are then examined and recent public debates on regulatory reform are reviewed. A central argument of Understanding Regulation is that regulation inevitably gives rise to political contention but that persons of different political persuasion can nevertheless converse sensibly on the search for better regulation.
... Definitions of healthcare quality The US government Centers for Medicare and Medicaid Services adopts and applies the definition of quality as defined by the National Academy of Medicine: "the degree to which health Araujo et al., 2020;Baldwin and Cave, 1999). In that perspective, quality consists of six dimensions: clinical effectiveness, patient safety, patient centeredness, care coordination, efficiency, timeliness and equity (Institute of Medicine, 2000). ...
... (1) External inspection is a regulatory approach to which external inspectors assess the performance of a healthcare organization, or delegate parts of the assessment to the organization, by either planned, system audits of performance initiated by the inspectorate body or individual cases of adverse events-related external inspection reported to the inspectorate body (Baldwin and Cave, 1999;Hopkins and Hale, 2002;Walshe, 2003). ...
Purpose
The authors compare perspectives on external evaluation of health service provision between Norway and the USA. External inspection and accreditation are examples of internationally wide-spread external evaluation methods used to assess the quality of care given to patients. Different countries have different national policy strategies and arrangements set up to do these evaluations. Although there is growing attention to the impact and effects on quality and safety from external evaluation, there is still a gap in knowledge to how structures and processes influence these outcomes. Accordingly, the purpose of this article is to describe the structures and processes in external evaluation designed to promote quality improvement in Norway and the USA with attention to comparison of enablers and barriers in external evaluation systems.
Design/methodology/approach
Data collection consisted of documentary evidence retrieved from governmental policies, and reviews of the Joint Commission (the US), international guidelines, recommendations and reports from the International Society for Quality in Health Care, and the World Health Organization, and policies and regulations related to Norwegian governmental bodies such as the Ministry of Health and Care Services, the Norwegian Directorate of Health, and the Norwegian Board of Health Supervision . Data were analyzed inspired by a deductive, direct content analytical framework.
Findings
The authors found that both accreditation and inspection are strategies put in place to ensure that healthcare providers have adequate quality systems as well as contributing to the wider risk and safety enhancing management and implementation processes in the organizations subjected to evaluation. The US and the Norwegian external regulatory landscapes are complex and include several policymaking and governing institutions. The Norwegian regulatory framework for inspection has replaced an individual blame logic with a model which “blames” the system for inadequate quality and patient harm. This contrasts with the US accreditation system, which focuses on accreditation visits. Although findings indicate an ongoing turning point in accreditation, findings also demonstrate that involving patients and next of kin directly in adverse event inspections is a bigger part of a change in external inspection culture and methods than in processes of accreditation.
Research limitations/implications
The message of this paper is important for policymakers, and bodies of inspection and accreditation because knowledge retrieved from the comparative document study may contribute to better understanding of the implications from the different system designs and in turn contribute to improving external evaluations.
Originality/value
Although there is a growing attention to the impact and effects on quality and safety from external evaluation, the implications of different regulatory strategies and arrangements for evaluation on quality and safety remain unclear.
... First, legal studies often distinguish between compliance instruments, aiming at convincing people to behave desirably through training, information, or raising awareness on the one hand and deterrence instruments, applying a repressive approach through enforcement or punishment on the other (Baldwin & Cave 1999). Hence, compliance instruments can be seen as soft actions, including campaigns, information brochures, and academic or sensibilizing discrimination tests (Verstraete et al. 2017). ...
Discrimination is widely studied, with extensive research measuring discrimination on the housing and labor markets. This study examines how local governments address this well-documented issue, by conducting content analysis on 45 policy documents and by performing semi-structured in-depth interviews with 24 alder(wo)men and diversity officers across nine Belgian cities. We introduce a temporal framework combining why, what, how, and when local anti-discrimination policy and actions are established. Such a framework is useful, as we do not approach policy as fixed, but pay attention to how actions evolve over time, even within one so-called anti-discrimination policy.This enables scholars and policymakers to identify decision-making patterns, predict changes over time, and understand contextual influences. Besides, unlike existing models rooted in integration or diversity policy, our framework captures the unique aspects of anti-discrimination policy, enabling a thorough understanding of the (non-)adoption of concrete anti-discrimination actions.
... Given the complexity of the BNPL ecosystem, where governments, fintech firms, and consumers intersect regulations must strike a balance between protecting consumers, fostering competition, and ensuring financial stability. Baldwin and Cave's (1999) focus on transparency, accountability, and cooperation is equally relevant, as effective BNPL regulation requires accurate information sharing and policies that can adapt to rapid technological changes. Combining command-and-control, market-based, and self-regulation approaches can help mitigate risks such as consumer debt accumulation while encouraging innovation in the BNPL space. ...
This study provides a comparative analysis of the regulatory frameworks governing Buy Now Pay Later (BNPL) services across ten ASEAN countries: Indonesia, Malaysia, Singapore, Thailand, the Philippines, Laos, Brunei Darussalam, Vietnam, Myanmar, and Cambodia. As BNPL services rapidly expand throughout the region, understanding the diverse regulatory landscapes and their implications becomes increasingly critical for fostering financial stability, consumer protection, and innovation in the digital financial ecosystem. Utilizing a literature review methodology, the research examines existing regulations, legal frameworks, and market trends, assessing their impact on financial stability, consumer protection, and fintech innovation. Singapore is identified as the leader in regulatory practices, effectively balancing fintech innovation with stringent consumer protection. Indonesia and Malaysia emphasize financial inclusion and systemic risk management, with Indonesia's framework focusing on transparency and financial literacy. Thailand and the Philippines are refining their frameworks, while Myanmar, Laos, Brunei, Vietnam and Cambodia are still developing their regulatory approaches. BNPL services, driven by growing e-commerce and fintech ecosystems, offer significant opportunities for financial inclusion but also pose challenges related to over-indebtedness, credit risk, and data protection. The analysis emphasizes that while BNPL presents significant opportunities for financial inclusion and fintech innovation, effective regulation is critical to ensuring sustainable growth and protecting consumers from debt traps and financial instability.
... Within common law countries, such as Australia, 'law' is generally assumed to refer to both judge-made law and legislation (Creyke et al. 2021), whereas 'regulation' usually refers to legislation, delegated legislation, and sometimes government policy by extension. However, scholars have sought to broaden the definition of regulation by recognizing that it occupies a space in which multiple actors are engaged in regulating each other-a space which enacts and exhibits power relations (Parker and Haines 2018; see also Baldwin et al. 2011;Levi-Faur 2011). It is this approach that has informed the regulatory analysis of the case studies below with consideration given to regulatory instruments, institutions, and drivers of regulatory reform. ...
... Brussel: Vakgroep Sociologie -Vrije Universiteit Brussel. 7 Baldwin, R., Cave, M. (1999). Understanding regulation. ...
... Poor customer service, service interruptions, and erroneous bills given to consumers are the most important issues, while public demonstrations against privatization are the ones that happen the most frequently, according to Tariq [8]. Due to the existence of these factors, the operation of the project requires scientific management and explicit regulation [9]. The risk of market failures can be decreased and the interests of all parties concerned can be safeguarded by reasonable regulation [10]. ...
Although PPP(Public-private partnership) mode has been applied for a long time in infrastructural project, the success rate is not very high. The sustainability of PPP projects is still influenced by many factors. In order to examine the evolutionary stable strategies (ESSs) of social capital, government, and paying consumers, a tripartite evolutionary game model is established in this work. In order to further promote consumer participation, it is necessary to make the assumption that customer oversight and review can have an impact on service prices. The results show: i)The strategy choice of consumer depends on the comparison between supervision cost of consumer and price coefficient for consumer to social capital. ii)Consumer supervision can promote the provision of high-quality services by social capital. iii)The difference between high-quality cost and low-quality cost, subsidy coefficient, price coefficient and supervision cost of consumer are critical factors influencing both evolutionary results and trajectories. This paper also puts forward policy implications for the three stakeholders to promote social capital’s high-quality strategy so as to maintain the sustainability of PPP projects.
... Hence, the state as a legislator primarily has a role of defining procedural norms rather than normative ones. The mere part of Swedish labour law is also semi-autonomous and is an expression for the synthesis legally conditioned self regulation (Baldwin & Cave 1999p.41, Witteveen 2005. ...
Thirteen legal and economic scholars, lawyers and an MD have participated
in the creation of this anthology regarding Scandinavian women’s law in the
21st century. The aim of the book is to set the stage of women’s law today
(2011) and take a look into the future of women’s law.
... 3. Una forma de influencia social o económica: la regulación se refiere a todos los mecanismos que inciden en la conducta de los individuos (Baldwin, 2012). ...
La presente investigación consiste en un análisis vinculado a la calidad de la ley y de la herramienta denominada análisis de impacto regulatorio, la cual es implementada ordinariamente en México a la regulación que emite el Poder Ejecutivo, se expone la relevancia y conveniencia de su incorporación al proceso legislativo con la pretensión de incidir en su calidad, al evaluar y proyectar principalmente los costos y beneficios que podrían impactar en los particulares al momento de la consecución de sus objetivos, incorporando con ello una mayor dosis de ciencia y racionalidad a la toma de decisiones legislativas.
... Lo anterior pone en evidencia la insuficiencia, no solo de los medios materiales, sino de los medios jurídicos de este nuevo estado regulador y vigilante (Rastrollo, 2019). A esto se suman problemáticas como la captura del regulador, falta de integridad en el servicio público, deficiencias y falta de celeridad en los procedimientos administrativos, entre otros (Baldwin y Cave, 1999;Rivero, 2005), los cuales ponen en dificultad la eficacia de la gestión del riesgo bajo este enfoque. ...
El desarrollo de las instituciones para enfrentar los desastres está marcado por el acaecimiento previo de algún tipo de desastre de gran magnitud, que pone de presente su insuficiencia. La forma en que el Estado actúa frente a los desastres se ha transformado desde la simple atención de emergencias a través del despliegue de poderes extraordinarios, hasta la gestión integral del riesgo en aplicación de los principios de precaución y de eficacia. Este texto busca entender, desde el derecho administrativo, los factores que han motivado este cambio en la relación del Estado con los desastres, comprendiendo así la evolución, la actualidad y los desafíos de la función administrativa de gestión del riesgo de desastres en Colombia.
... However, neither legal nor economic literature provides a clear meaning of the word "regulatory." Some academics analyze numerous meanings and compare them in an effort to categorize the phrase so that it may be further analyzed (Baldwin & Cave, 1999;Morgan & Yeung, 2007;Ogus, 2004). Others nearly totally avoid defining regulation in detail (Joskow & Noll, 1981;Spulber, 1989;Train, 1997). ...
The financial sector is the epicenter of productive activity of an economy as it performs the vital role of financial intermediation, provider of payment services and the arbiter of monetary policy communication and implementation. Therefore, the objective of the study is to examine the effect of CBN as a regulatory institution on national economic development in Nigeria. The study used ex-post facto research design and the study covered a period of ten years (2011 – 2020). The study employed ordinary least square (OLS) method of estimation to establish the importance of the independent variables on the dependent’s variables. The findings revealed that Monetary policy Rate (MPR) has insignificant positive (202.2958/0.2296 ˃ 0.05) effect on the National Economic Development in Nigeria; Credit to Private Sector (CPS) has insignificant negative (-208.6998/0.1319 ˃ 0.05) effect on the National Economic Development in Nigeria; Liquidity Ratio (LQR) has significant negative (-57.09290/0.0503 = 0.05) effect liquidity ratio on the National Economic Development in Nigeria; and Interest rate (INT) has insignificant negative (-274.8069/0.1717 ˃ 0.05) effect liquidity ratio on the National Economic Development in Nigeria. The study concluded that the CBN current policies has been anti-people and over the years not having significant effect on economic development in Nigeria. The study recommended among other things that CBN should critically re-examines its regulatory policies to focus more on visionary policies that would cause the financial deepening indicators, monetary policy rate and exchange rate to positively and significantly engender development of the financial system. Central Bank of Nigeria should check mate their policy rates to ensure the prevention of inflation in the economy.
... It can be understood as a regulatory 18 Austin (1832). 19 Ayres and Braithwaite (1992); Baldwin and Cave (1999); Black (2005); Braithwaite (2002); Sheehy and Feaver (2015). 20 Sheehy (2015). ...
A policy shift from soft law to hard law rests on assumptions about motivating compliance. The basic idea is that people comply with soft law for personal, moral reasons but are motivated to comply with hard law by self-interested fear. While logically, this is obvious, there is also support for the view that self-determination, organisational justice and social influence are better at motivating compliance in certain contexts. Currently, there is a global policy shift moving Corporate Social Responsibility (CSR) from a voluntary, organisation-based initiative to a practice mandated by law. This shift provides an opportunity to investigate the phenomenon of motivation in law. The current study investigates how the shift to mandatory CSR impacts motivation. Based on an analysis of the programs of 12 firms, in Indonesia we find that CSR hard law appears to motivate CSR without displacing voluntary moral initiatives.
... Por ser assunto controverso diversos autores discutem as questões que envolvem a regulação contábil (Baldwin & Cave, 1999;Barton & Waymire, 2004;Becker, 1983;Daud & Zulhuda, 2020;Friedrich, 2019;Posner, 2013;Stigler, 1971). Além das controvérsias apresentadas na literatura ainda não terem sido superadas, ao mesmo tempo, novos desafios surgem ao ambiente de regulação, como a utilização das mídias sociais para divulgação de informações contábeis. ...
O estudo busca analisar o ambiente regulatório contábil e a dinâmica envolvendo a divulgação de informações financeiras nas plataformas digitais. Assim, o objetivo é discutir teoricamente o ambiente regulatório contábil e o desafio das mídias sociais. Como método de pesquisa, adotou-se uma revisão de produções teóricas, nacionais e internacionais, desenvolvidas ao longo do tempo, realizada com apoio da base de dados Scopus. Em especial, são feitas reflexões relacionadas às teorias do interesse público, da regulação econômica e dos grupos de interesse econômico. São discutidas questões envolvendo a divulgação de informações contábeis em mídias sociais (MS) e seus desafios aos reguladores. Constatou-se que a regulação contábil é assunto de ampla discussão; atualmente são debatidas questões como o excesso de normas e regras, a necessidade da regulação ser capaz de incorporar os avanços que surgem na teoria da contabilidade e o desafio de regular ambientes interativos e dinâmicos, como as MS. É relevante que os envolvidos com o mercado acionário compreendam os elementos que envolvem o ambiente regulatório contábil e analisem seus efeitos no funcionamento do mercado e que reguladores promovam ações mais assertivas na determinação de padrões e na regulação das MS. O estudo contribui com o avanço do assunto, evidenciando pontos mais sensíveis, como a busca por uma regulação mais independente dos interesses de grupos específicos e a discussão a respeito dos desafios, ao regulador, advindos das mudanças tecnológicas que impactam o modo de vida da sociedade.
... What constitutes a good classification of AI systems? Drawing on best practices from the legal tradition (Baldwin & Cave, 1999) and attempts to create working definitions within the philosophy of science (Carnap, 1950), we argue that good classifications should be: ...
Organisations that design and deploy artificial intelligence (AI) systems increasingly commit themselves to high-level, ethical principles. However, there still exists a gap between principles and practices in AI ethics. One major obstacle organisations face when attempting to operationalise AI Ethics is the lack of a well-defined material scope. Put differently, the question to which systems and processes AI ethics principles ought to apply remains unanswered. Of course, there exists no universally accepted definition of AI, and different systems pose different ethical challenges. Nevertheless, pragmatic problem-solving demands that things should be sorted so that their grouping will promote successful actions for some specific end. In this article, we review and compare previous attempts to classify AI systems for the purpose of implementing AI governance in practice. We find that attempts to classify AI systems proposed in previous literature use one of three mental models: the Switch, i.e., a binary approach according to which systems either are or are not considered AI systems depending on their characteristics; the Ladder, i.e., a risk-based approach that classifies systems according to the ethical risks they pose; and the Matrix, i.e., a multi-dimensional classification of systems that take various aspects into account, such as context, input data, and decision-model. Each of these models for classifying AI systems comes with its own set of strengths and weaknesses. By conceptualising different ways of classifying AI systems into simple mental models, we hope to provide organisations that design, deploy, or regulate AI systems with the vocabulary needed to demarcate the material scope of their AI governance frameworks.
... Admittedly, change management is no easy task and the implementation of AI governance is no exemption: Humans have limited attention spans, and employees are frequently bombarded with information about different governance initiatives (Baldwin and Cave, 1999). That said, our first-hand experiences suggest that much can be done to facilitate a successful implementation of AI governance. ...
While the use of artificial intelligence (AI) systems promises to bring significant economic and social benefits, it is also coupled with ethical, legal, and technical challenges. Business leaders thus face the question of how to best reap the benefits of automation whilst managing the associated risks. As a first step, many companies have committed themselves to various sets of ethics principles aimed at guiding the design and use of AI systems. So far so good. But how can well-intentioned ethical principles be translated into effective practice? And what challenges await companies that attempt to operationalize AI governance? In this article, we address these questions by drawing on our first-hand experience of shaping and driving the roll-out of AI governance within AstraZeneca, a biopharmaceutical company. The examples we discuss highlight challenges that any organization attempting to operationalize AI governance will have to face. These include questions concerning how to define the material scope of AI governance, how to harmonize standards across decentralized organizations, and how to measure the impact of specific AI governance initiatives. By showcasing how AstraZeneca managed these operational questions, we hope to provide project managers, CIOs, AI practitioners, and data privacy officers responsible for designing and implementing AI governance frameworks within other organizations with generalizable best practices. In essence, companies seeking to operationalize AI governance are encouraged to build on existing policies and governance structures, use pragmatic and action-oriented terminology, focus on risk management in development and procurement, and empower employees through continuous education and change management.
... These characteristics determine the presence of regulatory authorities responsible for establishing the electricity firms' competition conditions, profit level, and service quality (Polemis and Tselekounis, 2021). Consequently, the sector's business activity is shaped by regulatory requirements to a larger degree than in other sectors (Baldwin et al., 2012). ...
The energy transition is characterized by decarbonization, decentralization, and digitalization trends in the electricity sector, increasing the demand for novel technologies and innovation. Nevertheless, there are still challenges in the electricity sector to provide proper innovation incentives, often attributed to the slow technological dynamics of the sector and its regulated nature. As a response to insufficient levels of innovation, numerous European countries introduced innovation-stimuli regulations in the electricity sector during the second half of the 2000s. To evaluate the impact of these regulations on innovation, we employed a difference-in-differences (DiD) model on a panel data set with 21 European countries covering the period from 1991 to 2016, using patents as a dependent variable. In addition to the canonical DiD, we performed group-specific treatment effects to estimate the difference among the “early adopters” and “late adopters” countries of innovation-stimuli regulation. We find that the introduction of innovation-stimuli regulation has positively impacted patenting activities in the electricity sector, especially among the “early adopters”. These results suggest that innovation-stimuli regulation can be an important regulatory tool to foster further innovation that is required to complete the energy transition.
... Indeed, it has been argued that an important criterion of effectiveness in any regulatory regime is its legitimacy, in the sense that it is 'worthy of public support' (Baldwin & Cave, 1999) in (McDonald & Marshall, 2010). ...
Este caso para ensino discute o regulamento windfall tax sob a perspectiva da Teoria da Regulação. O dilema do caso envolve as polêmicas inerentes à promulgação do regulamento 2022/1854 do Conselho da União Europeia (CUE, 2022), adotado inicialmente por Portugal para as empresas do setor energético. Especificamente, o caso trata da perspectiva de empresários e investidores, afetados pelo regulamento, que buscam fazer lobbying no intuito de defenderem seus interesses junto ao bloco da União Europeia. O caso para ensino possibilita aos estudantes de graduação e pós-graduação em Ciências Contábeis, Administração, Economia, Relações Internacionais e Direito discutirem as várias vertentes da Teoria da Regulação como, por exemplo: interesse público, grupos de interesse e captura. Além disso, proporciona aos estudantes a possibilidade de discussão dos aspectos contraditórios envolvendo o conceito de lobbying.
Risk governance integrates science, social rights, and democratic principles to address risks and uncertainties. It encompasses risk assessment, management, and communication, emphasizing empiricism, public participation, and diverse knowledge systems. Political, cultural, and societal factors shape risk perceptions, requiring multi-actor, polycentric processes. Discursive practices adapt governance to socio-political contexts, particularly in the Global South, where risks are linked to uneven development. Effective risk governance balances scientific rationality with social consensus, fostering inclusive, sustainable approaches to managing technological, environmental, and societal risks. Risk governance transcends instrumental rationality, evolving through economic and social contexts. It is a flexible, multi-stakeholder framework integrating public and private actors, civil society, and non-state entities. Rooted in neoliberal governance and emphasizing shared values, it addresses uncertainties by balancing public perception and institutional action. As a counterbalance to state power, civil society enriches governance through democratic engagement and advocacy. Practical risk governance adapts to complexity, integrating diverse perspectives to ensure resilience, accountability, and inclusivity in managing risks and uncertainties. Risk governance aligns with welfare policies in the global south, emphasizing democratic justice to counter socio-economic exclusions and foster resilience. Risk governance integrates risk assessment, management, and communication within adaptive frameworks addressing systemic risks and uncertainties. Combining institutional theory and polycentric approaches, adaptive governance emphasizes stakeholder participation, social capital, and dynamic responsiveness to disaster and climate challenges. It redefines governance by aligning environmental, economic, and political systems to evolving vulnerabilities and risks.
Artificial intelligence (AI) is transforming the regulatory compliance landscape in the financial technology (fintech) sector. This paper explores the implications of AI on compliance practices, examining its effects on operational efficiencies, cost management, and risk mitigation. Through qualitative and quantitative analysis, the study highlights the challenges and opportunities AI presents for fintech firms striving to meet regulatory demands in a rapidly evolving environment.
Artificial intelligence (AI) is transforming the regulatory compliance landscape in the financial technology (fintech) sector. This paper explores the implications of AI on compliance practices, examining its effects on operational efficiencies, cost management, and risk mitigation. Through qualitative and quantitative analysis, the study highlights the challenges and opportunities AI presents for fintech firms striving to meet regulatory demands in a rapidly evolving environment.
Dalam buku ini, kita akan mengkaji berbagai konsep, teori, dan praktik kewirausahaan. Tujuan utama dari buku ini adalah untuk membekali pembaca dengan pengetahuan dan keterampilan yang diperlukan untuk menjadi wirausahawan yang sukses. Melalui minat dan keinginan yang kuat, diharapkan pembaca dapat mengembangkan jiwa kewirausahaan dan berkontribusi dalam dunia usaha secara kreatif dan inovatif.
The distribution of drugs, especially over-the-counter drugs and restricted over-the-counter drugs, currently seems not to be properly controlled as there is a discrepancy between regulations and techniques in monitoring the distribution of them on non-pharmaceutical facilities. In response to this, the Government made changes by issuing Law Number 17 of 2023 about Health replacing Law Number 36 of 2009. This research aims to confirm that with the publication of Law Number 17 of 2023 about Health, there are regulations that explicitly regulate the procedures for implementing pharmaceutical practice. The results of this research show that although it is not perfect, the government has fulfilled its obligation to protect the public in terms of drug distribution.
In the swirling conversations about regulation and compliance, a fundamental aspect is often neglected: the fact that regulatory compliance is inherently a social process. Regulation requires individuals (and their organisations) to alter their behaviour and subject themselves to some sort of review or monitoring of that behaviour. Further, actions and involvement with one another are required by individuals on the front-lines of regulation, the regulators, and the regulatees, and not just the individuals at the highest levels of governments and organisations. This chapter will review how regulatory compliance is fundamentally a social process that is engaged in by key—but often overlooked—front-line actors, describe these interactions, and detail the implications for regulatory governance moving forward.
Regulatory systems can include a variety of third-party intermediaries, performing a variety of roles, with variable capacities, motivations, strategic position, and authority. Third parties may be deliberately ‘enrolled’ in the regulatory system, or they may be ‘enrolled’ de facto, due to the business model/activities/markets of the regulated firms. Such third parties can be a benefit to the regulator, expanding its capacity. But as well as introducing unintended consequences, they can also introduce key dependencies, with associated risks to which the regulator needs to be alert, and which it needs to mitigate where possible through a range of formal and informal strategies.
This study delves into the formulation of accounting theory and the various methodological approaches used in this endeavor. It explores the significance of accounting theory in the context of financial reporting, decision-making, and the development of accounting standards. The development of accounting theory from a methodological perspective is a difficult and pervasive subject that affects how financial statements are prepared and presented. The research methodology employed in this study includes a comprehensive literature review, content analysis, and empirical investigation. The findings contribute to a deeper understanding of the evolving nature of accounting theory formulation and its implications for the accounting profession. The study concludes that the positive and normative accounting theory is the first set of accounting theories that produce other accounting theories.
The use of AI in the public sector is emerging around the world and its spread affects the core States functions: the administrative, the judiciary, and the legislative. Nevertheless, a comprehensive approach to AI in the life-cycle of rules - from the proposal of a new rule to its implementation, monitoring and review- is currently lacking in the rich panorama of studies from different disciplines. The analysis shows that AI has the power to play a crucial role in the life-cycle of rules, by performing time-consuming tasks, increasing access to knowledge base, and enhancing the ability of institutions to draft effective rules and to declutter the regulatory stock. However, it is not without risks, ranging from discrimination to challenges to democratic representation. In order to play a role in achieving law effectiveness while limiting the risks, a complementarity between human and AI should be reached both at the level of the AI architecture and ex post. Moreover, an incremental and experimental approach is suggested, as well as the elaboration of a general framework, to be tailored by each regulator to the specific features of its tasks, aimed at setting the rationale, the role, and adequate guardrails to AI in the life-cycle of rules. This agile approach would allow the AI revolution to display its benefits while preventing potential harms or side effects.
AI auditing is a rapidly growing field of research and practice. This review article, which doubles as an editorial to Digital Society’s topical collection on ‘Auditing of AI’, provides an overview of previous work in the field. Three key points emerge from the review. First, contemporary attempts to audit AI systems have much to learn from how audits have historically been structured and conducted in areas like financial accounting, safety engineering and the social sciences. Second, both policymakers and technology providers have an interest in promoting auditing as an AI governance mechanism. Academic researchers can thus fill an important role by studying the feasibility and effectiveness of different AI auditing procedures. Third, AI auditing is an inherently multidisciplinary undertaking, to which substantial contributions have been made by computer scientists and engineers as well as social scientists, philosophers, legal scholars and industry practitioners. Reflecting this diversity of perspectives, different approaches to AI auditing have different affordances and constraints. Specifically, a distinction can be made between technology-oriented audits, which focus on the properties and capabilities of AI systems, and process-oriented audits, which focus on technology providers’ governance structures and quality management systems. The next step in the evolution of auditing as an AI governance mechanism, this article concludes, should be the interlinking of these available—and complementary—approaches into structured and holistic procedures to audit not only how AI systems are designed and used but also how they impact users, societies and the natural environment in applied settings over time.
Increasing interest from stakeholders has brought new focus on risk governance and risk regulation, such as the regulator’s execution of duty and tangible results on safety and environmental protection in oil and gas industry. One recent example, from 2019, is the Office of the Auditor General Norway’s (OAG) investigation of the Petroleum Safety Authority’s (PSA) follow-up on health, safety and the environment in the petroleum industry, where the regulatory regime in Norway resting on functional requirements was questioned. Simplistically speaking, there are two current traditions or main schools in regulatory regimes: use of functional requirements associated with co-regulation and use of normative requirements associated with prescriptive regulation. In this paper, we introduce a generic model from an attribute perspective on contrasting, gauging or evaluating the two different regulatory regimes. Furthermore, this approach may explain the controversy regarding the favouring of functional or prescriptive regulatory regimes by the different players in the industry. Our case is based on regulations relating to offshore oil and gas operations, in particular focusing on the Norwegian sector. We use the OAG’s investigation of the PSA and the public reaction as our material because this material is proposed to provide a thorough and valid description of how the effects of the Norwegian regulatory regime are perceived from the outside. We believe that the generic concept presented here is applicable when performing investigations in other industries involved in hazardous activities.
La consolidación democrática de un país depende de la calidad de sus instituciones. Eso suena a lugar común. Pero lo que en realidad importa es cómo definimos estas instituciones; cómo las instituciones formales se relacionan con las informales, con las prácticas cotidianas de la gente, con la cultura política. Las instituciones sí son relevantes, pero lo fundamental es su relación con las dinámicas políticas y sociales subyacentes que quieren cambiar. Al analizar la naturaleza del desarrollo institucional en el Perú de los últimos años, este libro destaca la necesidad de una visión de largo plazo que tome en cuenta plenamente el contexto histórico en el que las instituciones puedan crecer. En el último cuarto de siglo no ha faltado intentos de construir nuevas instituciones democráticas, pero los logros duraderos -que sí lo hay- han sido decepcionantes. Las bases para una democracia verdadera son aún débiles.
In this paper we posed a question about the role of the state with regard to imposing regulations on the sharing economy sectors. Analysis of the institutional frames of the regulatory intervention of the state in the sharing economy still constitutes an underexploited niche. We drew on the literature in institutional economics and other related fields to provide a picture of a reasonable regulation of markets introduced by a state. The paper covers the spheres of information asymmetry, imperfect competition, negative externalities, and the supply of public goods. What may be generally concluded is that there are no sufficient arguments for treating sharing economy entities more favorably as compared to other organizations. As regards the imperfect competition and negative externalities, sharing economy entities may play a key role and should not be excused from respecting general legal rules. Otherwise, some market actors would use the sharing economy cover just to take advantage of the exemptions. The sharing economy may be also an attractive channel of activity from the perspective of policymakers for mixing direct governmental support with other (social) sources for public goods.
The chapter discusses the rationale for delegation of MPP to an independent authority with reference to the time-inconsistency literature. It analyses the issue of capture of central bankers in relation to MPP, focusing on the potential of intellectual capture. It further elaborates on the accountability of central banks and discusses the additional challenges towards an accountability framework for MPP. It is reiterated that the delegation of MPP to independent central bankers, along with the policy choice of a guided discretion framework, poses several challenges for the design of accountability mechanisms. It is further argued that the accountability regime of MPP should consider the potential of reputational accountability for central bankers.
Large language models (LLMs) represent a major advance in artificial intelligence (AI) research. However, the widespread use of LLMs is also coupled with significant ethical and social challenges. Previous research has pointed towards auditing as a promising governance mechanism to help ensure that AI systems are designed and deployed in ways that are ethical, legal, and technically robust. However, existing auditing procedures fail to address the governance challenges posed by LLMs, which display emergent capabilities and are adaptable to a wide range of downstream tasks. In this article, we address that gap by outlining a novel blueprint for how to audit LLMs. Specifically, we propose a three-layered approach, whereby governance audits (of technology providers that design and disseminate LLMs), model audits (of LLMs after pre-training but prior to their release), and application audits (of applications based on LLMs) complement and inform each other. We show how audits, when conducted in a structured and coordinated manner on all three levels, can be a feasible and effective mechanism for identifying and managing some of the ethical and social risks posed by LLMs. However, it is important to remain realistic about what auditing can reasonably be expected to achieve. Therefore, we discuss the limitations not only of our three-layered approach but also of the prospect of auditing LLMs at all. Ultimately, this article seeks to expand the methodological toolkit available to technology providers and policymakers who wish to analyse and evaluate LLMs from technical, ethical, and legal perspectives.
Regulation is known to change the incentives a firm faces to invest, inducing some firms to invest too much, and others too little. Regulators must set prices to achieve several conflicting objectives, including providing the incentive to invest. Optimising investment is a particular problem in regulated airports, and many of the inefficiency problems noted with airports can be ascribed to inadequate or excessive investment. Airport regulation is also expected to address issues of congestion, quality of service and productive efficiency, while, in many cases, at the same time achieving distributional objectives. This chapter explores the properties of alternative forms of regulation, including price caps, cost plus and light handed, in achieving the optimal level of investment, along with meeting other objectives. Cost-based regulation can have advantages over price caps in some contexts. The optimisation task is helped considerably by the existence of secondary instruments, including slot controls and conditional price caps.KeywordsPrice capsCost-based regulationLight-handed regulationCongestionEfficient pricingAirport slots
Water is a fundamental resource for the birth, development of human civilization. The right to water is one of those rights that transcends and embraces the whole history of man and society. However, in our contemporary society the right to water seems something new, almost a post-modern innovation. Research at European level has taken up the challenge and the scientific water community is committed to rapidly developing and transferring management solutions that make our cities more liveable and the negative pressures on the availability of good quality water for uses increasingly irrelevant potable and civil. In this context it is important to develop a regulatory and legislative approach that does not settle for damage-repair dynamics but an approach aimed at prevention and planning directed towards two contexts: procurement and recycling-reuse.
Bağımsız idari otoriteler, modern bir yönetim kavramı olarak iyi yönetişimin önemli ve açık bir örneğidir. Bağımsız düzenleyici otoritelerin kamu yönetimindeki önemi giderek artmaktadır. Bağımsız idari otoritelerin kamu yönetiminde özerk bir kurum olarak ortaya çıkması regülasyon politikaları ile bağlantılıdır. Çalışmada ekonomik etkiler yaratan bağımsız idari otorite yapılanması incelenmiştir. İlk olarak bağımsız idari otoriteler regülasyon kavramı çerçevesinde ele alınmıştır. Ardından, regülasyon süreçlerinin etkin yönetilmesi tartışılmıştır. Bu bağlamda bağımsız idari otorite ve yönetişim arasındaki ilişki ortaya konulmuştur. Ekonomik regülasyonların uygulayıcısı konumundaki bağımsız idari otoriteler ideal yönetişimi sağladığı takdirde beklentilerle uyumlu sonuçlar ortaya koyacaklardır.
The occurrence of several offshore petroleum accidents in Nigeria supports the conclusion by some authors that the Petroleum Act (PA) 1969 regime is fraught with lapses. Environmental protagonists have applauded the Petroleum Industry Act (PIA) 2021 as the way forward in the regulation of offshore risk. This paper uses the non-doctrinal methodology to investigate the extent to which the PIA 2021 has progressed beyond the PA 1969 in effectively regulating offshore risk in Nigeria’s petroleum sector. Such analyses are predicated on the general principles of effective risk governance regime evidenced in international best practices. This study finds that the PIA 2021 has not successfully f illed the existing gaps identified in the PA 1969 regime. It was argued that while the PIA provides for the establishment of a separate regulator, it retains the defects of the 1969 Act, including conflict of interest replete in the regulator being the regulated and the dual role of the regulator in maximizing revenue and risk governance. Another defect is the retention of a prescriptive method of regulation, which was argued to be ineffective in regulating an ever-evolving risk environment. It is expected that such analyses will prove useful in guiding future reforms in the Nigerian petroleum sector, as well as other jurisdictions, given that risk regulation is an area of transnational law. The authors recommend the adoption of goal-setting risk governance regulation, which allows for flexibility, leaving safety in the hands of those with better expertise to guarantee it, i.e. the operator.
Keywords: risk governance; Petroleum Industry Act 2021; conflict of interest; prescriptive method of regulation; goal-setting risk governance regulatio
Increasing interest from stakeholders has brought about a new emphasis on risk regulation in the oil and gas industry. Our basis for this work is the offshore oil and gas industry, which is composed of major operators, entrepreneurs and contractors working globally, but we focus on Norwegian and US activities. The fundamental strategies, institutions, legal traditions and explanations of regulation are reviewed and, together with empirical data, a novel model with the means of identifying “effective” regulation has been developed. The model presented here incorporates three dimensions: the industry’s intentions; their resources and expertise and trust in the regulator (and vice versa: the regulator’s trust in the industry); and the space where functional respective normative rules are deemed most effective.
O Relatório Técnico contém os resultados do estudo que buscou identificar ações que o governo poderia adotar para estimular essa adoção pelas organizações, de forma a auxiliar a formulação de novas políticas de governo e/ou colaborar com o aprimoramento das já existentes, propiciando um contexto de melhor custo-benefício para as partes envolvidas. Discorre-se sobre aspectos da regulação no contexto das iniciativas voluntárias, as vantagens da implementação de sistemas de gestão da SST, os desafios da implementação desses sistemas, as formas e os tipos de incentivos para implementação de sistemas de gestão da SST. Além disto, são apresentadas e analisadas algumas iniciativas internacionais para promoção de sistemas de gestão da SST.
An inquiry into CSR and regulatory paradigm attempts to answer far more pertinent questions rather than only focussing on the factors of economic value creation. An analysis of the role of state politics and corporate strategies of CSR delves deeper into the dynamics interplaying between multiple actors of governance archetype and tries to find answers of the wavering relationship between state, market, civil society and citizenry.
This article is a taxonomy of laws used by ‘unfree’ and ‘partly free’ countries to regulate social media platforms and their users. While there are many older laws that can have an effect on social media usage (such as laws on defamation, sedition, and terrorism as well as laws regulating the journalism industry) and some older pieces of legislation will be discussed, the focus of this article will be on regulations that specifically reference social media or the internet. It will explore two categories of regulations, each of which are subdivided into two types of legislation. The first category concerns laws that are targeted at social media users and is divided into laws that regulate the conduct of users and laws designed to dissuade people from using social media. The second category examines laws that are targeted at social media platforms (as opposed to their users) and first considers substantive regulations before moving on to look at procedural regulations. This article attempts to capture the complex interactions between public and private actors. This article also tries to shed light on the morass of local laws that platforms must navigate in order to maintain access to an ever-growing number of jurisdictions.
The theory advanced is that precise rules more consistently regulate simple phenomena than principles. However, as the regulated phenomena become more complex, principles deliver more consistency than rules. A central reason is that the iterative pursuit of precision in single rules increases the imprecision of a complex system of rules. By increasing the reliance we can place on a part of the law we reduce the reliability of the law as a whole. Then it is argued that consistency in complex domains can be even better realised by an appropriate mix of rules and principles than by principles alone. A key choice here is between binding rules interpreted by non-binding principles and non-binding rules backed by binding principles. The more complex the domain, the more likely it is the latter that will deliver greater consistency. Robert Baldwin argues that the reason "Why Rules Don't Work" is that they are typically evaluated without reference to the context of their implementation. Hence we cannot understand when law is and is not consistently implemented by the police without confronting the fact that police culture is not a rulebook, but a storybook. In complex domains, when police, regulatory inspectors and judges enforce rules consistently, they do so as a result of shared sensibilities. Regulatory conversations that foreground obligatory principles buttressed by non-binding background rules is hypothesised to be the stuff of legal certainty on such complex terrain.
The development of new media industries, stimulated by the technology of digitalisation, has thrown up an important literature on mechanisms for regulation and control. In this article we elaborate on and develop Lawrence Lessig's "modalities of regulation" analysis. As we reconceive them the four basic control forms are premised upon hierarchy, competition, community and design and can be deployed in fifteen pure and hybrid forms. This analysis is enriched through elaborating on the essential elements of control systems (standard-setting, monitoring and behaviour modification) to demonstrate the importance and variety of hybrid forms that real-world control systems take in the new media domains. Although the article does not provide any universal prescriptions as to which control forms are likely to be most appropriate in particular domains, it does provide a richer analytical base both for understanding existing control mechanisms and the potential for using greater variety. The development of regulatory regimes which are both legitimate and effective in any given domain is likely to require sensitivity to the particular context and culture of both the domain and the jurisdiction within which it is located.
After discussing examples of enforcement failures for regulatory contracts in Africa, we develop a regulation model with asymmetric information and imperfect enforcement. Either the regulator succeeds in forcing the regulated firm to fulfill the contract or renegotiation takes place. The probability of renegotiation decreases with the level of enforcement expenditures which is chosen by the regulator. The model suggests that the endogenous level of enforcement decreases with the proneness to corruption, and increases and then decreases with the level of development. Finally, we document this relationship empirically. Copyright 2003, Oxford University Press.