Courage, Regulatory Responsibility, and the Challenge of Higher-Order Reflexivity

Abstract

Contemporary regulators must respond to ever-increasing societal demands in various domains. Regulators must cope with these demands under conditions of extreme epistemic scarcity and ideological divide. This leaves regulators perplexed about what action they should take. Regulatory praxis offers two primary responses to this moral and epistemic dilemma: technical canonization and reflexive regulation. While these two approaches represent contrary regulatory philosophies, they suffer from two common blind spots: (a) disregard of the critical role of discretionary judgment in regulatory action; and (b) disregard of the dilemma of higher-order reflexivity. The article explores the idea of higher-order reflexivity in the regulatory context. This exploration renders visible the abysses that are faced by regulators as they attempt to resolve regulatory dilemmas through a cognizant and introspective process. The article argues that the Socratic concept of courage and the idea of forward-looking responsibility provide a plausible framework for thinking about the challenge of regulatory judgment. It concludes with a discussion of the legal and institutional mechanisms that could both facilitate and put to scrutiny the realization of this ideal (but noting also several features of the contemporary regulatory system which constitute potential barriers).

Keywords: forward-looking responsibility, higher-order reflexivity, regulatory judgment, Socrates.

JEL Classification: k32, k23