Regulatory Capitalism, Accountability and Democracy

Colin Scott

Introduction

Discussions of accountability in contemporary public life are commonly tied to notions of public power and democratic governance. A core narrative might suggest that public power is attributed to elected governments and legitimated, periodically, through elections. Within such a democratic system the accountability mechanism par excellence is the election in which politicians can be removed from or given power. From such a core narrative, a number of concerns flow. First, if we believe that elected governments find favour because of their election promises then we might expect parliaments to hold governments to account for keeping their promises. Second, notwithstanding the fact of elections, we might hold that certain meta norms, often enshrined in constitutional documents, are not capable of being changed within ordinary political and legislative processes, and seek to ensure that governments are held to account for complying with such norms, both through judicial review and other review mechanisms, for example through parliamentary scrutiny and bureaucratic oversight. Third, if the core source of legitimate public power is through democratic processes of election, we should be concerned that when public power is delegated by the political principals, for example through legislation, then the agents should be monitored and held to account for keeping within the legitimate scope of delegation.

The invitation to contribute to this volume enables me to revisit the themes of an article I published in 2000 (Scott 2000) in light of the growth in the literature on accountability and regulation, changing practices of regulatory governance, and shifting concerns - and in particular an interest in better understanding the democratic credentials of regulatory accountability. A central focus of that 2000 article, 'Accountability in the Regulatory State', was on the problem of delegation and how mechanisms of oversight had adapted to extensive delegation, in particular to regulatory agencies. I noted that in the UK the traditional mechanisms of 'upwards accountability' - parliament and courts - were increasingly being supplemented by 'horizontal accountability' to agencies such as the National Audit Office (the supreme audit institution for central government in England and Wales) and the Parliamentary Ombudsman (who handles grievances about central government departments and agencies generally) and even 'downwards accountability' to users through market-like mechanisms that provided both the possibility of compensation but also of exit to another provider in the event that public services were poorly delivered (Scott 2000: p. 42).

But already, at that time, I sensed there was something inadequate about tying accountability to delegation and noted the emergence of relationships of interdependence, often characterized by overlap, redundancy and network characteristics rather than linear properties (Scott 2000: pp. 49-55). Fourteen years on there is an increased challenge to orthodox narratives on accountability of regulation, tied as they are to traditional ideas of representative democracy, although those narratives are much more developed. The growth in regulation extends beyond the establishment in many jurisdictions of regulatory agencies to recognize and embrace the growth of private and supranational regulatory practices, displacing the concept of the regulatory state with 'regulatory capitalism' (Braithwaite 2008; Levi-Faur 2005). This trend creates a further challenge to democratic accounts of regulatory accountability because private and supranational regulatory actors are typically located further from elected politicians and, equally significantly, do not generally fall under the requirements of traditional accountability regimes for public sector actors to whom power has been delegated (Lindseth 2004).

So, contemporary regulatory capitalism, in this more diffuse form, embraces public and private actors, and a wide range of mechanisms ranging from command and control through community and market modes, and even nudges and other design techniques. In this chapter I argue that while these trends may be perceived as a problem for democratic accountability, as traditionally conceived, they also have the potential to make significant contributions to enhancing democratic governance. This argument is dependent on supplementing representative models of democracy with other ways of conceiving of democratic governance that go beyond the representative model, and offer ways to reconnect constituencies affected by regulation both to regulatees and to those exercising regulatory power.

I argue that many actors and mechanisms linked to regulation are capable of supplementing traditional modes of public accountability: by making regulation more transparent (for example, by publishing data and/or comparing performance or outcomes); by increasing inclusiveness and opportunities for participation in some or all aspects of regulation (for example, securing a wider range of views about the appropriate standards or rules so as to learn more about both problems and potential solutions); by engaging those affected by a regime in monitoring for non-compliance; by empowering a wider range of actors to enforce the standards in some manner. In developing this argument I draw on the ideas of John Keane for how post-representative governance might evolve into what he refers to as 'monitory democracy' (Keane 2009). This approach, when applied to regulation, invites us to evaluate regulatory regimes not simply with regard to their technical capacity, but also by reference to the extent to which they enhance or reduce representativeness in their processes. The setting and enforcement of norms within bilateral contracts, witnessed only by the parties, even where they have significant third-party effects, tends to reduce representativeness and, against these criteria, offers a poor alternative to traditional public regulation. Conversely, a regime in which industry and civil society actors are able to secure participation of a wide range of actors affected by a regime in setting, reviewing, monitoring and perhaps even enforcing, may be viewed very positively. The democratic challenge of regulatory accountability can therefore be defined as finding combinations of actors and processes that tend to be enhancing of representativeness, seeking to increase the participation in regimes that are weak against the criteria, and perhaps acknowledging the need to sustain traditional public regulatory regimes where, against these criteria, their processes offer a better alternative.

 
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