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Private Regulation in the New European Architecture

Prof Fabrizio Cafaggi

Date: 30 October 2007
Time
: 1:00pm - 2:30pm
Venue
: CARR Seminar Room, H615

Abstract:

Changes to administrative regulation have been driven by a lack of legitimacy and transparency and the boundaries between private and public regulation have shifted. Such a shift poses accountability challenges to private regulation, which can be solved by using different complementary systems: governance and market and state accountability.

Market accountability can be provided by ensuring a plurality of private regulators competing for regulatees. Such accountability presupposes free movement of regulatees, thus relatively low costs to enter and exit regulatory relationships and a common set of rules shared by private regulators. It also assumes that the final beneficiaries of the regulatory process (consumers and investors) may affect the choice of the regulatee.

Public accountability is ensured by devising co-regulatory arrangements whereby the public regulator or the legislator defines the regulatory framework in cooperation with the private regulator. This arrangement often provides substitution power for the public regulator in case of inaction or misfeasance.

The interplay between these mechanisms can increase the accountability of private regulators and ensure that increased powers are combined with adequate liabilities.

 

About the speaker

Professor Cafaggi is the Professor of Comparative Law at the European University Institute.  his research areas include self-regulation, comparative European law and economics.

 

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