pollution control, occupational health and safety, and financial services have a
deserved reputation for informality and flexibility in their implementation (Kagan
2000 ; but cf. Schaede 2000 ).
Taking one example of regulatory reform, it is easy to represent privatization as
a withdrawal of the state from determining key issues of public service provision
through transfer of ownership into private hands. But in many cases the central
state exerted little control over public enterprises, which were frequently free to
develop and execute their own policies. Policies of privatization pursued diverse
motivations for governments. The UK government stumbled upon a policy which
was initially ‘‘pragmatic’’ (and largely concerned with reducing debt) but became
‘‘systemic’’ in the sense of promoting a long-term shift in the balance of power
from government to the private sector (Feigenbaum et al. 1999 , 54 ). A central
paradox of privatization is that where the policy has been accompanied by the
creation of new regulatory apparatus, as with the utilities sectors in most coun-
tries, government may have more information about, and greater practical cap-
acity for control over, privatized enterprises than it did over their public
predecessors (Majone 1994 a). Thus, Vogel’s comparative study of regulatory
reform found that privatization and liberalization processes in both Japan and
France exhibited tendencies for central government to attempt reinforcement of
its capacity for control over the applicable sectors (Vogel 1996 , 257 ). This finding,
and the contrast it provides with the disengagement strategies of the United
States and (controversially) the United Kingdom, suggests that ‘‘the evidence
does in fact contradict the popular wisdom that the overwhelming power of
international markets has forced national regulators in a common direction’’
(Vogel 1996 , 261 – 2 ).
The choice of institutional form for regulation over privatized industries has
been a major public policy question. The general arguments in favor of independ-
ent regulatory agencies (IRAs) include the following: they reduce the capacity for
dominant firms to exploit their de facto regulatory capacities to inhibit or reduce
competition, a major factor behind the EU legislative policy which requires
separation of regulation and operation of services in the telecoms, postal, and
energy sectors; they tend to insulate regulatory decision making to some extent
from the agendas of elected politicians. The rise of such ‘‘non-majoritarian’’
institutions for regulation has been a central theme of contemporary public policy
approaches to regulation, offering as they do for some, a superior form of
economic government for addressing highly complex issues in domains such as
utilities regulation, financial services, and biotechnology (Majone and Everson
2001 ; Thatcher and Sweet 2002 ). Less attention has been paid to alternative
organizational choices, such as the use of government departments or courts as
regulators. Contemporary discussions of self-regulation, and in particular of co-
regulation, suggest greater attention is now being paid to the question as to how
the self-regulatory capacity of industry can be harnessed for public regulatory
purposes (Steinberg 2001 ).
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