Governments as Regulators

Abstract

This chapter turns to the role that government plays in regulating activities that pose risks to public health and safety. How does government establish and implement prudent schemes of regulation of risky activities? Enforcement of regulations and policies faces many of the same obstacles considered in previous chapters: principal-agentprincipal-agent problem problems within government, non-compliance by actors in civil society, and deliberate efforts at evasion of regulationregulation by actors at every scale. To this list we can add the fact of regulatory capture: the ability of corporations and industries to influence legislators and agency officials in favor of less restrictive regulation and enforcement. How does government attempt to secure a sufficiently high level of compliance with rules and regulations in the economic sphere? How effective are private power-holders in influencing the regulatory process and in shaping the enforcement mechanisms considered by regulatory agencies? The chapter considers the system of “delegated regulation” as a government arrangement that is vulnerable to conflict of interest and regulatory capture. The Nuclear Regulatory Commission is taken as a case study.