Much hype has been generated about the importance of innovation for public and private sector organisations. "Regulatory Innovation" offers the first detailed study of regulatory innovation in a multiplicity of countries and domains. This book draws on in-depth studies of innovation in regulatory instruments and practices across high- and low-technology sectors, across different countries and from the early to the late 20th century. Highlighting different 'worlds' of regulatory innovation - those of the individual, the organisation, the state, the global polity, and innovation itself, this book offers a fresh perspective and valuable insights for the practice and study of regulatory innovation. The explicit comparative focus of the case studies and the 'worlds of regulatory innovation' approach make this book essential reading for academic researchers and students interested in regulation.

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Julia Black's book is the first authoritative study of rulemaking in one of the most important areas of economic life: financial services. The books has three main aims: first, to build a jurisprudential and linguistic analysis of rules and interpretation, drawing out the implication of these analyses and developing quality proposals for how rules could be used as instruments of regulation. Second, it interprets that analysis and set of proposals with an empirical study of the formation and use of rules in a particular regulatory system: financial services, and third, it evaluates the nature of the rulemaking process. The author's main case study, examining the use of self-regulation in the financial services sector, complements the detailed analysis of rule formation and uses. The book will be an invaluable addition to the libararies of all administrative lawyers and anyone with an interest in the provision and regulation of financial services.

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Legitimacy is not just a normative challenge for regulators; it is also a functional one. Without legitimacy, regulators will not be able to motivate others to accept and support their regulatory strategies. Regulators, therefore, have to attempt to create and manage their own legitimacy. Legitimacy management is a key issue in particular for non-state regulators that lack a legally given monopoly or mandate to regulate, for they have to persuade others to comply with their norms. Moreover, they may have to compete for ‘regulatory share’; in other words, they may have to compete against other regulators in an attempt to ensure that others ‘buy’ their regulations rather than those of their competitor. This paper argues that legitimacy is a key element in this competition for regulatory share. The paper distinguishes between export-based and import-based strategies of regulatory competition, and identifies different strategies for managing legitimacy in an attempt to gain regulatory share. It goes on to suggest that in order to understand the role of legitimacy in this dynamic, we need a particular conception of legitimacy. Legitimacy should be conceptualized not as an attribute or a resource, but as an endowment. Regulators can try to gain legitimacy and can do so in the context of a competition for regulatory share, but whether they get it and from whom depend on the assessments of their various legitimacy communities. Despite the organisation’s best efforts, legitimacy may not be forthcoming at all from those legitimacy communities from whom it is sought, thus limiting the regulator’s ability to expand its regulatory share.

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The legitimacy and accountability of polycentric regulatory regimes, particularly at the transnational level, has been severely criticized, and the search is on to find ways in which they can be enhanced. This paper argues that before developing even more proposals, we need to pay far greater attention to the dynamics of accountability and legitimacy relationships, and to how those in regulatory regimes respond to them. The article thus first seeks to develop a closer analysis of three key elements of legitimacy and accountability relationships which it suggests are central to these dynamics: The role of the institutional environment in the construction of legitimacy, the dialectical nature of accountability relationships, and the communicative structures through which accountability occurs and legitimacy is constructed. Second, the article explores how organizations in regulatory regimes respond, or are likely to respond, to multiple legitimacy and accountability claims, and how they themselves seek to build legitimacy in complex and dynamic situations. The arguments developed here are not normative: There is no ''grand solution''proposed to the normative questions of when regulators should be considered legitimate or how to make them so. Rather, the article seeks to analyse the dynamics of legitimacy and accountability relationships as they occur in an attempt to build a more realistic foundation on which grander ''how to''proposals can be built. For until we understand these dynamics, the grander, normative arguments risk being simply pipe dreams – diverting, but in the end making little difference.

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The first article in this series (J Benjamin and D Rouch, "The International Markets as a Source of Global Law: The Privatisation of Rule-making?" (2008) 2(2) Law and Financial Markets Review 78) assessed the extent to which the markets are able to act as rule-makers and the nature of the "normative arena" in which they do so. This article considers how their role could develop and the implications of that in terms of market engagement in the rule-making process and legitimacy. The final article in the series will look at some of the risks this changing landscape creates, particularly in the context of dispute resolution and enforcement.

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Really Responsive Regulation seeks to add to current theories of enforcement by stressing the case for regulators to be responsive not only to the attitude of the regulated firm but also to the operating and cognitive frameworks of firms; the institutional environment and performance of the regulatory regime; the different logics of regulatory tools and strategies; and to changes in each of these elements. The approach pervades all the different tasks of enforcement activity: detecting undesirable or non-compliant behaviour; developing tools and strategies for responding to that behaviour; enforcing those tools and strategies; assessing their success or failure; and modifying them accordingly. The value of the approach is shown by outlining its potential application to UK environmental and fisheries controls. Putting the system into effect is itself challenging but failing to regulate really responsively can constitute an expensive process of shooting in the dark.

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Explores developments in managing the regulatory state, namely: (1) meta-regulatory strategies aimed at governmental and non-governmental regulators; (2) risk-based regulation; and (3) the increased enforcement and sanctioning powers of governmental regulators.

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The UK Financial Services Authority (FSA) leads the way in the development of Principles-based regulation of the financial services industry. It is proposing a significant shift towards reliance on broadly stated Principles rather than more detailed rules. The implications of a more Principles-based approach for regulators, those regulated by the FSA and those whose interests the regulatory regime is designed to protect are the subject of ongoing dialogue. 

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Risk based regulation is a new arrival in the lexicon of risk and regulation. Regulators in Australia, Canada and the UK have begun developing systems and processes to assess the probability and impact of compliance failures by regulated firms, and to adjust their relationship with firms accordingly. This article explores the motivations for, and key elements of, the risk based frameworks of one of those regulators, the Australian Prudential Regulation Authority (APRA). It broadens out from this case study to argue first, that risk based regulation goes hand in hand with the technique of 'meta' regulation, the regulation of the firm's own internal self regulation, and will both fuel and be fuelled by any trend towards the latter. Secondly, it argues that risk based frameworks are not risk-free: whilst they seek to manage risks they inevitably introduce their own. Thirdly, risk based regulatory frameworks have the potential both to expose and obscure key socio-political and socio-economic choices as to the amount or types of regulatory failures that an agency will tolerate, and which in effect it is requiring society to tolerate. 'Risk based frameworks' are attempt to define what are acceptable 'failures' and what are not, and thus to define the parameters of blame. 

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'Risk' is fast becoming the central organising principle in regulation and public service delivery. The article identifies two key elements of this development: internal risk management and risk based regulation, and argues that together they form what may be termed a 'new public risk management' (NPRM). This focuses on one strand of this development: risk based approaches to regulation. It briefly sets out its emergence in a number of regulatory bodies, and then explores in depth the development of risk based regulation in the Financial Services Authority. It identifies the key motivations, the main elements of the framework, and outlines some of its outcomes to date. It then stands back from the case study to consider some of the broader potential implications of the move to risk based regulation. It argues first, that they involve key choices as to how an agency will translate and operationalise its objectives, and what risks it decides not to focus its resources on trying to prevent. In a risk based framework, these are in effect decisions as to which types of failures an organization is willing to tolerate, and which it is not. Secondly, risk based frameworks, whilst they emphasise certainty and knowability over uncertainty and ignorance, are paradoxical. In their certainty they run the risk of failing to enable the regulator to respond to an unpredicted and unpredictable future. Thirdly, risk based regulation interacts with another technique of regulation which is much heralded in the literature: that of 'meta-regulation'. As a result, risk based regulation will both fuel and be fuelled by the current vogue for focusing on firm's internal controls in the successful operation of regulatory regimes. However, the two can never fit together completely, for the definitions of risk each employs may often be distinct. Finally, it is argued that the moves to risk based regulation introduce a new 'politics of accountability'. In risk based frameworks, the choices as to which types of failures to make are linked to attempts to define the parameters of blame. Through risk based frameworks, regulators are attempting to define what, to their minds, are the acceptable limits of their responsibility and hence accountability.

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Increasingly, regulation is being seen as 'decentred' from the state, and even from the well recognised forums of self-regulation. A decentred analysis has several strands, and seeing the nature and problems of regulation from a decentred perspective can be very stimulating. It opens up the cognitive frame of what 'regulation' is, enabling commentators to spot regulation in previously unsuspected places. It can prompt policy thinkers in academia and government to consider a wide range of different configurations of state, market, community, associations and networks to deliver public policy goals. But a decentred understanding of regulation also raises quite fundamental questions of the nature and understanding of regulation, the consequent role of the state, and our understanding of law. It means we can no longer escape the need to address the question of just what it is that is being 'decentred', of what is it that we want the concept of 'regulation' to do, and what some of the implications of that decision might be. The answers to these questions are at best contested and at worse simply incoherent. It is a debate which is sorely needed, however, and which it is the aim of the paper to promote.

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The fragmentation and hybridisation of governance has been a preoccupation of public lawyers and others for some time. Commentators have focused variously on the internal and organisational fragmentation of the executive (the development of next step agencies, for example, and the growth of new control relationships as a consequence of the implementation of strategies of new public management), on the fragmentation and hybridisation of service delivery (contracting-out, public-private partnerships, the private finance initiative), and on the fragmentation and hybridisation of regulation. Concerns have been both to map and analyse the changing nature of the exercise of governance functions and to address the issues of accountability to which such changes have given rise. The article focuses on regulation and suggests that we build on existing analyses of regulation as a decentred and fragmented activity by exploring the notions of regulatory capacity and regulatory enrolment, and provides illustrations using examples from the current system of UK financial services regulation. In focusing on regulatory capacity and regulatory enrolment, it is suggested, an analytical framework can be developed which has both prescriptive and descriptive dimensions, and which may facilitate thinking on how regulatory functions are and should be distributed between diverse actors in a regulatory system.

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The study of regulation is characterised by a kaleidoscope of lenses through which regulation is viewed, though little work has been done on how they might be integrated, or whether they are instead 'incommensurable paradigms'. Nevertheless, this article proposes another perspective, of discourse analysis. Regulation is in large part a communicative process, and understanding regulatory conversations is central to understanding the 'inner life' of that process. Why then not look to discourse analysis, that loosely defined body of theory that ranges across the social sciences and humanities which is concerned with the analysis of language and communication? The article analyses five core contentions of discourse analysis. These are first, that the meaning and use of language vary with context and with genre, and that the development of shared linguistic practices entails co-ordination and forms the basis of social action. Secondly, that communicative interaction is representative and in particular produces identities, which in turn affect social action. Thirdly, that language frames thought, and produces and reproduces knowledge. The fourth, closely related, contention is that language is intimately related to power: that it is marked by the values of social groups, that it encodes perspectives and judgements, and can instantiate certain perspectives or orthodoxies. Finally, that meaning, thought, knowledge and power are contestable, contested and dynamic. The article explores these contentions in the different strands of discourse analysis, and suggests how they might be further explored in the regulatory context and what they might add to current understandings of the dynamics of regulatory systems.

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The solution frequently being advocated to a range of regulatory and indeed constitutional questions is to devise procedures for participation, for democratisation. . The aim of this article is to explore just what the shift to procedures and to participation might involve. The article will appear in this journal in two parts. The first part distinguishes between two possible forms of proceduralisation, "thin" proceduralisation, based on a liberal model of democracy, and "thick" proceduralisation, based on deliberative models of democracy. In exploring the latter, the article takes as its starting point the work of Habermas. Given the richness and complexity of his argument the development of the notion of thick proceduralisation necessarily occurs in part through a critique of his work, for it is argued that although Habermas may provide an important starting point, his work cannot also be the end point of the debate. The second part of the article will discuss the modifications that may need to be made for "thick" proceduralisation to be adopted as a regulatory strategy.

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This article addresses three basic analytical questions: what is 'decentring regulation', what is 'self regulation' and how does it fit in the decentring analysis, and what meaning is given to 'regulation' to allow it analytically to be 'decentred' - how do we know 'decentred regulation' when we see it? Decentring is a term which is often used to encompass a number of notions, and has both positive and normative dimensions. It is used to express the observation that governments do not, and proposition that they should not, have a monopoly on regulation and that regulation is occurring within and between other social actors: there is 'regulation in many rooms'. Decentring is also part of the globalisation debate on the one hand, and of the debate on the developments of mezzo-levels of government (regionalism, devolution, federalism) on the other. Decentring is also used in a positive sense to describe the consequence of a particular analysis of social systems, in which politics and administration are, like law or economics, are described as being self referentially closed sub-systems of society, incapable of observing other systems except through their own distorted lenses; decentring is thus the removal of government and administration from the conceptual centre of society. Finally, developing from these observations (and mixing metaphors), decentring can be used, positively and normatively, to express 'de-apexing': the removal of the state from the conceptual hierarchy of state-society, and the move to a heterarchical relationship in which the roles of governors and governed are both shifting and ill-defined. The themes of 'decentring' are reflected in a changed understanding of regulation. In that changed understanding, self regulation plays a particular role both in practical policy debates and in more conceptual discussions. The role ascribed to self regulation, however, differs quite fundamentally in those debates. For some self regulation is the solution to the limits of 'centred' regulation; for others it is the challenge that has to be addressed: regulation of self regulation is the new challenge. The prescription is for governments to regulate self regulation in a 'post regulatory' way. But what conception of 'regulation' is thereby entailed? The article deconstructs the notion of 'regulation' and attempts to build an understanding of 'regulation' that can withstand 'decentring'.

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The first part of this article set out two possible models of proceduralisation. This second part of this article begins to develop one of those forms, 'thick' proceduralisation, building on but modifying Habermas's model of deliberative democracy in two important respects. First, it is argued that it is not sufficient simply to call for deliberation for there is a real likelihood that even if all deliberants can be brought together true communication will be blocked by difference; difference in the modes of discourse, the techniques of argument, language and validity claims. Discourse may therefore have to be mediated through the adoption of strategies of translation, mapping and dispute resolution. Whether regulators can or should perform such a mediating role remains however an open question. Second, it is argued that deliberative modes of policy formation and regulation are compatible with more pluralist and polyarchical arrangements than Habermas allows, and indeed that such arrangements may need to be adopted for thick proceduralisation to become operative.

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