Driving Priorities in Risk‐based Regulation: What's the Problem?

Date01 December 2016
AuthorJulia Black,Robert Baldwin
Published date01 December 2016
DOIhttp://doi.org/10.1111/jols.12003
JOURNAL OF LAW AND SOCIETY
VOLUME 43, NUMBER 4, DECEMBER 2016
ISSN: 0263-323X, pp. 565±95
Driving Priorities in Risk-based Regulation:
What's the Problem?
Robert Baldwin* and Julia Black*
Both risk-based and problem-centred regulatory techniques emphasize
giving priority to matters that are serious and important. In the case of
both risks and problems, however, issues of identification, selection,
and prioritization involve inescapably normative and political choices.
It is important, therefore, to understand why regulators target the risks
and problems that they do; which factors drive such choices; and how
regulation is affected when these factors pull in similar or opposite
directions. Such an understanding provides a fresh framework for
thinking about the challenges of both risk-based and problem-centred
regulation. The analysis presented here does not oppose either risk-
based or problem-centred regulation, but it illustrates why neither is as
straightforward as simple calls for `better regulation' may suggest, and
it proposes ways in which key aspects of those challenges may be
addressed.
Risk-based regulation has been a central tenet of the United Kingdom
government's `better regulation' agenda since the Hampton review in 2005,
and it is a key element of the better regulation agenda of the OECD and
many of its member states.
1
The core proposal of risk-based regulation is
that regulators, in principle, should focus their efforts on the most serious
risks that they face in achieving their objectives. This risk-based approach to
565
*Law Department, London School of Economics and Political Science,
Houghton Street, London WC2A2AE, England
R.Baldwin@lse.ac.uk J.Black@lse.ac.uk
The authors are grateful for the help of interviewed staff of the Scottish Environmental
Protection Agency and the JLS referees.
1 P. Hampton, Reducing Administrative Burdens: Effective Inspection and Enforce-
ment (2005); OECD, Recommendation on Regulatory Policy and Governance
(2012).
ß2016 The Author. Journal of Law and Society ß2016 Cardiff University Law School
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use,
distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes.
regulation runs parallel to Malcolm Sparrow's exhortation that regulators
should `pick important problems and fix them'.
2
The key proposition in both risk-based and problem-centred regulatory
techniques is thus simple enough: prioritize the matters that are serious and
important. Many regulators, however, have implemented risk-based regula-
tion in the last ten to fifteen years and their experiences have highlighted
some signifi cant challe nges, not leas t concerning t he selection a nd
prioritization of risks. What constitutes a risk or a problem can be contested,
and perceptions and evaluations can vary considerably.
Identifying the `important' risks and problems is not as straightforward as
it sounds. Risks and problems are also quite distinct. Risks are adverse events
that may occur in the future. Problems are things that have happened or are
happening or may happen and which require attention. In the case of both
risks and problem s, however, issue s of identificati on, selection, an d
prioritization involve inescapably normative and political choices. It is
important, therefore, to understand why regulators target the risks and
problems that they do; which factors influence such choices; and how
regulation is affected when these factors pull in similar or opposite directions.
This article explores the fa ctors that drive the identifi cation and
prioritization of risks and problems, how those factors can interact, and
the effects of such interactions. A `driver' of risk or problem identification is
thus seen here as a factor that shapes the construction of a risk or problem
and/or which impacts on the prioritization of that risk or problem. In
examining such drivers, the discussion below draws on existing primary and
secondary literature on risk-based regulation (and risk identification more
generally) and on interviews with regulators.
3
It commences by setting the
elements of risk-based regulation alongside those of Sparrow's `problem-
centred' approach, then turns to examine t he factors that drive the
identification of risks and problems. We argue that when regulators attempt
to identify and prioritize issues for attention, they are influenced by three
main sets of factors, which can mutually reinforce or operate in tension: the
way they tend to think about risks or problems (their theoretical or
ideological perspectives); operational constraints (especially the resources
they have available); and political, communicative or reputational factors,
stemming from their need to maintain their reputation and legitimacy in the
eyes of their political overseers and the public at large.
We contend that an exploration of the interplay between these drivers of
risk/problem identification provides a fresh framework for thinking about the
566
2 M. Sparrow, The Regulatory Craft (2000); M. Sparrow, The Character of Harms
(2008) 5.
3 Conducted primarily in the United Kingdom over the last decade with a focus on the
development and implementation of regulators' risk-based frameworks, including
semi-structured interviews with officials at the Scottish Environmental Protection
Agency in 2013.
ß2016 The Author. Journal of Law and Society ß2016 Cardiff University Law School

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