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This chapter examines the process of regulatory reform, or ‘better regulation’. It describes the background and development of this movement, suggesting that it has two different emphases. The first is to reduce regulatory burdens through lifting both substantive regulatory requirements and administrative rules; the second is to improve the process of regulatory deliberation through improved consultation and reform of enforcement. Different stages of the process are described, including the effect on regulators of the Legislative and Regulatory Reform Act 2006, the move to risk-based regulation after the Hampton review, and the use of regulatory impact assessments. The chapter also discusses monitoring of regulators' protection of human rights and of their role in promoting sustainable development.

Focuses on the shortcomings of the new approach to market integration, and the reform efforts to make the single market a finished reality. Highlighting both recent EU proposals for further regulatory reform and industry reactions to them, the chapter provides key insights into the complex and contested nature of market integration. The chapter focuses on the challenges governing the market, not only in terms of legislative and institutional design but also its implementation and evaluation. The problems that remain indicate that the effectiveness and efficiency of the regulatory strategy to address trade barriers, by using both the public and private sector to set down the rules for market access, has undermined the completion of the single market. Market management and regulatory reform have increased in importance in an effort to address the political commitment to the single market, and growing concerns about the efficiency and efficacy of the efforts to reconcile regulation and free trade among divergent national economies.

This chapter aims to contribute to the debate on financial system reform. The first part describes what is perceived to be a massive regulatory failure, a breakdown that goes all the way from regulatory fundamentals to prudential implementation. The second part discusses some implications of recent events for financial sector regulation. It argues that to avoid a repetition of the financial crisis, we need both to change public policies that contributed to the crisis (particularly the mortgage crisis) and to institute financial reforms. Desirable reforms of public policy regarding real estate lending include promoting consumer protection and reducing subsidies. Financial regulation must also be international. The creation of supranational regulatory structures has become increasingly urgent in a world in which institutions and counterparties are truly international.

Focuses on early efforts in the 1960s and 1970s by the European Community to address trade barriers through the harmonization of national regulatory policies and practices. The push for harmonization of national policies in Europe was driven by the understanding that, without regulatory intervention at the regional level, there would be no single market and that trade conflicts would escalate. This chapter illustrates the tremendous difficulties that this (old approach) policy of harmonization encountered, despite a strong legal basis in the treaty to eliminate disparities in national regulatory systems. Since this policy reflected a regulatory mismatch, as the instruments chosen were ill‐suited to dealing with the problem, the chapter concludes by focusing on how political and economic constraints forced the EU to undertake regulatory reform to achieve a better match between its policy objective and outcomes.

This chapter discusses the delegation of implementing powers by the Council (or by the Council and the EP) to the Commission or to European agencies. While delegation to the Commission may involve wide discretionary powers, European agencies are denied the regulatory powers which national agencies normally have. The Commission uses the principle of institutional balance to impede institutional developments which would reduce its own role, but would enhance the credibility of European policies. The division of roles between the Commission and the agencies aggravates an already serious accountability problem.

This chapter describes different models of regulation that underlie regulatory reform, and suggests that the UK has characteristically adopted an unduly narrow model of regulation as a whole. In many areas the regulatory design has been successful, and regulatory agencies are well-established in economic life. There are also a large number of agencies for social regulation, and these have been less studied. Indeed, there may now be an argument that economic and social regulation are coming together through the influence of challenges such as climate change. This often involves collaboration between agencies and government; thus the concept of regulatory independence needs clarification and a clearer allocation of responsibilities made.

This chapter focuses on the many areas of policy debate and reform in the run-up to, and after, the 1997 Labour election victory. Specifically, it looks at regulation and regulatory reform. The regulatory regime for both gas and electricity was designed without much thought to its wider role in energy policy. The architects of privatization believed strongly in their own rhetoric on competition: energy markets were on a path from monopoly to competition. The job of regulation was to manage that transition, and to ensure that the residual natural monopoly was subject to price controls. Even here, the role of regulation was limited: regulators would use RPI-X to bear down on costs, mimicking the competitive market. It was never intended that regulators would be able to accurately model costs — rather the companies' response to the constraint on prices would reveal them. And, in any event, large parts of the natural monopoly could be unbundled, and, hence, deregulated.

This chapter considers a major phenomenon in the regulatory state, which is all too easily glossed over — the role of ‘bureaucratic regulation’ of public bodies by other public bodies. A prime concern is the instruments of the so-called ‘audit culture’ which has flourished in the UK under successive governments. The chapter gives an insider's view of the role of the National Audit Office in scrutinizing the workings of the regulatory reform agenda, with particular reference to the fashionable tools of impact assessment and risk-based evaluation. In so doing, it emphasizes the empowering of parliamentary scrutiny through reports on (lack of) value for money to the House of Commons Public Accounts Committee. It also emphasizes the importance of the work in terms of the economic footprint of regulation.

The dramatic deepening of the identification of northern whites with protesting southern blacks, and the profound arousal of civil consciousness that both triggered and reflected it pushed the elected representatives of the civil sphere decisively in the direction of regulatory reform. When there is an independent civil sphere, powerful state officials face two masters. Authorities in the structure of state power, they are, at the same time, officials of the civil sphere. On the one side, they face power-political considerations generated by the need to maintain governmentality, state power, and party position; on the other side, they face demands for moral solidarity and symbolic responsiveness from the civil community. Until Birmingham, the reformist thrust of the Kennedy administration had been paralyzed by the countervailing pressure to maintain the allegiance of the Democratic Party in the South. After Birmingham, they were much less willing to accept these power-political “necessities,” and they became more responsive to riveting moral demands from the civil sphere.

This chapter reviews the development of both EU and US regulatory policies and practices regarding agricultural biotechnology since 2000, in light of bilateral and international pressures. The first section examines the remarkable root-and-branch reform of the EU's regulatory framework. The second section examines the domestic debate over the adequacy and possible reform of the US regulatory framework for GM foods and crops, and the resulting incremental changes to the behaviour of market actors as well as US national regulators. The story of US and EU regulation of GMOs since 2000 has primarily been one of continuity, with the US retaining its preference for a relatively lax, technocratic, and product-oriented regulation, while the EU has retained the essential features of its more precautionary and process-oriented regulatory system involving individual approval decisions by politicians.

Lower transport costs are associated with integration of markets within an economy and of those domestic markets with the rest of the world. These linkages support economic development. Determinants of transport costs include policy choices by government. A wide set of policies affects the performance of the transport sector, but the focus in this chapter is the contribution of trade policy and its reform. GATS provides a structure in which policy makers can commit to policy changes in the transport sector. Foreign participation in the transportation sector offers gains from specialization and trade, from competition, and from making available a wider variety of services. Reform in the transport services sector can lead foreign suppliers to establish local operations. There are some special features of the transport sector that complicate the application of trade-policy reform that indicate that successful trade-policy reform in this sector will demand a high level of capacity in government to design a trade-policy reform strategy. Support in this is an item for economic cooperation between developed and developing countries. A further concern linked to policy reform in the transport sector will be its impact on poor areas. International negotiations and the related commitments made through the GATS has added credibility to domestic policy, which is important because of the nature of the investment necessary in the transport sector, to suggest the direction of changes in regulatory reform, and perhaps to offer additional market-access opportunities that ease the adjustment costs in domestic markets that are becoming more open. The addendum to the chapter discusses issues and trade-offs for competition and reliability in trade in transport services.

This chapter discusses what many infrastructure industries have in common — economies of scale or scope — and how this poses some significant policy challenges for successful trade policy reform. These conditions can lead to natural monopoly. The problem is that the single producer may abuse its monopoly power by restricting the quantity or quality of output and pricing above costs. Opening this market to trade creates opportunity for alternative suppliers but also creates challenges of arranging the transition to a new provider and regulating them appropriately. The chapter discusses how international trade negotiations can contribute to ensuring successful outcomes. The key messages are that while natural monopoly is a common feature of the infrastructure sector, care should be taken not to exaggerate its importance. There are circumstances in which no policy problem arises. Further, even if there is an apparent natural monopoly, it is important to separate that part of the chain of supply from other elements in which competition can develop. Even so, natural monopoly elements remain. The GATS is relevant to natural monopoly markets and contains some disciplines on policy in those markets. Trade-policy reform can contribute to performance in markets in which natural monopolies have some influence. However, market opening has to be complemented by the appropriate regulatory structures to capture these benefits, for example, related to the terms on which competitive firms have access to bottleneck facilities. Commitments made through international trade negotiations can facilitate the necessary regulatory reform.

This chapter addresses the question of how the impetus to reform in response to the banking crisis was lost. It argues that democratic reform failed because competing technocratic and political elite groups could not agree on what was to be done or how reform was to be turned into a politically actionable story for the public at large. At the same time, financial elites remained remarkably resilient and politically effective in defending the status quo and frustrating reform. While reform has so far been disappointing, the chapter also explores how the political processes in the United Kingdom and the United States that delivered non-reform were deeply unsettling. The crisis was a moment of danger (and opportunity) for all elite groups because it unsettled their established assumptions.

This chapter demonstrates how, starting from a low base, domestic judges have become more involved in regulating the regulators. This development reflects and reinforces key trends in UK regulatory reform and is in line with general jurisprudential development, which encompasses expansionary elements of common law, EU law, and Convention rights. It is argued, however, that for good reason the judicial contribution remains determinedly modest. Constitutional and institutional limitations on the courts' role, commonly expressed today in the language of ‘deference’, point firmly in this direction — or away from so-called ‘hard look review’. Examination of the dynamics of the litigation also reveals several sets of tensions that generate further pressures for change. Prominent among these is the challenge presented to judicial review and the ordinary courts by competition law and high-powered specialist tribunals, and the practice of both weak substantive review and increasingly assertive procedural supervision.

This chapter shows that determining the proper role of bureaucracy in a market economy is a problem which should not be solved by simply applying universally the tools of neo-classical economic analysis. It demonstrates that meaningful proposals require an in-depth analysis of the institutional framework of the country under review. A new institutional economics approach is helpful in identifying the crucial issues of regulatory reform. In the case of Japan, regulatory reform is more than enhancing the efficiency of existing mechanisms. A structural reform of the political system appears to be a necessary step in order to reach the goals of regulatory reforms.

Governments regulate in response to crises of all kinds. Regulatory policy has emerged as a distinctive field of government in the past 25 years, with standards for cost-benefit analysis, impact assessment, consultation, and compliance. But many 21^st century risks linked to innovation or cross-border risks are not easily addressed through regulation; international regulatory co-operation works best on technical issues. Political leadership will be needed to create new alliances or frameworks to address global catastrophic risks. The private sector and government face security risks but of very different kinds, affecting hard and soft infrastructures. The new security economy defined by states has led to a revival of command-and-control regulation, and to something new on a global scale, extra-territorial regulatory reach. Expanding the scope for innovation will help the commercial economy generate solutions to collective problems.

This chapter sets out the main themes covered in this book. Part One presents seven country-based case studies of regulatory reform, followed by eight commentaries on this material from diverse theoretical perspectives in Part Two. The Conclusion draws together the lessons from this material and develops an analytical framework centred on an embedded regulatory state positioned on a spectrum between ‘rules and deals’, and shaped by a modified and expanded range of contextual factors. The chapter presents a literature review of extant scholarship on the regulatory state of the South, and articulates the three shared contexts that unite the otherwise disparate contexts ‘of the South’.

D'Arista and Griffith‐Jones stress the seeming contradiction that the more liberalized the financial system is, the greater the need for more effective regulation, to avoid massive and costly crises. The chapter develops the two basic principles on which such future financial regulation should be based. The first principle is counter‐cyclicality. It aims at correcting the main manifestation of market failures in banking and financial markets: their boom‐bust nature. The key idea is that (forward‐looking) provisions and/or capital required should increase as risks are incurred, that is when loans grow more, and fall when loans expand less. The application of this principle in Spain and Portugal shows that it is possible to design simple rules to make it effective.

The social and environmental impact of past donor induced reform and the resulting regulatory models in use in Latin America have contributed to giving International Financial Institutions (IFIs) a tarnished reputation. For a while now, IFIs have been under fire not just for pushing a one-size-fits-all agenda for economic and regulatory reform through loan operations but also for allowing the impacts of donor funded projects to reach unprecedented levels of social and environmental impacts. This chapter looks at past and present conditionality practice and its impact on energy-sector regulatory development. Two case studies, one in Argentina and one in Peru, are offered as examples. Some conclusions on the possible direction of conditionality practice and regulatory development in Latin America are drawn.