REMEDIES AND REGULATORY STRATEGIES
THE LEVESON INQUIRY
12 OCTOBER 2011
Professor Robert Baldwin
The London School of Economics and Political Science
0
STRATEGIES AND SMART REGULATION
STATE
INDUSTRY SELFREGULATION
CORPORATION
ADVICE
ADVICE
ADVICE
EDUCATION
EDUCATION
TRAINING
SUPERVISION
PERSUASION
GUIDANCE
INCENTIVES
WARNINGS/NOTICES
WARNINGS
REVIEWS
CIVIL LAW REMEDIES
SANCTIONS
PROMOTIONS
CRIMINAL LAWS AND
SANCTIONS
DISQUALIFICATION
DISCIPLINE
DISQUALIFICATIONS
DISMISSAL
1
THE DREAM FRAMEWORK
1.
DETECTION
GAINING INFORMATION ON
UNDESIRABLE BEHAVIOUR
2.
RESPONSE
DEVELOPING TOOLS TO DEAL
WITH THE PROBLEMS
3.
ENFORCEMENT
APPLYING TOOLS ON THE GROUND
4.
ASSESSMENT
MEASURING SUCCESS OR FAILURE
5.
MODIFICATION
ADJUSTING TOOLS AND STATEGIES
2
CRIMINAL LAW APPROACHES
1.
DETECTION
CLANDESTINE OPERATIONS
REACTIVE
RESOURCES
2.
RESPONSE
CONSISTENCY
A RULE - BOUND WORLD
3.
ENFORCEMENT
MEDIA FREEDOM
A POLITICAL ISSUE?
DETERRENCE ASSUMPTIONS
4.
ASSESSMENT
OFF THE SCREEN ISSUES
5.
MODIFICATION
THE CHALLENGE OF LEGISLATIVE
CHANGE
3
CIVIL LAW APPROACHES
1.
DETECTION
RESOURCES
POWERS TO INVESTIGATE
2.
RESPONSE
EXPERTISE
3.
ENFORCEMENT
EVIDENCE
COMMITMENT
DAMAGES
UNDER-DETERRENCE
4.
ASSESSMENT
WHO ASSESSES?
5.
MODIFICATION
WHO INSTIGATES LEGAL CHANGE?
4
INDUSTRY SELF-REGULATION
1.
DETECTION
PUBLIC FAITH
POWERS TO DETECT?
2.
RESPONSE
SELF-SERVING?
3.
ENFORCEMENT
RECORDS OF SELF-REGULATORS?
WHAT DOES COMPLIANCE MEAN?
4.
ASSESSMENT
INCENTIVE TO GLOSS
5.
MODIFICATION
WHY CHANGE?
5
REGULATION WITHIN THE COMPANY
1.
DETECTION
- HIGH POTENTIAL
- HOW TO INCENTIVISE FIRMS
(ADJUST SANCTIONS?)
2.
RESPONSE
- DIFFERENT WORLD VIEWS
- TRUST IN GOODWILL / SKILL
- COUNTER INCENTIVES AND THE
REWARDS OF SIN
3.
ENFORCEMENT
- WILL SANCTIONS BE MATCHED
BY REWARDS?
- CREATIVE COMPLIANCE
- SCAPEGOATING / TOP-DOWNISM
4.
ASSESSMENT
DEFINING / MEASURING SUCCESS
5.
MODIFICATION
INCENTIVISING IMPROVEMENTS
IN BEHAVIOUR
6
WHAT ARE THE REGULATEES LIKE?
WELL-INTENTIONED
LOW CAPACITY
WELL-INTENTIONED
HIGH CAPACITY
ILL-INTENTIONED
LOW CAPACITY
ILL-INTENTIONED
HIGH CAPACITY
7
SPECIAL CHALLENGES
• VERY HIGH INCENTIVES TO ILL-INTENTION
• STRONG CULTURE AND RESISTANCE TO
‘ILLIBERAL’ REGULATION
• VERY HIGH CAPACITY
• VERY HIGH POWER TO CAPTURE AT THE
HIGHEST LEVELS
• DETECTION AND ENFORCEMENT
• OWNERSHIP AND POWER ARE THE PRIMARY
ISSUES
8
DESIGNING GOOD REGULATION
AIMING FOR THE PERFECT DESIGN
- BEST GUESSING
- HOPING IT WORKS
MODIFICATION
- SENSIBLE ADJUSTMENTS OR
- MOVING THE GOALPOSTS?
9