Power and Regulation in Britain
| Date | 01 December 1999 |
| Published date | 01 December 1999 |
| Author | Joel D. Wolfe |
| DOI | 10.1111/1467-9248.00236 |
| Subject Matter | Article |
Power and Regulation in Britain
JOEL D. WOLFE
University of Cincinnati
With the sell-o of the nationalized utilities, regulation became central to the way
Britain is governed. The withdrawal of state ownership and provision, however,
challenges agency models of state power, which suggest that state capacity increases
only with increased resources. This paper suggests that distinguishing between direct
and indirect power explains how diminishing state intervention can enhance state
control. After reconceptualizing regulation in terms of these two media of power,the
paper examines British utility regulations asthe operations and eects of marketizing
delegation. It shows how market processes operate as a medium of indirect control,
permitting the core state to hold direct power in reserve and enhancing overall state
power.
Following the sell-o of major utilities in Britain, regulation became one of the
most prominent features of the privatization programme. Yet, regulation
receives little attention among studies explaining the Thatcherite programme in
Britain.1Typically, explanations of Thatcherism give priority to reforms rather
than their eect on state power. Reasons cited for Thatcherite successes include
the weakness of public opinion,2the autonomy of cabinet government,3the
potency of the Thatcher personality,4recon®gured political pressures,5the
in¯uence of liberal economic ideas,6the pursuit of self-interest,7the agency of
institutions,8and imperatives of the capitalist system.9Each of these
#Political Studies Association 1999. Published by Blackwell Publishers, 108 CowleyRoad, Oxford OX4 1JF, UK and 350 Main
Street, Malden, MA 02148, USA.
Political Studies (1999), XLVII, 890±905
1Marsh emphasizes the need to examine dierent policy areas. D. Marsh, `Explaining
``Thatcherite''policies: beyond uni-dimensional explanation', Political Studies, 43, 4 (1995), 595±613.
2I. Crewe and D. Searing, `Ideological change in the British Conservative Party', American
Political Science Review, 82, 2 (1988), 361±84; I. McAllister and D. Studlar, `Popular versus elite
views of privatization: the case of Britain', Journal of Public Policy, 9 (1989), 157±78.
3P. Norton, The British Polity (New York, Longman, 3rd edn, 1994), pp. 187 ±8.
4D. Kavanagh, Thatcherism and British Politics (Oxford, Oxford University Press, 2nd edn,
1990); J. Moon, Innovative Leadership in Democracy: Policy Change under Thatcher (Aldershot,
Dartmouth, 1993).
5J. J. Richardson, W. Maloney, and W. Rudig, `The dynamics of policy change: lobbying and
water privatization', Public Administration, 70 (Summer 1992), 157±75; D. Marsh and R. Rhodes,
`Implementing Thatcherism: policy change in the 1980s', Parliamentary Aairs, 45, 1 (1992), 33±49.
6C. Veljanovski, Selling the State: Privatisation in Britain (London, Weidenfeld and Nicolson,
1987).
7P. Dunleavy, `Explaining the privatization boom: public choice versus radical approaches',
Public Administration, 64 (Spring 1986), 13±34; M. Dobek, `Privatization as a political priority: the
British experience', Political Studies, 41, 1 (1993), 24±40; M. Pirie, Micropolitics (Aldershot,
Wildwood House, 1988).
8P. Hall, Governing the Economy: the Politics of State Intervention in Britain and France (New
York, Oxford University Press, 1986); J. Bulpitt, `The discipline of the new democracy:
Mrs Thatcher's domestic statecraft', Political Studies, 34, 1 (1986), 19±39.
9A Gamble, The Free Economy and the Strong State (London, Macmillan, 1988).
explanations draws on a view of state power in which a particular resource
enables ocials to impose their will.
When applied to explaining how regulation changes the way Britain is
governed, the traditional models of state power pose a conundrum. By viewing
power as the ability of one agent to triumph over another, traditional models
imply that diminishing the state's role in production and administration will
reduce its capacity to control. Yet, the privatization programme, in reducing
the state's role as direct producer, provider and regulator, appears to have
enhanced the eciency of its control.10 In place of nationalized ®rms under-
mining state power there now exist global competitors oering innovative
services, better quality, and lower prices. In short, traditional models are unable
to explain how reducing state intervention increases the eciency of state
power.
This paper suggests that this puzzle can be resolved by analysing utility
regulation in terms of direct and indirect media of control. Direct power denotes
the ability to bring about eects by the overt or covert use of external might.
Indirect power refers to the eects produced by agents engaging of their own
accord in collective practices. Such self-administering systems of social control
fashion individual exertion into societal achievements. Distinguishing these
dierent types of control makes it possible to show that market processes can
function as media of indirect control strengthening the eectiveness of state
power. To develop this argument, I ®rst use the distinction between direct and
indirect power to suggest an alternative conception of regulation. Secondly, a
survey of the British system of utility regulation provides evidence supporting
this analysis.
Reconceptualizing Regulation
British regulatory reforms challenge theories of regulation to explainhow a shift
to marketized control enhances state power. Typically theories of regulation,
analysing the waysin which the state controls private sector activity in the public
interest,11 explain the inability of the state to control regulated groups. Yet, the
recent regulatory restructuring appears to succeed in asserting state priorities.
Regulated ®rms report improved internal eciency, lower prices, a wider range
of services, and increased pro®tability. This regulatory eectiveness poses
the question of how distancing the state from hands-on government control
increases the eciency of control. After showing that major theories of regula-
tion cannot account for an improvement in the eectiveness of state regulation,
this section oers the concepts of direct and indirect power as tools for
10 S. Savage, R. Atkinson and L. Robins (eds), Public Policy in Britain (New York, St Martin's
Press, 1994); P. Taylor-Gooby and R. Lawson (eds), Markets and Managers: New Issues in the
Delivery of Welfare (Buckingham, Open University Press, 1993); and J. Wolfe, Power and
Privatization: Choice and Competition in the Remaking of British Democracy (London, Macmillan,
1996). A contrary view is R. Rhodes, `The hollowing out of the state: the changing nature of the
public service in Britain', The Political Quarterly, 65, 2 (1994), 138±51 and C. Foster and F.
Plowden, The State under Stress: Can the Hollow State be Good Government? (Buckingham, Open
University Press, 1996).
11 J. Francis, The Politics of Regulation: a Comparative Perspective (Oxford, Blackwell, 1993),
p. 5; D. Swann,`The Regulatory Scene: an Overview', in K. Button and D. Swann (eds), The Age of
Regulatory Reform (Oxford, Clarendon, 1989), pp. 3 ±6.
JOEL D. WOLFE 891
#Political Studies Association, 1999
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