Responsive Regulation and Second-Order Reflexivity: On the Limits of Regulatory Intervention

Abstract

The volatile and complex nature of the contemporary society has created significant epistemic and normative challenges to the regulatory project. From a perspective that takes seriously these normative and epistemic challenges the shift to more reflexive and circumlocutory forms of regulatory control - as proposed by the idea of responsive/reflexive regulation - seems highly attractive. Closer inspection reveals, however, that there is a deep tension between the general epistemic modesty that underlies the different strands of reflexive regulation and the demanding epistemic requirements involved in their actual implementation. This epistemic paradox reflects a more general tension between the non-optimization approach of reflexive regulation on one hand and its claim to offer workable and welfare enhancing alternatives to the failing methods of conventional regulation on the other. My aim in this paper is to develop a deeper understanding of this paradox, drawing on the ideas of second-order reflexivity and meta-order inquiry. I argue that responsive/reflexive regulation should be reinterpreted as an effort to answer the problem of second order reflexivity, which, as I will show, plays a critical role in the regulatory project. This reinterpretation generates new conceptual, pragmatic, and empirical challenges that have not received sufficient attention in the current literature.

The first section of the article discusses this paradox in the context of three strands of responsive/reflexive regulation: self-regulation, responsive regulation, and reflexive law, as they were developed by such writers as Ian Ayres, John Braithwaite, Julia Black, Robert Baldwin, and Gunther Teubner. It begins with a general discussion of the challenges of social engineering, then moves to a detailed analysis of epistemological and teleological tensions than underlie the reflexive regulation project. The second section explores the possibility of a meta-order solution to this conundrum, developing an understanding of second-order reflexivity. Second-order reflexivity involves an attempt to take a step back from the substantive debate among theoreticians and practitioners of responsive or reflexive regulation in order to enable a critical examination of the presuppositions and commitments underlying this debate. In this context, I will discuss the meta-order puzzle in other disciplines, including philosophy (e.g., meta-epistemology and meta-ethics), decision-making theory (the “deciding how to decide” puzzle), and systems theory (the idea of the observer). The article concludes by revisiting the theoretical structure and practical message of reflexive regulation, drawing on the idea of second-order reflexivity, focusing in particular on the challenge of creating institutional sensitivity to reflexivity of a higher order.

Keywords: reflexive regulation, responsive regulation, second-order reflexivity, meta-regulation

JEL Classification: K10, K20