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Other CARR-funded research 2005-2010

Andy Gouldson

Regulating Environmental Risks: Examining and Understanding the Variability of Regulatory Outcomes

Despite significant amounts of research on the emergence of institutions for global governance, the importance of policy learning, the diffusion of standards and the influence of different regulatory styles, there have been very few studies that seek to compare substantive regulatory outcomes.

Within the environmental sphere, although many have studied regulatory processes, few have studied regulatory outcomes. In the 1980s Vogel (1986) conducted comparative research on regulatory styles in the US and the UK. He suggested that although both countries had a significantly different regulatory style, they each achieved similar regulatory outcomes. However, the evidence to underpin this observation was limited, and since then there have been few if any comparative studies of the outcomes of environmental regulation.

The lack of evidence has not prevented many politicians and other commentators making claims that about comparative levels of environmental protection. Vig and Faure (2004) for example state that:

The US in recent years has been abandoning its historical role as a leaver in environmental regulation. At the same time, the European Union, spurred by political integration, has enacted many new environmental laws and assumed a leadership role in promoting global environmental sustainability.

Such statements and the assumptions that underpin them have been influential politically. The EU's Lisbon Agenda for example - and the subsequent focus of much of the EU's and the UK's better regulation debate - has been based on the view that the EU leads the world in environmental protection but that its competitiveness has been undermined as a consequence.

Given the significance of these political debates, it is important to examine the evidence and to test the assumptions that underpin them.

Christopher Hood

Managing Political and Reputational Risk in a High Blame Context

This project aims to further develop the methodology first applied in CARR Discussion Paper 42, 'Fighting Fires in Testing Times: Exploring a Staged Response Hypothesis for Blame Management in Two Exam Fiasco Cases' (Hood et al. 2007), for the analysis of blame management strategies by public officeholders, such as politicians or regulators, in response to media 'firestorms' concerning scandals, policy fiascos or regulatory failures.

Building upon analysis of blame firestorms in England and Scotland, this research analyzes cases from the United States, Ireland and Canada, comparing blame management strategies of top-rank politicians (the US President, Bill Clinton, the Irish Taoiseach, Bertie Ahern and the Canadian Prime Minister, Jean Chretien) in response to scandals over public standards.

This research is to further develop our method for systematic analysis and comparison of the behaviour of officeholders facing blame, test the hypothesis that politicians will accept personal culpability only after other ways of handling blame have been exhausted, and consider the detectable impact of strategies on the next day's (media) blame level. As such, it examines the basic sequencing hypothesis of presentational strategies of officeholders (using survival or 'event history' analysis) and the relative effectiveness of those strategies for managing blame (using time series intervention analysis).

This project offers innovation in its development of an integrated theoretical and methodological approach for the analysis of public officeholders' management of political and reputational risk. In addition to time series intervention analysis (Box and Tiao 1975) used in our previous research, this will use survival analysis (e.g. Box-Steffensmeier and Jones 2004) to test the duration of time for which an officeholder persists with a particular presentational strategy, before retreating to a defensive strategy after previous strategies have become untenable. The selection of empirical cases from outside the UK is intended to enable comparative analysis (with a view to the addition of cases from non-Anglo-Saxon countries in future permutations of the research).

The research is relevant in particular to the CARR themes Performance, Accountability and Information and Reputation, Security and Trust. In a high blame context, with public demands for political accountability for under-performance, misconduct or failure, the sequencing and effectiveness of officeholders' management of political and reputational risk is a crucial dimension of performance of advanced capitalist democracies.

Michael Huber

Embracing Academic Risk

The study is exploratory in nature. Empirically it is mainly based on the collection of documents, both at the political and university level, and interviews with decision makers at regulatory agencies, persons relevant for the diffusion of risk management, as well as university administration and academic management. The documents comprise documented policy decisions, papers on the rationale for risk management in Higher Education (HE), responses and comments of stakeholders, studies carried out at the level of the HE system or single universities. These documents provide the core-information to reconstruct decision making at the political and organisational level. Interviews with relevant persons allow for a more complete collection of data and for some supplementary insights into the decision making processes.

As far as the political level is concerned, the data collection is restricted to the gathering documents and interviewing HEFCE officials. As far as universities are concerned, the risk management prescriptions of HEFCE indicate a diversified risk-appetite according to the academic quality of research and teaching. Therefore a selection of universities seems necessary to capture the span of risk management strategies from ignorance to enthusiasm. A first selection could be based on national ranking tables where three types of universities should be distinguished: (i) the internationally renowned university (top-10 in the national rankings of the Guardian or Times, e.g. Oxbridge, LSE)), the good national university (ranking between 20-35; e.g. Leeds, Manchester) and ordinary universities (bottom 20 of ranking, e.g. Greenwich, South Bank).1 These are just suggestions, to identify the relevant institutions; interviews at HEFCE will guide the grouping of the relevant institutions.

As far as the university level is concerned, it would not only be of interest to investigate the implementation of risk management, but also how and why universities oppose this management tool. For example, the University of Cambridge criticised the assessments carried out by the Quality Assessment Agency (QAA) as prone to failure, and even "alien to the character of the University and do carry pressures which could seriously damage the flexibility and diversity which is a particular strength of Cambridge; they would certainly be unprofitable for a University such as this" (Raban C. and Turner, E. (2003) Academic Risk. London HEFCE Report on Good Management Practice: 22). Light should be shed also on the refusal of risk management and under which circumstances this refusal proves successful.

The exploratory nature of the study concerns not only data collection, but also the development of a coherent and hopefully innovative theoretical framework. Even if there is a considerable body of literature on the entrepreneurial university, little analysis from a genuine sociological perspective has been developed. Even less literature is available on risk regulation in Higher Education and universities (e.g. King, R. (2006) Analysing the Higher Education Regulatory State. London: CARR Discussion paper 38). Hence, the empirical study may profit from CARRs expertise in the areas of risk-based regulation and risk organisation, as most of the scholars relevant for theoretical development in these areas are connected with or located at CARR. Thus, the Centre provides the optimal platform to discuss, develop and present this study. Moreover, it adds Higher Education to the selection of topics dealt with at CARR.

Liisa Kurunmäki

Performance, Accountability and Expertise: 'Payment by Results' as a New Risk Regulation Regime, 2008

This project extends an earlier one titled Performance, Accountability and Expertise: 'Payment by Results' as a New Risk Regulation Regime. The project retains the focus on Payment by Results (PbR), one of the most fundamental changes in NHS policy since the introduction of the 'internal market' in 1991. PbR represents the latest stage in a continuum of attempts to reform the NHS through accounting and, more specifically, costing. As a funding system, PbR promises to pay providers fairly and transparently by using a 'standard national tariff.' However, like all accounting based reforms, PbR encounters the range of professions and expertises active in the domain, and like all costing systems that give visibility where previously it was lacking, PbR creates new calculable spaces and new risks.

The main findings of the project to date are (Kurunmäki and Miller, 2008):

  1. PbR needs to be analysed not as a stand alone intervention, but as enmeshed within the inter-professional complex that emerges out of the interaction of different types of expertise. It is important to chart the nature of this inter-professional arena within which PbR operates. We have identified the multiple actors that are influential in the regulatory field of health service provision, and focused on three actors in particular: the National Institute for Health and Clinical Excellence (NICE), Monitor, and professional medical associations. We have analysed these three actors as representative of different types of expertise (schematically speaking, health economics, accounting and medicine).
  2. PbR, along with other regulatory interventions in the healthcare field such as those of NICE and Monitor, creates new and sometimes competing calculable spaces based on different entity assumptions. We emphasize the importance of being attentive to these different entity assumptions.
  3. Understanding the dynamics of PbR reform in the UK requires an analysis of the extent to which PbR creates new calculating selves, or a hybridizing of the calculating and medical self. The regulatory complex within which PbR operates may produce contradictory incentives and guidelines, and thereby contribute to an increase in systemic provision risks.

Until now, the project has focused on charting the multiple actors that are influential in the regulatory arena of health care. It has analysed the three interrelated sets of risks that this new regulatory regime has created: 'governance and financial risks', 'risks of gaming', and systemic 'provision risks'. Risks have been analysed both at the level of individual organisations that deliver health care, as well as at the level of the overall system of hospital provision.

Findings of this project have so far been published in an article (jointly with P. Miller) titled "Counting the Costs: The Risks of Regulating and Accounting for Healthcare Provision" (Health, Risk and Society, Vol. 10, No. 1, February 2008, pp. 9-21) and in an article (jointly with P. Miller and T. O'Leary) titled "Accounting, Hybrids and the Management of Risk" (Accounting, Organizations and Society, Vol. 33, No. 7-8, October-November 2008, pp. 942-967). The research findings have also been reported in the Winter 2007 issue of Risk&Regulation and they will be reported in the February 2009 issue of LSE Health Research Digest.

The extension of the project focuses on the theme of failure. Initial findings of this ongoing work have been published in a book chapter titled "Failing Organizations and Organizational Failures: The Case of Accounting and Health Care Regulation" in The Researcher and Developer of Accounting Thinking: 60th Anniversary of Professor Salme Näsi (eds. Hyvönen Timo & Laine Matias & Mäkelä Hannele, University of Tampere, Finland, December 2008). Further, the issue of failure in health care settings has been discussed in "Accounting for Failure" piece (jointly with A. Mennicken) published in the December 2008 issue of Risk&Regulation.

Javier Lezaun

The Joint Research Centre and the Technical Constitution of Europe

The research project described below consists in an in-depth study of the work of Joint Research Centre (JRC), the arm of the European Commission dedicated to providing technical and scientific support for the policies of the European Union. The key goal of this project is to explore and understand the epistemic and political dynamics of an organisation that is central to risk regulatory practices in Europe, and plays an essential role in the constitution of the European Union as technically homogenous political entity.

The Join Research Centre (JRC) is an odd organisation, a sort of hidden engine room of European policy-making and risk regulation. Created in 1958 under the Euratom Treaty to assist in the development of 'safe nuclear energy' across Europe, the JRC has since seen his remit and influence grow continuously, and is today the key reference centre for science and technology for the European Union. A recent review of JRC activities over the last decade, chaired by David King (former UK Chief Scientific Adviser) describes the JRC as 'an indispensable source of knowledge and expertise in support of the political agenda of the EU' (JRC, 2008). Today, the JRC comprises seven research institutes - Energy, Environment and Sustainability, Health & Consumer Protection, Prospective Technological Studies, Protection & Security of the Citizen, Reference Materials and Measurements, and Transuranium Elements) - three horizontal Directorates dedicated to the coordination of the institutes' activities, and a series of dedicated research facilities. Yet, despite the central role that the JRC plays across a range of EU policy domains, the organisation has received little if any attention from scholars in science policy, risk regulation, science and technology studies, or European governance.

Most importantly for the purposes of this study, in 1998 the JRC suffered an organisational overhaul and received a new mandate: 'to provide customer-driven scientific and technical support for the conception, development, implementation and monitoring of European Union policies'. This concept of 'customer-driven' expertise, and its relationship with the other key purpose of the JRC, the generation of 'robust science', has generated a great deal of wrangling in the JRC, and in European policy circles more generally (Nature, 2009). It is unclear how the direct and explicit mobilization of the JRC to the political goals of the Union has affected the standing and quality of its scientific research, but it has certainly made its expertise more central to the design and implementation of policy across the EU. Today, European policies and positions on a wide range of topics - from environmental sustainability to biotechnology, from nuclear safety to chemicals regulation - are underwritten by assessments, tools and inspections provided by the JRC.

Andrea Mennicken

Changing Accountability and Risk in the Management and Regulation of Security in the British Prison Service, 2008

Problematisations of traditional "command and control" regulation and the rise and spread of "New Public Management" reform agendas have brought new forms of public administration, with an increased participation of economic and scientific expertise. In this context particularly within the last ten years, increasing attention has been given by regulators and academics to what has come to be termed "risk-based regulation". To apply modern management thinking, a growing number of regulators across the UK, Australia and Canada have begun with the development of risk-based regulation schemes. This research project aims to investigate how concepts of risk and technologies of risk management have come to shape regulatory practices in the British Prison Service. The project pays particular attention to the impact of accounting and audit expertise in defining and operationalising ideas of risk-based regulation in British prison management.

The term risk-based regulation embraces a variety of different, sometimes conflicting, meanings and approaches. In broad terms, risk-based frameworks can be seen as an attempt to increase efficiency in the allocation of financial and human resources and further the development of cost-justified regulations. Risk-based regulation seeks to respond to regulatory problems in a manner proportionate to the risks that either regulators or regulated organisations identify. Emphasis is placed on systems of arm's length control, self-regulatory capacity and formalised performance management. It has stimulated the experimentation with mixed public-private organisation (e.g. sub-contracting services and market-testing) and a range of different calculative instruments (e.g. economic cost-benefit analyses, performance measurement systems, scientific risk assessment techniques and statistical risk profiling).

This project investigates how market-oriented concepts of risk and technologies of risk management have come to shape regulatory and management practices in the British Prison Service. In Britain, prisons have been at the forefront of market-oriented public sector reforms and risk-based regulation initiatives. Currently, there are 11 private prisons contractually managed by private companies in the UK. In April 2003, the Government introduced a "Benchmarking Programme", which requires both public and private prisons to undergo formalised performance and market tests on a regular basis. Within its finance division, the HM Prison Service has established a "corporate risk management framework". And at the level of day-to-day prison management, technologies of risk profiling have become widely used to govern prison populations. This research project seeks to unpack the various linkages that have become forged between managerial practices, techniques of risk and performance assessment, and concepts of crime, security and accountability. The project devotes particular attention to an analysis of the different rationalities, knowledges and bodies of professional expertise that have become involved in current prison management reforms and their effect on notions of accountability. It seeks to describe and explain in what ways, and to what extent, privatisation initiatives, financial accounting expertise and risk-based regulation tools challenge and redefine governmental accountability, ethical commitments and notions of punishment, crime and crime prevention. In so doing, the project aims to not only help enhance our understanding of economic and operational aspects of categories of risk, but also moral and political aspects.

Yuval Millo

Mapping the City: progress report for October 2007 - January 2008

The project is aimed at mapping the corporate and inter-personal connections, among UK corporations. The primary intention of the project is to provide a detailed empirical basis and an initial conceptual and methodological framework for analysing the current regulatory definitions and practices directed at corporate governance. The analytical scope of the research and the data collected are both broader those of typical studied in corporate governance. The research uses not only the connections formed between corporate boards through co-directorships (interlocking directorships), but also examines the personal histories of the directors, as well as those of other 'corporate experts' (accountants, financial advisors, lawyers) that form potential links among companies.

Data collected so far:

  • Interlocking directorships for FTSE All-Share companies (1998 - 2006)
  • Compensation given to corporate directors
  • Cross-ownerships among listed companies and between them and private comp.
  • Biographical data for executive and non-executive directors, auditors, financial advisors and legal counsellors of FTSE All-Share companies (1942 - present)

The first empirical analysis based on the mapping data examines the recent phenomenon of activist investors in UK quoted companies, the operating mechanism and the implications the trend has for the regulation of corporate governance. Active investors, as their name implies, try to take an active role in the strategic decision making of the companies in which they invest aiming to improve the performance of these companies. In doing so, and approaching companies' executive layer directly, active investors, in effect, challenge the regulatory logic behind corporate boards. The success of active investors also raises questions about the relationship between shareholders' size of holding and their degree of influence. Active investors with relatively small stakes in companies (often of the order of 10% or much less) have apparently been able to influence company boards to change their corporate strategy. One recent example is Trian, a US hedge fund, with a stake of 3% in the Cadbury Schweppes group, which has been able to influence changes in the group at a strategic level.

Initial findings coming from this research project indicate that active investors do not act individually but instead construct coalitions of shareholders through which they exert influence over the target company. Furthermore, the primary basis for such coalitions is rarely the shared ownership of the target company, but a variety of connections is used to build and maintain the coalitions. The findings tend to show that the existing regulatory framework, the one that focuses on dyadic company-company connections is limited. Instead, a system-wide examination of the connections among companies, independent investors and experts provides information that is more revealing and enables a more detailed analysis of contemporary UK corporate world.

Mark Thatcher

Report- CARR conference on Law, Expertise and Regulatory Politics 21-22 February 2008

The conference involved the presentations and discussion of papers concerning the interaction of law and expertise in regulatory politics, notably the decisions of non-elected regulators. It focused on how these organisations manage regulatory issues that involve different degrees and kinds of uncertainty, and especially how their institutional position, and expertise influence their role, outputs and accountability. It sought to analyse these organisations through the prism of two variables: the use of experts who claim technical or scientific knowledge; and the nature of law that governs the operation of NMIs To do so, it brought together academic from different disciplines (law, politics, sociology, science studies).

The following papers were presented:

  • Mark Thatcher (CARR and Department of Government, LSE) and Sweet Stone Sweet (Yale Law School and Political Science department)- Introductory Overview
  • Greg Shaffer (Loyola University Chicago School of Law)- Law, Expertise and the Regulation of GM Foods in the US and EU
  • Elizabeth Fisher (Corpus Christi College, Oxford)- A Lawyer's Perspective on Technological Risk, Expertise and Administration in the US and EU
  • Tim Sinclair (University of Warwick) The Politics of Creditworthiness in the European Union and the United States
  • Barry Barnes (Exeter), NMIs and Delegation in the Context of Biotechnology
  • Sheila Jasanoff (Harvard), Risk and Responsibility: A Changing Climate
  • Lukasz Gruszczynski (European University Institute, Florence)- Science and the Concept of Appropriate Level of Protection under WTO Law

There was lively discussion of several issues. One was the social construction of 'expertise'- how experts and expertise are defined, selected and then their expertise is used. There was also debate about how expertise legitimises decisions influenced by powerful interests and structures. The way in 'law' is in fact socially created was regarded as important. Equally, the value of independent and dependent variables in situations in which 'variables' are in fact socially constructed was discussed. The notion of independent regulatory agencies was subject to scrutiny, as certain regulatory, specially in the US, that are in fact seen as autonomous are not so legally, and vice versa for other regulators that are legally independent but not so in practice. In addition, the role of private bodies that in fact set standards causes difficulty for the concept. CARR's funding was essential for the conference which was truly multi-disciplinary (lawyers, political scientists, sociologists and science and technology studies) and international, both in terms of the origins of the participants and their empirical subject matter. The conference was also attended by several members of CARR and PhD students. It is hoped that there will be a second conference in Yale in 2009 to be followed by a publication.

Yally Avrahmpour and Paul Willman

Pension provision and the regulation of pensions have become a matter of both academic and policy interest. Private sector pension provision in particular raises issues about the ability of companies to sustain pension funding and about the role of shifting pension fund risk management practices on the evolution of capital markets. We are interested to investigate the role of corporate actors in pension provision and specifically the relationship between corporate actions and institutional factors internationally (Clark, 2000). Key questions are;

Do multinational companies calculate pension risk exposure?
How do companies respond to different regulatory regimes in pension provision?
Do pension risk considerations affect investment and operational decisions?
How are pension fund assets viewed in the context of financial strategy?
What are the governance mechanisms for pension funds and what is the relationship between stakeholder interest and pension policy?