Social Regulation
By: David A. Strauss
As presented by Lester M. Salamon
Introduction

Issue: Social Regulation has a diverse set of
elements.

Social Regulation is an indirect tool of government
Eugene Bardach

“Social regulation is correcting failures of the
legal system- mainly liability and tort law- to
prevent harms or to promote positive ends.
These in turn arise from failures in the market.”
Defining “The” Tool

Clarifying the difference between Social and
Economic Regulation.
Economic: Financial Market Regulation; FTC
Regulations; Federal Reserve System.
 Social: Welfare; Public Safety; Medicaid.
 Both types of regulation are often blurred.

Defining “The” Tool

Four (4) Elements of Social Regulation:
Rule that govern expected behavior.
 Standards that serve as benchmarks.
 Sanctions for non-compliance.
 Administrative apparatus that enforces rules and
administers sanctions.

Defining “The” Tool

Rules vs. Regulations:
Rules: Substantive Rules vs. Procedural Rules
 Regulations: Ex Ante regulation vs. Ex Post
Regulation.

Patterns of Tool Use

A Brief History:
Babylonian Building Code
 Plymouth Colony Roofing Code (c1626)
 Fire Codes of London (c1666)
 American Meat Inspection Act (c1907)

Patterns of Tool Use

United States Regulatory System has:
A FORMAL SYSTEM for development.
 A FORMAL and LEGAL style of enforcement

Patterns of Tool Use

Modern trend of regulation is toward marketorientated systems.
Started with the Reagan Administration
 Continued, to an extent, with the Clinton
Administration.
 Modern developments include market-like
mechanisms; emission and pollution trading systems;
and negotiated rulemaking.

Basic Mechanics


“Rules are the path on which Social Regulation
follows.”
Social Regulation involves:
Est. of Rules
 Development of Standards
 Est. of penalties and rewards
 Design & implementation of enforcement systems

Basic Mechanics

Rules:
Good rules are defined with respect to their
legitimacy, fairness, & predictability.
 Rulemaking process set forth in Administrative
Procedure Act of 1946.

Basic Mechanics

Standards: Setting Benchmarks

Rules are sufficiently complex that they require
specification of standards for performance.
Approach and consideration of technical issues
 Legal issues
 Economic issues

Basic Mechanics

Penalties & Rewards:
Compliance Rates
 Factoring Cost of Compliance into Cost of Doing
Business

Basic Mechanics

Enforcement Systems
Complaint-Based Systems
 HACCP Inspection System
 Flexibility vs. Coercion

One MAJOR Point

Regulatees (Targeted Group) vs. Beneficiaries
Management Challenges




Reducing Conflicts
Inconsistent Implementation
Inadequate Resources
Fostering Intergovernmental Partnerships