The balancing act

Risk regulation is a balancing act between different interests and interest groups. It involves balancing risks against protection, determining levels of risk aversion and risk taking in ways which reasonably allow innovation and which do not unreasonably harm others. Consideration of risk regulation issues needs to take into account a variety of different perspectives and the need to be cautious about being swayed by dominant interest groups.

The politics of managing the tensions and interests involved in risk regulation are well demonstrated in governments and their executives. In the UK the mood is presently one of caution about regulation. The Better Regulation Commission and Better Regulation Executive have explicitly deregulatory agendas. The Executive has responsibility for the Government's commitments to regulate only when necessary; set exacting targets for reducing the cost of administering regulations; and rationalise the inspection and enforcement arrangements for both business and the public sector.

The first of these - to 'regulate only when necessary' - is a potential minefield. The phrase 'when necessary' typically looks different from different perspectives. The politician, the regulator, the consumer, the trade association and the business representative may all have various takes on the phrase, and these may change over time and vary according to circumstances.

Politicians may feel it necessary to legislate in the wake of a major disaster or the development of a moral panic, a classic example being the dangerous dogs legislation which followed in the wake of a series of highly publicised attacks by dogs on children. This legislation is often criticised, as in the Better Regulation Commission's latest report on Risk Regulation and Responsibility (2006). Yet academic research has found that the BRC's earlier evaluations of this piece of legislation are flawed and highlight vulnerabilities in their principles and assessments of good regulation (C Hood, R Baldwin and H Rothstein, Assessing the Dangerous Dogs Act: When Does a Regulatory Law Fail? Public Law Summer 2000: 282-305).

In other cases politicians may be under pressure to resist regulation or to deregulate, notably from the business community. But this is not to say that business is unilaterally against regulation. There is well documented evidence that some businesses favour regulation - sometimes as an anti-competitive tool - while others complain that irresponsible areas of their own industries should be more rigorously regulated to maintain sector, and even national, reputations. Trade associations may also be contradictory, ritually complaining about regulation while themselves gold plating the requirements through their interpretations of legal compliance. Consumers are similarly volatile, simultaneously complaining about too little regulation when something goes wrong and too much red tape when they are directly affected. These are persisting problems for governments and regulators.

Risk regulation is of course not just the preserve of the state: a variety of organisations may become involved in regulation. It is not just about red tape; it is about the negotiation of appropriate levels of risk regulation by the state in conjunction with others. Decisions made by non-state organisations are increasingly important as regulatory regimes co-opt actors beyond the state. Often, new layers of 'meso regulation' emerge to oversee the activities of state and non-state actors in the public interest. The latest issue of Risk & Regulation discusses this phenomenon with reference to the self-regulation of professional services. Robert Kaye explains that the arrangements being put into place may not best serve those beyond the regulated professions, partly because of structural considerations which limit the ability of meso regulators to make the public interest in regulation paramount.

Regulation is also increasingly transnational. The case of EU legislation is an interesting example of how state and supranational governance systems interact. The Davidson Review of the Implementation of EU Legislation is a classic example of how local and national politics interplay and different interest groups set agendas. The remit of the review was '...to ensure that EU legislation has not been implemented in the UK in a way that results in unnecessary regulatory burdens'. The emphasis on cases of over-implementation is made clear in the report, where evidence of under-implementation is pushed aside as irrelevant, although the report did find that '...over-implementation may not be as widespread in the UK as is sometimes claimed' (2006). The biases under consideration and the interest groups taking the foreground and setting the agendas are only too clear here. In few of these government or quango-led discussions is the voice of the consumer much in evidence. Risk regulation is about balancing interests, and a balanced view means taking into account not just cases of over-implementation but also under-implementation. It also means listening to more than one narrow section of stakeholder interests. Achieving this balance is a persistent problem, which will never be perfectly resolved. Risk regulation is inherently political, and ensuring that all stakeholders are properly represented is the task of good government, but one they may wish to shy away from, especially in the face of some highly organised and vocal interest groups.

Bridget Hutter is professor of risk regulation and director of the ESRC Centre for Analysis of Risk and Regulation (CARR), London School of Economics, www.lse.ac.uk/collections/CARR
An earlier version of this article was published in Risk & Regulation, November 2006.