Regulation & Governance

Chesterfield, Alexandra M.; Reader, Tom W.; Gillespie, Alex

doi: 10.1111/rego.70040pmid: N/A

In established democracies, the threat of regulatory capture—often implicated in major crises—is usually less about financial mechanisms like bribery and more about the subtle social processes of cultural capture. But how exactly is cultural capture defined, theorized, and assessed, and what are its underlying mechanisms, manifestations, and impact? This article presents a systematic review (n = 39) of cultural capture, identifying 7 descriptions and 10 mechanisms. We consolidate these into five underlying concepts (CHAIN): Closeness; Homogeneity; Avoidance; Identities; and Networks. We introduce a parsimonious definition of cultural capture: social and psychological processes that bias regulators' beliefs and behaviors, aligning them with those of the regulatees and marginalizing alternative viewpoints. A key contribution of this article is developing a set of 33 novel behavioral indicators to examine these five concepts empirically and clarify their relationship to regulatory capture. Finally, the review highlights theoretical and methodological issues to address for the field to advance.

Findeisen, Francesco; Le Galès, Patrick

doi: 10.1111/rego.70047pmid: N/A

This paper advances research on policy accumulation by analyzing its political consequences in the French housing sector. It argues that, in the context of decentralization reforms, the accumulation of policy instruments has undermined national steering capacities and intensified territorial inequalities. Decentralization accelerated accumulation by decoupling policy formulation from the costs and administrative responsibilities of implementation, shifting these burdens onto subnational governments. The resulting proliferation of instruments politicized implementation, as local authorities confronted capacity‐driven trade‐offs between adhering to national directives and pursuing local policies, while simultaneously gaining opportunities to innovate and build coalitions with non‐state actors. Consequenty, local governments in economically dynamic areas could strategically leverage policy accumulation to advance their interests, whereas those in less affluent regions faced administrative overload. By adopting an institutional perspective on policy instruments, this paper shows how accumulation research can foreground the political consequences of accumulation, which increasingly shape the problem‐solving capacities and legitimacy of modern states.

Neimanns, Erik; Bremer, Björn

doi: 10.1111/rego.70037pmid: N/A

Governments in many of the advanced economies expanded childcare, an exemplary social investment policy, in recent years. Yet, considerable regional variation exists in expansion efforts, and often the supply of childcare still does not match demand. We explore the politics of this regional variation by studying Germany, a country that recently introduced a legal entitlement to childcare. Despite this legal entitlement, we argue that local political and economic factors (continue to) matter for childcare expansion and regional variation in coverage. We expect left‐wing local political majorities to be associated with higher expansion and coverage rates. At the same time, tight local fiscal constraints should limit partisan room for maneuver and should slow down expansion. Analyzing local‐level data on childcare coverage rates, socioeconomic context factors, and government partisanship, we find evidence of conditional effects between fiscal and partisan variables. We furthermore examine how local governments reconcile gaps in childcare provision with the legal entitlement and what distributive consequences this has.

Braun, Benjamin; Düsterhöft, Maximilian

doi: 10.1111/rego.70052pmid: N/A

In contrast to the “quiet” politics of the pre‐2008 period, macroeconomic policy has become “noisy”. This break raises a question: How do independent agencies designed for quiet politics react when a contentious public turns the volume up on them? Central banks provide an interesting case because while they are self‐professed adherents to communicative transparency, individual case studies have documented their use of strategic silence as a defense mechanism against politicization. This paper provides a quantitative test of the theory that when faced with public contention on core monetary policy issues, central banks are likely to opt for strategic silence. We focus on the most contested of central bank policies: large‐scale asset purchase programs or “quantitative easing” (QE). We examine four topics associated with particularly contested side effects of QE: house prices, exchange rates, corporate debt, and climate change. We hypothesize that an active QE program makes a central bank less likely to address these topics in public. We further expect that the strength—and, in the case of the exchange rate, the direction—of this effect varies depending on the precise composition of asset purchases and on countries' growth models. Using panel regression analysis on a dataset of more than 11,000 speeches by 18 central banks, we find that as a group, central banks conducting QE programs exhibited strategic silence on house prices, exchange rates, and climate change. We also find support for three out of four country‐specific hypotheses. These results point to significant technocratic agency in the de‐ and re‐politicization of policy issues.

Vatanparast, Roxana

doi: 10.1111/rego.70043pmid: N/A

Alford, Matthew; Nair, Reena; Visser, Margareet; Ponte, Stefano; Chisoro, Shingie

doi: 10.1111/rego.70038pmid: N/A

A recent raft of due diligence regulation (DDR) addressing social and environmental conditions in global value chains (GVCs) has spread across the UK and Europe. An emerging literature on DDR highlights the politics of its formation. Yet, we know little about how existing sustainability governance along GVCs interacts with DDR or the wider structural context in which DDR is implemented. Empirically, we examine European DDR relevant to the South African wine sector before analyzing the sustainability requirements set by the state monopoly wine buyer in Sweden to assess the likely future impacts of DDR. We ask: How do existing sustainability governance initiatives shape the intended effects of due diligence in the South African wine value chain? We find that DDR tackles the symptoms as opposed to the root cause of predatory purchasing practices as a key impediment to improving sustainability outcomes. Finally, we suggest how to address these shortcomings.

Beetsma, R.; Nicoli, F.

doi: 10.1111/rego.70045pmid: N/A

During and following the Covid‐19 pandemic, the European Union (EU) is taking first steps toward a European Health Union (EHU). There is no set definition of what an EHU is, but in this paper, we explore the popular support for different designs of an EHU, including a pillar in which healthcare policy competences are shared between the EU and national governments, a risk‐sharing, and a redistributive pillar among countries. The analysis draws on two conjoint experiments in which respondents are presented with policy packages, as well as on a follow‐up survey on political attitudes. One of the experiments focuses on a central fiscal capacity that provides financial help to countries hit by adverse shocks, including financing of national healthcare spending, while the second focuses on joint procurement of medical countermeasures. The surveys were fielded in five EU countries at the end of March/beginning of April 2020, in July 2020, and in November 2022. Our findings are the following: there is support for all three pillars of an EHU, which moreover rises with trust in the EU; respondents tend to prefer a health‐related fiscal capacity to other forms of EU fiscal capacity; direct experience with serious Covid‐19 infection raises both trust in the EU and support for the EU sharing in social policy competences; and more trust has a larger positive effect on support for an EHU for those without serious Covid‐19 experience than for those with. These findings suggest that to promote further EU integration, the European Commission may want to develop strategies to bolster trust in the EU.

Jordana, Jacint; Triviño‐Salazar, Juan Carlos

doi: 10.1111/rego.70053pmid: N/A

Trustable environments are highly appreciated for regulatory performance, but difficult to emerge. A condition for making trust work is to accept vulnerability, and this holds both for stakeholders and agencies in public governance. Trust‐related vulnerability can be understood as a dynamic perception of potential harm derived from entering into a desired interaction. While stakeholders increased vulnerability due to voluntary exchanges with public bodies has been widely documented, the conditions under which agencies voluntarily increase their vulnerability remain less explored. Focusing on independent regulatory agencies (IRAs), this paper introduces a conceptual framework where agency vulnerability serves as a strategic tool to enhance IRAs' accountability, ultimately supporting these goals. We argue that IRAs intentionally incorporate vulnerability to make accountability efforts more credible, fostering stakeholder trust and facilitating operations. To achieve this, IRAs disclose sensitive information through accountability mechanisms, including transparency and participation initiatives. While this exposes them to criticism, penalization, or termination, it also strengthens stakeholder support and regulatory effectiveness. However, to manage risks, vulnerability is often selectively applied, prioritizing preferred stakeholders. We empirically apply this framework on Spanish data protection, finance, and food safety regulators. Our findings suggest that while vulnerability increases risks by enabling potential harm to IRAs, it ultimately mitigates accountability challenges and enhances trust among selected stakeholders, making accountability relationships more credible.

Duin, Sanne R.; Dekker, Henri C.; Mendoza, Juan P.; Wielhouwer, Jacco L.

doi: 10.1111/rego.70034pmid: N/A

In various regulatory settings, firms receive feedback (i.e., firm‐specific private advice) from authorities on how to improve compliance. Although the literature sheds light on the authorities' decision of when to provide feedback, less is known about firms' decisions on how to respond. Building on research on compliance and regulation, we expect a higher level of responsiveness to feedback when the financial capacity to cover short‐term costs is higher (as this allows firms to allocate resources for compliance in the current period) and when firms expect higher revenues for the upcoming period (as current non‐compliance represents the risk of a larger future loss). We also expect a conditional association: having a limited financial capacity may truncate the effect of positive expectations (inability to respond), and negative expectations may truncate the effect of having a sufficient financial capacity (lack of incentive to respond). To test these hypotheses, we examine anonymized financial and regulation‐related data of over 5500 financial intermediaries operating in the Netherlands during 2009 and 2010. The results of a series of tests indicate that the effects of financial capacity and revenue expectations are indeed distinct yet independent. Interestingly, responding to feedback depends on positive expectations, even when firms have a limited current financial capacity to respond.

Nawaz, Samar Abbas

doi: 10.1111/rego.70046pmid: N/A

The European Union (EU) is making regulatory efforts to allow for the safe integration of drones into civilian airspace through automated means. Commission Implementing Regulation (EU) 2021/664 concerning unmanned traffic management (a system referred to as “U‐Space”) furthers that commitment. Accordingly, drone operators must avail themselves of automatic traffic‐related “U‐Space services” concerning flight authorization, geo awareness, traffic information, and network identification before entering U‐Space airspace. Using infrastructural analysis, as proposed within Science and Technology Studies (STS), this article shows that while automation is meant to ensure safe traffic, it could also challenge U‐Space safety in at least three ways: by inviting reliability concerns for U‐Space infrastructure; because of the transition from human‐centric to automation‐centric systems; and by being subject to irregularities within the EU's framework. An infrastructural analysis, therefore, helps in unveiling important factors which influence the safety of automated technologies and in critically discussing the role of law in their regulation.