The Shifting Balance of Power in the Regulatory State: Structure, Strategy, and the Division of Labour

AuthorDonald Feaver,Benedict Sheehy
Publication Date01 June 2014
ISSN: 0263-323X, pp. 203±26
The Shifting Balance of Power in the Regulatory State:
Structure, Strategy, and the Division of Labour
Donald Feaver* and Benedict Sheehy*
The objective of this article is to examine the structural change in
government that has enabled the politically strategic changes in
governance seen in many OECD countries over the past several
decades. In so doing, the legal structures and political strategies
underlying the regulatory state are explained. Drawing upon classical
theories of the division of labour, two distinct divisions of labour ± one
legal, the other political ± are identified that provide insight into the
relationship between the legal structure and political strategies under-
pinning the emergence of the regulatory state. The implications of this
article are that it provides a description of how the executive branch
has been able to shift the balance of power significantly in its favour
while at the same time divesting itself of its core constitutional tasks of
governing the administrative arm of government.
The transition from the `welfare' to the `regulatory state'
has now occurred
to an extent that two aspects of the transformation have become abundantly
First, there has been a marked change in the structure of governments.
*Graduate School of Business and Law, RMIT University, GPO Box 2476,
Melbourne, Victoria 3001, Australia
1 The `regulatory state' is a term often attributed to Majone. However, it was used
nearly a decade earlier by Harold Seidman and Robert Gilmour in Politics, Position,
and Power: From the Positive to the Regulatory State (1986), see G. Majone, `The
Rise of the Regulatory State in Europe' (1994) 17(3) West European Politics 77.
2 It has been suggested that Western democracies have begun entering a new phase in
governance referred to as the `post-regulatory state'. The post-regulatory state encom-
passes the idea that governance is no longer an activity that falls within the sole domain
of governments. This is evident in the increasing delegation of public governance
functions and powers to non-state actors as well as the rise of private non-state
ß2014 The Author. Journal of Law and Society ß2014 Cardiff University Law School
Governments are no longer singular, centralized organizational entities.
Instead, they now resemble hub and spoke-like networks comprised of a
constitutionally prescribed central node that is linked to a myriad of quasi-
independent public bodies of diverse functional types and legal forms-
referred to in this article as agencies.
Second, there has been a profound
change in the strategy and method used by governments to administer state-
provided goods and services. Under the welfare state model of government,
agencies were used sporadically for strategic interventionist purposes. In the
regulatory state, the agency has become the workhorse enabling the near-
wholesale transfer of administrative responsibilities away from the core
departments of government for a variety of political and legal reasons.
Although these two aspects are distinct phenomena, a well-known
concept that provides helpful insights explaining both is the idea of a
`division of labour'. The division of labour is a theory of economic and
social organization most closely associated with Adam Smith. He developed
the classical economic concept to explain the economic relationship between
labour specialization and efficiency gains.
In sociology, Emile Durkheim's
further application of the theory was used to describe the evolution and
expansion of social institutions.
Both perspectives are useful in explaining
different aspects of the regulatory state and its ubiquity. Durkheim's
observations help explain broad patterns in the structural and institutional
features of the regulatory state. Smith's approach provides insights that help
explain the strategic choices made by governments in allocating particular
types of work tasks to specific forms of agencies.
The broad objective of this article is to investigate the relationship
between these structural and strategic changes and the division of labour.
Using the division of labour as an analytical frame, the specific research
question the article seeks to answer is how the change in structure and
strategy of governments has evolved over time to contribute to a third
phenomenon ± the rise of the `regulatory state' in the United States, United
Kingdom, and Commonwealth countries.
Finding a connection between the regulatory state and the division of
labour is not novel one. It has been noted elsewhere that there is some ill-
regulatory regimes. See C. Scott, `Regulation in the Age of Governance: The Rise of
the Post-Regulatory State' in The Politics of Regulation, eds. J. Jordana and D. Levi-
Faur (2004).
3 R. Wettenhall, `Agencies and non-departmental public bodies' (2005) 7 Public
Management Rev. 615.
4 A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1904).
5 E. Durkheim, The Division of Labour in Society (1934).
6 I. Begg, `Introduction: Regulation in the European Union' (1996) 3 J. of European
Public Policy 525.
ß2014 The Author. Journal of Law and Society ß2014 Cardiff University Law School

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