Learning from Regulatory Disasters

18 Pages Posted: 9 Dec 2014

See all articles by Julia Black

Julia Black

London School of Economics - Law Department

Date Written: November 6, 2014

Abstract

Regulatory disasters are catastrophic events or series of events which have significantly harmful impacts on the life, health or financial wellbeing of individuals or the environment. They are caused, at least in part, by failures in, or unforeseen consequences of, the design and /or operation of the regulatory system put in place to prevent those harmful effects from occurring. Regulatory disasters are horrendous for those affected by them. Because of that we have an obligation to learn as much from them as we can, notwithstanding all the well-known challenges related to policy and organisational learning. The article focuses on five distinct and unrelated regulatory disasters which, although they occurred in apparently unrelated domains or countries, contain insights for all regulators as the regulatory regimes share a common set of elements which through their differential configuration and interaction create the unique dynamics of that regime. In the regulatory disasters analysed here, these manifest themselves as six contributory causes, operating alone or together: the incentives on individuals or groups; the organisational dynamics of regulators, regulated operators and the complexity of the regulatory system in which they are situated; weaknesses, ambiguities and contradictions in the regulatory strategies adopted; misunderstandings of the problem and the potential solutions; problems with communication about the conduct expected, or conflicting messages; and trust and accountability structures.

Suggested Citation

Black, Julia, Learning from Regulatory Disasters (November 6, 2014). LSE Legal Studies Working Paper No. 24/2014. Available at SSRN: https://ssrn.com/abstract=2519934 or http://dx.doi.org/10.2139/ssrn.2519934

Julia Black (Contact Author)

London School of Economics - Law Department ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

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