Taking Responsive Regulation Transnational

Abstract:     
Ayres and Braithwaite’s Responsive Regulation (RR) has opened up important new ways of thinking about regulation in the 20 years since its publication. But RR was envisioned as a tool for domestic agencies. Thus, although RR focused on encouraging business self-regulation, it was designed for a setting in which agencies had clear jurisdiction, full regulatory capacity and extensive information, and could (contingently) deploy stringent sanctions against well-defined private targets. Since 1992, however, the locus of many regulatory problems has shifted to the transnational arena, characterized by multiple regulators, public and private, with limited capacities, authority and information and modest sanctioning ability. As production has globalized, moreover, targets have become diffuse and difficult to identify.

RR holds important lessons for transnational regulation, but it must be adapted to these challenging conditions. Some components of transnational RR are already emerging. These include many private and public-private schemes that regulate (and self-regulate) business through voluntary norms: “transnational regulatory standard-setting” (TRSS). Acting alone, however, TRSS schemes face serious limitations. International organizations (IGOs) are the best-positioned transnational responsive regulators, but lack agency-like authority.

To adapt RR to the transnational context, IGOs should focus on strengthening and working with the nascent TRSS system. Two techniques are particularly promising. In “regulatory collaboration,” IGOs engage with business to promote self-regulation, much as in RR. IGOs have limited ability to escalate in response to defection, but can deploy reputational and market sanctions (negative and positive). In “orchestration,” IGOs catalyze, support and steer intermediaries, including TRSS schemes and NGOs (PIGs), which use their own material and ideational capacities to regulate and promote self-regulation. Orchestration cumulates regulatory competencies and creates avenues of escalation. It also provides many benefits of RR “tripartism:” deterring capture, promoting contestability and experimentation, empowering societal groups and disciplining “zealous PIGs.” Orchestration can also be applied internationally in regulating states, and domestically in regulating business.

Number of Pages in PDF File: 27

Keywords: regulation, transnational, international organizations, private governance

working papers series