Regulation

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Lua error in package.lua at line 80: module 'strict' not found. A regulation is a legal norm intended to shape conduct that is a by-product of imperfection.[1] A regulation may be used to prescribe or proscribe conduct ("command-and-control" regulation), to calibrate incentives ("incentive" regulation), or to change preferences ("preferences shaping" regulation").[2] In statist mechanisms it can also be extended to monitoring and enforcement of rules as established by primary and/or delegated legislation. In this form, it is generally a written instrument containing rules having the force of statist law (as opposed to natural law). Other forms of regulation are self regulation. In general, regulations are written by executive agencies as a way to enforce laws passed by the legislature. Because of the actual or potential interference in choices, the idea of regulation and most issues related to regulation tend to be in controversy.[3]

Regulation creates, limits, constrains a right, creates or limits a duty, or allocates a responsibility. Regulation can take many forms: legal restrictions promulgated by a government authority, contractual obligations that bind many parties (for example, "insurance regulations" that arise out of contracts between insurers or reinsurers and their insureds),[4] self-regulation by an industry such as through a trade association, social regulation (e.g. norms), co-regulation, third-party regulation, certification, accreditation or market regulation. In its legal sense regulation can and should be distinguished from primary legislation (by Parliament of elected legislative body) on the one hand and judge-made law on the other.[5]

Regulation mandated by a state attempts to produce outcomes which might not otherwise occur, produce or prevent outcomes in different places to what might otherwise occur, or produce or prevent outcomes in different timescales than would otherwise occur. In this way, regulations can be seen as implementation artifacts of policy statements. Common examples of regulation include controls on market entries, prices, wages, development approvals, pollution effects, employment for certain people in certain industries, standards of production for certain goods, the military forces and services. The economics of imposing or removing regulations relating to markets is analysed in regulatory economics.

Reasons

Lua error in package.lua at line 80: module 'strict' not found. Regulations may create costs as well as benefits and may produce unintended reactivity effects, such as defensive practice.[6] Efficient regulations can be defined as those where total benefits exceed total costs.

Regulations can be advocated for a variety of reasons, including:[citation needed]

  • Market failures - regulation due to inefficiency. Intervention due to what economists call market failure.
    • To constrain sellers' options in markets characterized by monopoly
    • As a means to implement collective action, in order to provide public goods
    • To assure adequate information in the market
    • To mitigate undesirable externalities
  • Collective desires - regulation about collective desires or considered judgments on the part of a significant segment of society[vague]
  • Diverse experiences - regulation with a view of eliminating or enhancing opportunities for the formation of diverse preferences and beliefs[vague]
  • Social subordination - regulation aimed to increase or reduce social subordination of various social groups[citation needed]
  • Endogenous preferences - regulation intended to affect the development of certain preferences on an aggregate level[vague]
  • Irreversibility - regulation that deals with the problem of irreversibility – the problem in which a certain type of conduct from current generations results in outcomes from which future generations may not recover from at all.[7]
  • Professional conduct - the regulation of members of professional bodies, either acting under statutory or contractual powers.[8]
  • Interest group transfers - regulation that results from efforts by self-interest groups to redistribute wealth in their favor, which may be disguised as one or more of the justifications above.

The study of formal (legal and/or official) and informal (extra-legal and/or unofficial) regulation constitutes one of the central concerns of the sociology of law.

History

Regulation of businesses existed in the ancient early Egyptian, Indian, Greek, and Roman civilizations. Standardized weights and measures existed to an extent in the ancient world, and gold may have operated to some degree as an international currency. In China, a national currency system existed and paper currency was invented. Sophisticated law existed in Ancient Rome. In the European Early Middle Ages, law and standardization declined with the Roman Empire, but regulation existed in the form of norms, customs, and privileges; this regulation was aided by the unified Christian identity and a sense of honor in regard to contracts.[9]:5

Beginning in the late 19th and 20th century, much of regulation in the United States was administered and enforced by regulatory agencies which produced their own administrative law and procedures under the authority of statutes. Legislators created these agencies to allow experts in the industry to focus their attention on the issue. At the federal level, one of the earliest institutions was the Interstate Commerce Commission which had its roots in earlier state-based regulatory commissions and agencies. Later agencies include the Federal Trade Commission, Securities and Exchange Commission, Civil Aeronautics Board, and various other institutions. These institutions vary from industry to industry and at the federal and state level. Individual agencies do not necessarily have clear life-cycles or patterns of behavior, and they are influenced heavily by their leadership and staff as well as the organic law creating the agency. In the 1930s, lawmakers believed that unregulated business often led to injustice and inefficiency; in the 1960s and 1970s, concern shifted to regulatory capture, which led to extremely detailed laws creating the United States Environmental Protection Agency and Occupational Safety and Health Administration.

See also

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References

  1. Orbach, Barak, What Is Regulation? 30 Yale Journal on Regulation Online 1 (2012)
  2. Id.
  3. Orbach (2012)
  4. Marcos Antonio Mendoza, "Reinsurance as Governance: Governmental Risk Management Pools as a Case Study in the Governance Role Played by Reinsurance Institutions", 21 Conn. Ins. L.J. 53, (2014) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2573253
  5. Levi-Faur, David, Regulation and Regulatory Governance, Jerusalem Papers in Regulation and Governance, No.1, 2010
  6. Lua error in package.lua at line 80: module 'strict' not found.
  7. Biel,R. and Mu-Jeong Kho (2009)Lua error in package.lua at line 80: module 'strict' not found.
  8. Lua error in package.lua at line 80: module 'strict' not found.
  9. John Braithwaite, Péter Drahos. (2000). Global Business Regulation. Cambridge University Press.

External links

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