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Regulators, Learning, Governance and Networks

Posted by Steve Waddell in Change, Learning on July 9, 2012

A conference for people concerned with regulation was surprisingly interesting.  I went there only because I was invited to speak.  Organized with the European Consortium for Political Research, it was a great example of learning from beyond my usual network.

The very title of the event pushed my stereotypes:  Regulation and Governance Conference:  New perspectives on learning, regulation and governance.  I just wouldn’t have expected people concerned with regulation to put all those things together.

The speakers weren’t talking about regulation simply in terms of regulatory bodies like ones for the finance industry.  They have a much broader range of interests that concern the very relationship between law and people:  what arrangements/actions succeed in stimulating observance of it?  This encompasses both “hard” and “soft” law.

From Command and Control to Multi-stakeholder Engagement

This perspective makes governance and regulation as a big trend topic.  In a new book I learned about, Oxford Handbook of Governance, Orly Lobel writes:  “The development of new governance theory marks a paradigm shift from the old regulation by Command & Control to…a vision of law and policy that draws on the comparative strengths of both private and public stakeholders and highlights the multiple ways in which the various actors in a society contribute to the acts of ordering social fields.”

This seems to me a very valuable shift to encompass Global Action Networks involved in certification such as the Forest Stewardship Council, those influencing standards more broadly like the Global Reporting Initiative, and those supporting implementation of intergovernmental agreements such as The Access Initiative.

There are actually some good historic examples of a multi-stakeholder governance approach, such as with Labor Boards and Occupational Health and Safety.  The Extractive Industries Transparency Initiative (a GAN) was presented at the conference as a case.

However, the degree of this multi-stakeholder approach actual sinking into core formal regulatory arrangements seems disappointing.  Financial regulation, for example, seems stuck in the government regulator versus the industry model, rather than engaging customers, investors and others.  Aside from some interesting modest examples in the usual Nordic countries and The Netherlands, I didn’t really learn about much movement.  Usually stakeholders get caught in a distant “advisory” or “legal plaintiff” roles, with regulators supposedly all-powerful and knowledgeable.  Of course such a movement raises big questions about how to address power and resource differences amongst stakeholders.

Regulation and Learning

This all leads to a second trend with regulatory approaches that I learned about:  integration of learning and questions about adaptability to changing circumstances.  Changing, from an “object of regulation” to a multi-stakeholder collaborative approach with government as key facilitator, vastly enhances the opportunities for learning and adaptability around the goal of creating a healthy multi-stakeholder “system”.   Learning raises big questions about how to generate the needed data (hence whistleblower legislation, which the conference paid some attention to), and also about capacity for “emergence” of a regulatory system from a multi-stakeholder (change) process perspective.

I was delighted to read the work of conference host Claudio Raedelli and the Oxford Handbook Governance and Learning chapter he put out with Fabrizio Gilardi.  They bring forth core critical concepts such as emergence, complexity and four types of learning (see Table).  This draws very particularly from policy-making associated inquiry.  Totally unknown to me, this tradition has developed its own interpretation of Argyris and Schon’s work on first- and second-and third-order change (incremental, reform, transformation) based on learning, starting with a 1993 article by Peter Hall titled Policy Paradigms, Social Learning, and the State.  It uses “social learning” rather like I use “societal learning” to describe increased societal-level capacity to realize its aspirations.  (In my world, “social learning” refers to how people learn from one another.)

Further integration of this political science approach with other learning traditions, such as those of organizational learning, societal learning and change would further strengthen both approaches.   In particular, I think that public policy-making and regulation can benefit from the growing field of dynamic change knowledge.  What I learned suggests that the regulation field remains too static and does not access new change methodologies that are focused on “emerging the future”, such as with Otto Scharmer’s work.

Networks and Regulation

Governance as “networks” was an additional perspective that led to my invitation from Axel Marx and Kazuki Kitaoka, among the authors of their UNIDO report on networks that was the topic of an earlier blogNetworks for Prosperity:  Achieving Development Goals through Knowledge Sharing.

Needing More Attention: Globalization, Sustainability

All three of these trends – governance, learning and networks – reflect the observation by Jacob Torfing that “…institutionalized negotiations between interdependent actors contribute to the production of public regulation”  (bold added).  I see two huge challenges for regulation.

One is the changing role of the nation state, given globalization.  It seemed a basic assumption was that the nation state is the enduring platform for effective regulation.  Although mention was made of its comparative shrinking role in the context of globalization, this was never taken up in any meaningful way I heard.  Multi-lateral organizations, like the OECD, are themselves based in the nation-state assumption.  Europe, through the EU, is where the most intense and interesting experiment is going on with supra-national regulatory approaches.  The proliferation of GANs and their global voluntary standards is being propelled by a global governance gap.  Surely these types of arrangements (and others) to address this gap deserve urgent attention.

The second huge challenge received inferential attention through the learning focus:  the vastly increasing pace of change and crises, such as in the finance industry (chronic crisis?) and with the natural environment (climate change is creating hugely increased scale/pace of disaster;  bio-diversity is collapsing).  These are vastly outstripping the ability of the traditional regulatory approaches.  This received some modest attention through the climate change and resilience lenses.

Finding ways to greatly speed the development of soft and hard law approaches to handle these challenges is an absolute necessity.  Aggressive pursuing multi-stakeholder governance, learning and networks provides a good foundation to adequately address the challenges.

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