Private Regulation of the Public Sector: A Neglected Facet of Contemporary Governance

Published date01 March 2002
Date01 March 2002
DOIhttp://doi.org/10.1111/1467-6478.00211
JOURNAL OF LAW AND SOCIETY
VOLUME 29, NUMBER 1, MARCH 2002
ISSN: 0263-323X, pp. 56–76
Private Regulation of the Public Sector: A Neglected Facet
of Contemporary Governance
Colin Scott*
The centrality of regulation among the tools deployed by governments
is well established in the social science literature. Regulation of public
sector bodies by non-state organizations is an important but neglected
aspect of contemporary governance arrangements. Some private
regulators derive both authority and power from a legal mandate for
their activities. Statutory powers are exercised by private regulators
where they are delegated or contracted out. Contractual powers take
collective (for example, self-regulatory) and individuated forms. But a
further important group of private regulators, operating both nationally
and internationally, lack a legal mandate and yet have the capacity to
exercise considerable power in constraining governments and public
agencies. In a number of cases private regulators operate more
complete regulatory regimes (in the sense of controlling standard
setting, monitoring, and enforcement elements) than is true of public
regulators. While private regulators may enhance the scrutiny given to
public bodies (and thus enhance regimes of control and accountability),
their existence suggests a need to identify the conditions under which
such private power is legitimately held and used. One such condition is
the existence of appropriate mechanisms for controlling or checking
power. Such controls may take the classic form of public oversight, but
may equally be identified in the checks exercised by participation in
communities or markets.
56
ßBlackwell Publishers Ltd 2002, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA
*Centre for the Analysis of Risk and Regulation, London School of
Economics and Political Science and Law Program, Research School of
Social Sciences, Australian National University, Canberra, ACT 0200
Australia
I am grateful to participants at the joint Law and Society Association and Research
Committee for the Sociology of Law annual meeting, Budapest, July 2001 and to Peter
Cane, Sacha Courville, Christopher Hood, Peter Grabosky, Robert Kaye, Martin Lodge,
Janet McLean, and Imelda Maher for comments on an earlier draft.
INTRODUCTION
Regulation has become the modality of choice for state activity in recent years,
prompting claims that we live in the age of the ‘regulatory state’.
1
These claims
are based largely on the observation of the centrality of government regulation
of business to modern governance arrangements and the displacement of
governance modes associated with the welfare state such as public ownership,
direct provision, and integrated bureaucracies for policy making and
operational tasks. More recently the growth industry in the regulation of
public sector bodies by other parts of government has been identified, mapped,
and analysed.
2
This article provides an analytical framework for understanding
a further, related trend, towards systematic oversight of government (akin to
regulation) carried out by private (that is, non-state or non-governmental)
actors. The role of private organizations – and in particular firms and NGOs –
in modern governance has long been recognized, in particular in the public
policy literature on networks.
3
However this literature has largely focused on
policy making rather than implementation.
4
The literature on regulatory
enforcement has analysed the interdependence of the private and public sectors
in the implementation process.
5
However, systematic oversight by the private
sector of public sector policy implementation has been substantially neglected
both by public policy analysts and regulatory scholars and represents a
significant lacuna in the literature.
6
Private regulation of the public sector is far from new. A variety of private
families and companies have exercised controls over particular states at
various times since the inception of the nation state.
7
More recently both
firms and interest groups have exercised something akin to systematic
57
1 J. Braithwaite, ‘The New Regulatory State and the Transformation of Criminology’
(2000) 40 Brit J. of Crim. 222 and references cited therein.
2 C. Hood et al., Regulation Inside Government: Waste-Watchers, Quality Police, and
Sleaze-Busters (1999).
3 D. Marsh and R.A.W. Rhodes, Policy Networks in British Politics (1992).
4 An exception is provided by P. Grabosky, ‘Using Non-Govemmental Resources to
Foster Regulatory Compliance’ (1995) 8 Governance 527.
5
For example, B. Hutter, Compliance (1997); P. Grabosky and J. Braithwaite, Of
Manners Gentle (1986); J. Freeman, ‘The private role in public governance’ (2000) 75
New York – University Law Rev. 543.; C. Hall et al., Telecommunications Regulation.
Culture, Chaos and Interdependence Inside the Regulatory Process (2000).
6 For example there is no discussion of private regulation over government in H.
Aquina and H. Bekke, ‘Governance in Interaction: Public Tasks and Private
Organizations’ in Modern Govemance: New Government-Society Interactions, ed. J.
Kooiman (1992) or in other essays in that influential collection. Private regulation
over government is also neglected in K. Ronit and V. Schneider, ‘Global Governance
Through Private Organizations’ (1999) 12 Governance 243. The potential for private
oversight of government illegality is discussed by P. Grabosky, ‘Concluding
Observations on Public Sector Illegality and Its Control’ in Government Illegality,
ed. P. Grabosky (1987).
7 J. Braithwaite and P. Drahos, Global Business Regulation (2000) 27.
ßBlackwell Publishers Ltd 2002

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