The Regulatory State in the Information Age

Abstract

This Article examines the regulatory state through the lens of evolving political economy, arguing that a significant reconstruction is now underway. The ongoing shift from an industrial mode of development to an informational one has created existential challenges for regulatory models and constructs developed in the context of the industrial economy. Contemporary contests over the substance of regulatory mandates and the shape of regulatory institutions are most usefully understood as moves within a larger struggle to chart a new direction for the regulatory state in the era of informational capitalism. A regulatory state optimized for the information economy must develop rubrics for responding to three problems that have confounded existing regulatory regimes: (1) platform power — the power to link facially separate markets and/or to constrain participation in markets by using technical protocols; (2) infoglut — unmanageably voluminous, mediated information flows that create information overload; and (3) systemic threat — nascent, probabilistically-defined harm to be realized at some point in the future. Additionally, it must develop institutions capable of exercising effective oversight of information-era activities. The information-era regulatory models that have begun to emerge are procedurally informal, mediated by networks of professional and technical expertise that define relevant standards, and financialized. Such models, however, also have tended to be both opaque to external observation and highly prone to capture. New institutional forms that might ensure their legal and political accountability have been slow to develop.

Keywords: regulation, information, platform, systemic risk, systemic threat, infoglut, compliance, audit, standards

JEL Classification: K23, K40