The strengths and weaknesses of self regulation

The strengths and weaknesses of
self regulation
Dr Jon Bell
Formerly Chief Executive
UK Food Standards Agency
The case for and against command
and control regulation (1)
• Define required behaviour
• Set standards
• Clearly set out offences and penalties
The case for and against command
and control regulation (2)
• Blunt instrument
• Can be costly and act as a brake on innovation
• Always follows new activities, never precedes
• Only sets minimum standards
Aims of self regulation
• Ensure a properly functioning market
• Ensure a responsible industry
• Ensure a commitment to published standards
• Effective action in the event of a breach
• Easy and low cost to administer
• Responsive to change
Advantages and disadvantages
• Possible advantages:
Driven by those being regulated
Embeds responsibility for compliance
Low cost
Advantages and disadvantages
• Possible disadvantages
Conflicts of interest
Lack of confidence in the process
Weak sanctions
Lack of transparency
Narrowness of interpretation of the rules
Drivers (1)
• Industry:
Threat of command and control regulation
Name and shame by the authorities
Desire to raise standards and confidence
Desire to prevent damage by rogue operators
Drivers (2)
• Government:
Desire to keep costs down
Enables minimal government interference
Maximises flexibility
Strengthens corporate responsibility
Suitability for different sectors
• Required standards of behaviour are well understood
• No risk of serious or widespread harm
• Industry cohesiveness and maturity
• Competitive market
Ways of avoiding or reducing the
disadvantages (1)
• Involve outside parties
• External policing
• External auditing
Ways of avoiding or reducing
disadvantages (2)
• Clear and transparent rules
• Allow group action by consumer bodies
• Clear appeals procedures
Examples of sectors in the UK
which have tried self regulation
• Successfully
– Advertising
– The medical profession
– The press
• Unsuccessfully
– The police
– Lawyers
– Gas safety
Perceptions about self regulation
• The public
• Politicians
• Industry
Issues requiring particular
Expertise and background of independants
Speed of response
Appeals system
Mandatory participation?
• Workable alternative to command and control
regulations in appropriate circumstances
• Not suitable for all sectors
• Perceptions are all important