GOVERNMENT REGULATION

Government regulation is part of two larger areas of study, one encompassing all state policy making and administration, whether regulatory or not, the other encompassing all regulatory and deregulatory activity, whether by the state or by some other institution. Viewed either way, the subject remains an interdisciplinary growth industry, with contributions made by political scientists, economists, legal scholars, historians, and sociologists. Scholarly emphasis in the 1990s on economic globalization and its consequences has added to an already rich literature on government regulation, deregulation, and re-regulation. Now attention is focused on the supranational as well as the national level. Cross-national, comparative studies of government regulation complement a large literature focused on the United States.

WHAT IS GOVERNMENT REGULATION?

There is no uniformly agreed-upon concept of regulation that separates it from other kinds of government activity. Mitnick (1980, pp. 3–19) offers a good overview of concepts of regulation. On the one hand, narrow definitions typically focus on government action affecting private business by policing market entry and exit, rate or price, and profit structures and competitive environment. Some narrow definitions confine regulatory activity to that undertaken by administrative agencies (see also Majone 1994). If courts are the exclusive site for state rule making and enforcement, it is not considered government regulation. On the other hand, the broadest definitions conceive of regulation as government action affecting private businesses or citizens. Government regulation then becomes virtually coterminous with all government policy making and administration, whether by legislatures, administrative agencies, courts, or some combination.

Mitnick (1980) shows that American scholarship has provided for much variation in the conceptualizing of government regulatory activity. However, Majone (1994) suggests that in the past, American concepts typically were narrower than those adopted explicitly or implicitly by European scholars. For example, self-labeled regulation theory is a "quasi-Marxist theory [in which] the notion of regulation . . . refers to institutions and norms that permit the reproduction of conflictual or contradictory social relations" (see Steinmetz 1996, p. 346). In this predominantly European tradition, modes of regulation are broad political-economic and cultural governance forms. They revolve around capital accumulation and involve state action, including macroeconomic, social, and labor-market policies, but also involve systems of interest intermediation in the workplace, economic rule making by banks and other nongovernmental institutions, and cultural schemata followed and taught in families and schools. Lange and Regini (1989) and Regini (1995) reject such an all-encompassing definition of regulation in favor of a somewhat narrower one. But they also call attention to how regulatory action structures and reconciles conflicts and allocates resources, as well as coordinates interaction and relationships in production and distribution.

Lange and Regini (1989) argue that regulatory principles and regulatory institutions must be separated analytically. Both economic and political institutions regulate or engage in governance. We tend to equate market exchange principles with economic institutions and legal rulings and administrative decrees with the state. However, as Lange and Regini (1989) demonstrate, economic institutions also employ command and control logic, while the state may employ the logic of exchange. Most recently, European scholars have moved away from equating regulation with the realm of all institutional governance or of all government legislation and social control. Many now distinguish "the regulation issue" both from other modes of institutional governance and from other modes of state action, including nationalization and government planning (Majone 1994, p. 77).

Sabatier (1975) has offered a useful definition of government regulation in between the broad and narrow extremes. His definition is based on the goals and content of government policy, not on the means of enforcement. It highlights the distinction between government policing of behavior and government allocation of goods and services. Distributive (e.g., defense contracts) and redistributive policies (e.g., the income tax, social welfare policies) allocate goods and services. Government policing is self-regulatory if it polices behavior to the benefit of the group whose behavior is policed. It is regulatory if it "seek(s) to change the behavior of some actors in order to benefit others" (Sabatier 1975, p. 307). Pollution control, antidiscrimination, consumer protection, occupational safety and health, employment relations, and antitrust are examples of regulatory policies.

Sociologists often distinguish between economic and social regulation. Where economic regulation controls market activities, such as entry and exit or price controls, social regulation controls aspects of production, such as occupational safety and health standards and pollution control (e.g., Szasz 1986). The term social regulation is also used to signal regulation that directly affects people rather, or more than, markets (Mitnick 1980, p. 15). In the 1990s literature on European economic integration, a distinction has been made between regulation (governance oriented to making markets) and reregulation (governance oriented to constraining markets) (e.g., Streeck 1998). But the term reregulation is also used more broadly, to signal regulatory reform that both liberalizes markets and institutes new rules to police them (Vogel 1996).

Regulation is dynamic. It is "an ongoing process or relation" between regulator and regulated parties (Mitnick 1980, p. 6). Because of the nature of the legal system in the United States, regulation U.S.-style tends to involve issuing and applying legal rules (Sabatier 1975, p. 307). For example, Congress has legislated federal statutes to promote competitive markets, to prevent race and gender discrimination in employment, and to increase workplace safety. These laws have been interpreted and enforced by the appropriate federal administrative agencies and by the federal courts. Federal regulatory agencies include the Interstate Commerce Commission (ICC), Federal Trade Commission (FTC), Federal Communications Commission (FCC), Securities and Exchange Commission (SEC), Equal Employment Opportunity Commission (EEOC), National Labor Relations Board (NLRB), Environmental Protection Agency (EPA), Food and Drug Administration (FDA), and Occupational Safety and Health Administration (OSHA). (For case studies of many of these agencies, see Derthick and Quirk 1985; Wilson 1980b.)

Consistent with the U.S. emphasis on legal rules as implementing mechanisms, the institutional forms used to reach regulatory goals are varied. Breyer (1982) provides an overview of the ideal-typical workings of various government regulatory forms, including cost-of-service rate making (e.g., public utility regulation), standard setting (e.g., administrative rule making and enforcement by the EPA and OSHA), and individualized screening (e.g., the FDA regulations pursuant to which food additives can be marketed). Mitnick (1980) also provides an overview of government regulatory forms and contrasts regulation by directive (e.g., administrative and adjudicative rule making) with regulation by incentive (e.g., tax incentives, effluent charges, and subsidies).

It is no accident that European scholars in the 1990s are devoting heightened attention to government regulation and are also beginning to conceive of it more similarly to their U.S. counterparts (see, e.g., Majone 1994; Scharpf 1997a; Vogel 1996). European economic integration has been accompanied by concern that national governments would compete to lessen business costs in part by lowering standards for environmental, health and safety, financial, and other regulations. European integration has also involved a cumulative process of European Court of Justice rule making geared to constructing and policing the integrated market (see e.g., Leibfried and Pierson 1995; Scharpf 1997a). Thus, European integration has created a situation in which courts and judicial review are more important than they were in the past.

According to Majone (1994, p. 77), "regulation has become the new border between the state and the economy [in Europe] and the battleground for ideas on how the economy should be run." In addition, since national courts in ordinary administrative and civil proceedings apply the market-making and market-policing rules formulated by the supranational European Court, regulatory law is beginning to become visible to ordinary citizens of European countries as it has been for some time to citizens of the United States. These developments do not mean that we can assume a future convergence of either the concept or the reality of the "regulatory state" in Europe and the United States. They do mean that there is increasing potential for the cross-fertilization of scholarly concepts, theories, and empirical work from both sides of the Atlantic. These developments also provide new opportunities for informative comparative studies of government regulation.

THEORIES OF REGULATION

There are various general theoretical approaches to government regulation. Most are concerned with regulatory origins or processes, but often they also address questions of impact, at least implicitly. Because regulation is not just an object of scholarly inquiry but also an ongoing political process, it is easy to confuse normative perspectives on regulation with explanations for the empirical phenomenon. Here, I focus on the latter, that is, on positive as opposed to normative theories. Mitnick (1980) and Moe (1987) provide detailed exposition and evaluation of a large range of these positive theories. All are theories of "interest." Majone (1994) reviews the predominant normative perspective. The latter holds that corrective government action to improve economic efficiency is justified by such diverse types of market failure as natural monopoly, imperfect information and negative externalities (see also Breyer 1982).

Bernstein's classic life-cycle theory argues that regulatory agencies designed in the public interest become captured by the powerful private interests they are designed to regulate (see Mitnick 1980, pp. 45–50). The diffuse majority favoring government regulation loses interest once the initial statute is legislated. This leaves the regulatory agency with few political resources to confront strong, well-organized regulatory parties with a large stake in agency outcomes.

Arguing that regulatory agencies are not simply captured by private interests but are designed from the beginning to do their bidding, Stigler (1971) and others have developed the economic theory of regulation. This theory assumes that all actors behave rationally in their own self-interest and so try to use government to achieve their own ends. But economic interest does not necessarily result in effective mobilization of resources. Because "there is a mobilization bias in favor of small groups, particularly those having one or more members with sizable individual stakes in political outcomes," concentrated business interests have great advantages over diffuse groups in mobilizing for regulatory legislation (Moe 1987, pp. 274–275). Regulatory capture results when the costs of regulation fall upon a concentrated group (e.g., a particular industry such as railroads or airlines) and the benefits of regulation fall upon a diffuse group (e.g., consumers). Similarly, when benefits fall upon a concentrated group and costs on a diffuse one, regulation will be designed to benefit regulated parties.

The economic theory of regulation does not always predict capture. Generally, regulatory policies result from a chain of control running from economic groups to politicians to bureaucrats. These policies reflect the underlying balance of power among economic groups, whatever that balance may be. Considering different distributions of regulatory costs relative to regulatory benefits, Wilson (1980a, pp. 364–374) sketches four different scenarios for the origins of regulation. Exemplified by the origin and operation of the Civil Aeronautics Board, "client politics" is consistent with Stigler's prediction that regulation reflects the regulated industry's desires. Client politics result when costs are widely distributed and benefits are concentrated. When both costs and benefits are narrowly concentrated, both sides have strong incentives to organize and exert influence, so "interest group politics" results. Wilson views passage of the Commerce Act in 1886 as a product of conflict over rate regulation, in which interest group participants included railroads, farmers, and shippers.

According to Wilson, when both costs and benefits are widely distributed, interest groups have little incentive to form around regulatory issues because none can expect to capture most of the benefits or to avoid most of the costs. "Majoritarian politics," in which the mobilization of popular opinion is likely to play an important role, governs passage of such legislation. Finally, "entrepreneurial politics" characterizes the dynamics of mobilization around policies that offer widely distributed benefits but narrowly concentrated costs. Here, although policy opponents benefit from the mobilization bias of small numbers and have strong incentives to organize, a "policy entrepreneur" can "mobilize latent public sentiment . . . [and] put opponents" on the defensive (Wilson 1980a, p. 370). For Wilson, pollution-control laws enforced by the EPA exemplify entrepreneurial politics. Although the traditional economic theory of regulation predicts ultimate capture of agencies created by entrepreneurial politics, Sabatier (1975) argues that such agencies can avoid capture by concentrated business interests if they actively develop a supportive constituency able to monitor regulatory policy effectively.

Economic theories of government regulation have much to say about the political dynamics of social groups seeking and resisting regulation, but they do not attend to political and administrative institutions. In contrast, the positive theory of institutions "traces the congressional and bureaucratic linkages by which interests are translated into public policy" (Moe 1987, p. 279). This theory is one of a large group of more specific theories falling under the burgeoning "new institutionalism" in the social sciences (Eisner 1991; Powell and DiMaggio 1991). Like all variants of institutionalism, the positive theory of institutions argues that political institutions and rules of the game matter. Although actors try to create rules that lead to outcomes they favor, institutionalized rules may well be out of sync with underlying economic interests. Whether the regulatory policies of the U.S. Congress reflect any given economic interest depends on the distribution of that interest across congressional districts, the location of members of Congress who support that interest on particular committees with particular prerogatives and jurisdictions, and the rules of the congressional game.

The positive theory of institutions ordinarily begins with and focuses on the self-interest of actors in Congress and the regulatory agencies rather than that of actors outside these legislative and administrative institutions. It argues that legislative choice of regulatory forms as well as of regulatory content can be modeled as a function of the costs and benefits to legislators of selecting particular regulatory strategies (see, e.g., Fiorina 1982). These costs and benefits are a function of the distribution of economic interests across districts and the political-institutional rules of the game. In general, electoral incentives prevent members of Congress from placing high priority on controlling administrative agencies. The principal-agent models of control employed by the positive theory of institutions "suggest . . . that even when legislators do have incentives to control agencies toward specific ends" they probably will fail "owing to . . . conflicts of interest, information asymmetries, and opportunities for bureaucratic 'shirking"' (Moe 1987, p. 281). Game-theoretic models of regulatory enforcement developed in this theory indicate ample opportunity for the capture of the regulators by regulated parties (Ayres and Braithwaite 1989). However, where some forms of capture are economically undesirable, others are economically (Pareto) efficient.

Other theoretical perspectives used by sociologists to study regulation include various forms of neo-marxist political economy or class theory (see Levine 1988; Steinmetz 1997; Yeager 1990) and the political-institutionalist view developed by Theda Skocpol and others (Skocpol 1992; Weir et al. 1988). Where the former parallels the economic theory of regulation in focusing on the organization and mobilization of nongovernmental actors—specifically classes and segments of classes—in support of their interests, the latter parallels the positive theory of institutions in stressing the import of political structures and rules of the game. But in contrast to economic and positive theories, which largely model comparative statics (Moe 1987), class and political-institutional theories ordinarily focus on historical dynamics.

Political institutionalists stress, for example, the importance of feedback from prior to current regulatory policies and of political learning by government actors (see Pedriana and Stryker 1997). Feedback and political learning can help account for deregulation as well as for regulation (see Majone 1994). Class theorists stress how regulatory enforcement and cycles of regulation and deregulation evolve over time in response both to the structural constraints of a capitalist economy and to active struggles over regulation by classes and class segments. For example, Yeager (1990) argues that because government in a capitalist society depends on tax revenues from the private accumulation of capital, it tends to resolve conflict conservatively over such negative consequences of production as air or water pollution, so as not to threaten economic growth. Many aspects of U.S. regulatory processes make it likely that laws passed against powerful economic actors will be limited in impact or will have unintended effects that exacerbate the problems that initially caused regulation.

The effectiveness of regulatory statutes may be limited by implementation decisions relying on cost-benefit considerations because ordinarily costs are more easily determined than benefits and because cost-benefit analyses assert the primacy of private production. Moreover, government relies upon signals from private business to gauge when regulation is preventing adequate economic growth. Limited effectiveness of regulation also results from enforcement procedures tilted in favor of regulated parties that have the technical and financial resources needed to negotiate with agency officials. Corporate organizational forms encourage leniency and negotiations about compliance. Corporate officials seldom are prosecuted for criminal violations because the corporate form makes it hard to locate individual culpability. Because courts emphasize proper legal reasoning when reviewing agency decisions, regulatory agencies may focus on procedure rather than substance. Ambiguous statutes are likely to heighten a procedural approach to regulatory enforcement (see Edelman 1992). In turn, focus on procedures over substance will tilt enforcement toward the interests of regulated parties. Finally, because no unit of government has complete control over any given policy from legislation through funding and implementation, parties bearing the cost of regulation need thwart regulation at only one point in the process, while supporters of regulation must promote it effectively at all points. In implementation, advocates of tough enforcement are likely to lose to more resource-rich segments of business seeking to limit regulation (Yeager 1990).

Notwithstanding forces that load regulatory processes in favor of the regulated business community and particularly the larger, more powerful corporations at the expense of smaller firms, consumers, environmentalists, and labor, class theorists also see limits on regulatory leniency. For example, Yeager (1990) argues that pollution-control enforcement biased toward large corporations dominating the U.S. economy will reproduce both the dominance of this business segment and of large-scale pollution. Regulatory ineffectiveness may lead to a loss of legitimacy for government as the public responds to higher risk and to perceived governmental failure by pressuring for additional pollution-control efforts.

Finally, although the concept of interest is central to theories of regulation, sociologists studying regulation are sensitive to the causal role of cultural schemata, norms, ideas, values, and beliefs as well as of economic and political interests and political institutions. For example, elaborating on Swidler's (1986) notion of culture as a tool kit, Pedriana and Stryker (1997) examine the diverse cultural strategies involved in the symbolic framing of regulatory enforcement efforts in U.S. equal employment law. They show that these frames are cultural resources developed by social and institutional actors in variable ways as a function of their variable political-economic, political-cultural, and legal circumstances. They also show how actors' mobilization of cultural resources affects the subsequent path of regulatory policy making. Construction of cultural resources, then, is one key mechanism through which policy feedbacks occur and political learning is given effect. Meidinger (1987), too, highlights the role of culture, focusing on the way understandings—including understandings about costs, benefits, and appropriate trade-offs—are negotiated and enacted by actors in regulatory arenas. Because statutes are indeterminate, regulators always possess some discretion. In addition, the mutual interdependence among regulated parties and regulators calls attention to the formation of regulatory communities in which shared cognitive and normative orientations develop, forming the basis for ongoing regulatory cultures.

Ayres and Braithwaite (1989) harness the notion of regulatory culture to their search for economically efficient regulatory schemes. They approach the problem of regulatory capture through a synthesis of economic interest and socialization mechanisms. Seeking a social framework to facilitate economically efficient forms of capture while deterring inefficient capture, they point to benefits obtainable if all participants in regulatory processes that empower public interest groups adhere to a culture of regulatory reasonableness. For example, social and self-disapproval sanctions in a regulatory ethic that is firm but reasonable will inhibit regulators from capitulating to law evasion by industry and from punitive enforcement when industry is complying with regulatory law. Yeager (1990) has a somewhat different view of regulatory reasonableness. He views limits on regulatory laws controlling pollution as a function of prevailing cultural belief systems as well as of class and group relations. Notions of regulatory responsiveness and reasonableness are negotiated in enforcement interactions between regulators and regulated parties within an overall cultural framework attributing moral ambivalence rather than unqualified harm to regulated conduct. This facilitates adoption of a technical orientation to solving "noncompliance" problems rather than of a more punitive approach. Because the regulation of business has to be justified constantly within highly market-oriented cultures like the United States, administering market-constraining regulation itself becomes morally ambivalent and contributes to less aggressive enforcement.

FROM REGULATION TO DEREGULATION AND REREGULATION

Discussions of dynamism and change, whether through structural contradiction and class conflict as stressed by neo-Marxist perspectives, or through policy feedback and political learning as stressed by political-institutionalists, lead naturally toward explicit theorization and empirical research on periods or cycles of regulation and deregulation or reregulation. As Majone (1994) points out, deregulatory ideologies and politics in the United States were preceded by decades of scholarship on the economics, politics, and law of government regulatory processes. In Europe, by contrast, the term "deregulation" gained much more "sudden currency" (Majone 1994, p. 98). Unsurprisingly, on both sides of the Atlantic, the concepts and perspectives used to study deregulation parallel the alternative economic interest and political interest/political-institutional foci of theories of regulation themselves.

On the one hand, for example, Szasz (1986) analyzes deregulatory social movements in the United States through the lens of presumed accumulation and legitimation functions of the capitalist state. He suggests that changing economic circumstances provided political opportunity for the deregulatory movement in occupational safety and health. In the 1970s, a substantially worsening economy altered the balance of class forces and changed the political situation confronting the state. Deteriorating economic conditions weakened the economic and political power of organized labor, a major supporter of occupational safety and health legislation. These same conditions encouraged big business to join the already existing but to this point unsuccessful small business attacks on the Occupational Safety and Health Administration. Where small business argued for the complete elimination of OSHA, big business relied on cost-benefit analyses to argue that sound economics required reforming the implementation process. Though economic conditions made deregulation possible, the success it achieved and the form it took required business interests to mount a conscious, ideological campaign to mold favorable public opinion.

On the other hand, Derthick and Quirk (1985), examining deregulatory processes in the realm of economic, as opposed to social regulation, criticizenon–state-centered analyses of deregulation. They argue that, at least in the United States, regulated industries with a putative stake in deregulation did not ask to be deregulated. Nor were consumers' movements a major force. Instead, the deregulatory push emanated predominantly from within state regulatory agencies and courts, with commissioners and judges acting as policy entrepreneurs. Deregulatory politics and deregulation itself were only later and often quite reluctantly accepted by regulated industries such as airlines, trucking, and communications.

The foci of Derthick and Quirk (1985) and Szasz (1986) converge to highlight the role played by academic and policy think-tank experts in paving the way for and promoting pro-competitive regulatory reform. Szasz shows how U.S. economists and political scientists built a rationale for deregulation in the 1970s (see Breyer 1982 for a sophisticated but very readable overview of economic justifications and analyses of regulation and of economic justifications for deregulation). Derthick and Quirk (1985) push the role played by these experts further back in time, albeit noting that the earliest promoters of regulatory reform would never have anticipated the successful political movement for which they helped paved the way. Nonetheless, U.S. administrative law and public administration experts long had found fault with government regulatory structures and procedures. By the 1960s, economists had joined the chorus, attacking economic regulation for fostering costly inefficiencies and for shielding industries from competition. Economists also attacked economic and social regulation for producing costs in excess of benefits.

As Majone (1994) points out, where the United States tended to create regulated industries, allowing critics to catalogue subsequent regulatory failures, Europe traditionally tended toward public ownership, with its own set of corresponding failures to interpret and experience. When deregulatory ideologies were produced in Europe or diffused from the United States, privatization became the rallying point. But neither privatization nor the search for "less restrictive" or "less rigid" government intervention necessarily means the retreat of the state (Majone 1994, p. 80).

Deregulation is most precisely conceptualized as reduction in the level of government regulation. It involves eliminating or reducing government rules or lessening their strictness (Vogel 1996). Strictly speaking, deregulation moves institutional governance toward self-governed markets. But according to Vogel (1996), much scholarship is remiss in equating deregulation with any kind of liberalization or pro-competitive regulatory reform (see, e.g., Derthick and Quirk 1985). Equating deregulation with market liberalization is undesirable because it forecloses by definitional fiat the question of whether and how liberalization may involve more government rule making rather than less. Liberalization may involve changing government rules rather than eliminating them (Vogel 1996).

Indeed, Vogel (1996) argues that across capitalist democracies the trends are toward what he terms reregulation rather than deregulation. Rather than reduce their levels of regulation of the private sector, governments have reorganized their control over it. When governments privatize previously nationalized industries and when they liberalize regulated markets to introduce more competition, ordinarily this involves both the reformulation of old rules and the creation of new ones. As the title of Vogel's book suggests, then, the price of "freer markets" is "more rules" (Vogel 1996; see also, e.g., Majone 1994; Streeck 1998). Increased conceptual precision helps Vogel solve what otherwise appears as a puzzle and paradox: that, as noted by Derthick and Quirk (1985), state actors themselves promote a great deal of deregulatory activity. To the question of why governments would take action apparently against their own interests, Vogel answers "they don't." Instead, as politicalinstitutional perspectives on regulation would suggest, governments initiate regulatory reform and shape reregulation in their own interests. Pro-competitive regulatory reform represents neither "the triumph of markets over government" nor "the triumph of [economic] interests over government" (Vogel 1996, pp. 10, 13).

Vogel rejects exclusively economic theories of deregulation that argue either that increasingly integrated global markets force governments to deregulate or that interest groups, especially regulated industries, orchestrate reform. Instead, he provides a synthesis of sorts between economic and political-institutional views. He hypothesizes that, on the one hand, governments of advanced capitalist democracies do face a common set of economic and cultural pressures. Technologically induced global market changes in particularly dynamic sectors like telecommunications and financial services compel governments to respond in some way, but without setting the terms of the response. Diffusion of market and deregulatory ideologies from the United States also exerts pressures—albeit somewhat less strong—for a response. In addition, this ideological diffusion helps explain why governments across the advanced capitalist world adopt similar reform rhetorics. It does not explain when and why they undertake reform action or the form their reregulation takes. Finally, governments do face a common politics of economic slowdown, in which they find that "the growth in demand for government services outpaces the growth of government resources for meeting this demand (Vogel 1996, p. 40). This creates political opportunity. But it does not explain why conservative and even left political parties take that opportunity in some countries, while neither left nor even conservative parties do so in others.

In short, according to Vogel's theory of deregulation, there are a set of common forces for change—some stronger, some weaker, some broader, some narrower—that set the stage for specific national responses. However, "states themselves, even more than private interest groups, have driven the reform process" (Vogel 1996, p. 4). Governments in the advanced industrial world cannot ignore private groups' interests and demands, but they take the initiative in shaping reform and constructing politically acceptable compromises. In this, governments do not converge in a common deregulatory trend. Instead, they adopt particular types and distinctive styles of reregulation as they achieve liberalized markets to different degrees. At its core, so-called deregulation is about "finding new ways to raise government revenue and designing new mechanisms of policy implementation" (Vogel 1996, p. 19). These goals typically concern states more than private interests, so it becomes no surprise that state actors actively mobilize to shape regulatory reform.

Vogel categorizes diverse reregulatory styles and processes in terms of two dimensions: whether the emphasis is more on liberalization or more on reregulation, and whether the reregulation undermines or enhances government control over industry. In turn, the diverse reregulatory styles and processes emerge as a function of variation across countries in political-institutional regulatory regimes, developed over time as a function of each country's own unique history, especially its history of industrialization. Regulatory regimes are "comprised of specific constellations of ideas and institutions" (Vogel 1996, p. 20). The ideas, or regime orientation, involve "state actors' beliefs about the proper scope, goals and methods of government intervention in the economy and about how this intervention affects economic performance" (Vogel 1996, p. 20). Diverse regime orientations cause government officials to define the public interest in varied ways, to interpret common economic and ideological pressures and trends differently, and to conceive of different kinds of responses to such pressures and trends as appropriate. Regime organization involves how state regulators concerned with a given industry are structured internally and how they are linked to the private sector. In contemplating reform, government actors will assess how diverse alternatives are likely to affect existing institutions and arrangements. Differences in regime organization affect especially who—whether political parties, bureaucrats, and so forth—will control reform processes, whether government officials will try to refrain state capabilities, and what capabilities government officials will try to retain or develop for themselves in the reform process.

Vogel's (1996) framework fundamentally reorients scholars to distinguish concepts of deregulation and reregulation and to approach both in terms of an overarching perspective that considers regulation, deregulation, and reregulation as part of the broader study of regulatory change. (Parallel efforts to integrate explanations of welfare development and retrenchment into a broader theory of change in social policy are equally underway [see, e.g., discussions in Steinmetz 1997; Stryker 1998]). Vogel's framework is conducive to investigating the interaction of international pressures and domestic politics, as well as the interaction of governments and private actors. It is likewise conducive to investigating how institutional and cultural boundaries between public and private have been variably articulated across countries and over time, and to investigating how globalization shapes opportunities for and constraints on national-level government regulation and on the development of supranational regulatory institutions.

EMPIRICAL STUDIES

Empirical research on regulation includes studies of regulatory origins (e.g., Majone 1994; Sanders 1981, 1986; Steinberg 1982), processes (e.g., Edelman 1992; Eisner 1991; Moe 1987; Yeager 1990), and impact (e.g., Beller 1982; Donahue and Heckman 1991; Mendelhoff 1979). It also includes studies of deregulation and reregulation (e.g., Derthick and Quirk 1985; Streeck 1998; Szasz 1986; Vogel 1996). Studies of processes look at the evolution of regulatory forms (e.g., Majone 1994; Stryker 1989, 1990) as well as at the substance of regulatory rules (e.g., McCammon 1990; Melnick 1983; Vogel 1996). Researchers employ a variety of methodologies. These include quantitative assessment of causes and consequences of regulation (e.g., Donahue and Heckman 1991; Mendeloff 1979; Steinberg 1982) and quantitative models of regulatory processes (e.g., Edelman 1992; Edelman et al. 1999; Yeager 1990). They also include qualitative, case-oriented legal, historical, or comparative accounts of regulatory, deregulatory, and reregulatory evolution (e.g., Majone 1994; Melnick 1983; Sanders 1981; Stryker 1990; Szasz 1986; Vogel 1996). It is hard to generalize about findings from empirical studies of regulation. A few things, however, are reasonably clear.

First, no general theory or perspective on regulation enjoys unqualified support when stacked up against the variety and complexity of regulatory experiences. Second, all extant theories have something to offer the empirical analyst. Third, in response to the first and second points, the field seems to be moving away from accounts that focus on either economic interests or political-institutional rules to more integrative or synthetic accounts that encompass a role for both. Fourth, European Union integration has increased interest in empirical research on supranational regulatory bodies, as a key part of the broader study of multitiered governance structures. Fifth, empirical building blocks are being constructed for overarching concepts and theories that account for variation in regulatory regimes and for regulatory change, whether toward increased or decreased regulation or from one institutional principle (e.g., command and control) to another (e.g., market incentives). The rest of this article elaborates on these points.

Empirical studies suggest that economic interests and resources are a major factor but not the sole one, in the dynamics of political struggles over regulatory origins and administration (Moe, 1987; Sanders 1986; Stryker 1989, 1990; Szasz 1986; Yeager 1990). Political structures and rules of the game matter because they are the mechanisms through which economic and social actors must translate their interests into regulatory policy (Moe 1987). But for legislative, administrative, and judicial participants in policy processes, these institutional mechanisms also create independent interests in, and resources for, regulatory policy making. Sanders (1981) shows that the regulation of natural gas in the United States has been a function of four sets of regionally based economic interests, including gas producer regions of the United States and gas consumer regions, as well as of electoral rules and structures. Regulatory outcomes have resulted from a dynamic relationship among political actors who reflect the changing market positions of their constituents. "The potential for sectional conflict is exacerbated by the territorial basis of elections, the weakness of the party system, and a federal structure that not only encloses different political cultures and legal systems, but also supports fifty sets of elected officials sensitive to encroachments on their respective turfs" (Sanders 1981, p. 196).

Current regulatory structures and policies do have feedback effects constraining and providing opportunities for subsequent regulatory policies as well as for subsequent action by parties with interests at stake in regulation (Sanders 1981; Steinberg 1982; Stryker 1990). Feedbacks occur through cultural as well as political-institutional mechanisms and political learning (e.g., Pedriana and Stryker 1997; Vogel 1996). In this regard, Vogel's (1996) comparative study of deregulation and regulation of telecommunications and financial services in the United States, the United Kingdom, France, Germany, and Japan highlights the mediating role of nationally specific regime orientations. State actors interpret situations and conceive of responses through the lens of regime orientation. Their cognitive and normative interpretive work then shapes the form and content of regulatory reform. Pedriana and Stryker (1997) demonstrate that both general equal opportunity values and the specific language in which they are expressed provide raw materials for construction of symbolic resources by actors struggling over the enforcement of equal employment and affirmative action law in the United States. The work of Majone (1994) and Boyer (1996), among others, suggests that political learning occurs through the experience and interpretation of regulatory failures as well as of market failures.

In addition, the legal structures and culture through which most regulation is administered in the Untied States significantly shape regulatory processes and outcomes. For example, Melnick (1983) shows how the narrow, highly structured, reactive, and adversarial legal processes through which pollution control takes place in the United States have led to court decisions that simultaneously extend the scope of EPA programs and lessen agency resources for achieving pollution control goals. Appellate judges tend to promote stringent antipollution standards because they are removed from local concerns and are likely to be inspired by broad public goals. In a different institutional location, trial judges observe the impact on local businesses and citizens of imposing strict regulation. Their flexibility in response to the perceived harm of strict regulation generates an equity-balancing enforcement that counteracts what is accomplished in standard setting.

Likewise, because legal mandates are not self-executing and many are ambiguous, the response of regulated parties is an important mediator of regulatory impact. This response includes actions taken by organizations to demonstrate their compliance with law. For example, Edelman (1992) and Edelman and colleagues (1999) show that organizations respond to federal equal employment law in the United States by creating equal employment opportunity policies, organizational units, and grievance procedures. These both promote symbolism over substance and shape later court constructions of what constitutes compliance and what will insulate organizations from liability. More obviously, the response of regulated parties also includes whether and how public and private institutions and individuals invoke regulatory law on behalf of aggrieved parties (e.g., Burstein 1991). Additionally, it includes how public and private actors mobilize the values and language encapsulated in the law as political-cultural and legal resources to change the law (e.g., Pedriana and Stryker 1997).

Yet another insight from empirical studies is that regulatory implementation is influenced by internal agency politics as well as by the agency's external environment. Likewise, technical experts play an important role in shaping regulatory evolution. Stryker (1989, 1990) has shown how, in conjunction with class and political institutional factors, intra-NLRB conflict between agency economists and lawyers over the proper administrative use of social science caused Congress to abolish the NLRB's economic research unit. Katzmann (1980) and Eisner (1991) have shown how internal jockeying by economists within the FTC changed enforcement priorities and outcomes over time. Even more generally, empirical studies of regulation and deregulation point to the justificatory and mobilizing import of diverse kinds of scientific and technical expertise (e.g., Derthick and Quirk 1985; Eisner 1991; Szasz 1986). While heavily relied upon to promote deregulation and pro-competitive regulatory reform, economic analysis also can be mobilized to promote more stringent regulation and diverse types of reregulation (e.g., Rose-Ackerman 1992; Stryker 1989).

Empirical studies of regulation also show that regulation often has unintended effects. Yeager (1990) shows how EPA sanctioning decisions and processes, while rational in the face of economic, political, and legal constraints on the agency, reproduce private sector inequality by favoring large corporations that have financial and technical resources. Large companies have greater access to agency proceedings than do small companies. Agency proceedings often change pollution-control requirements in favor of regulated firms, so that ultimately large corporations have fewer pollution violations. In decisions to apply the harshest sanctions—criminal and civil prosecutions—the EPA may well avoid tangling with the most resource-rich firms for fear of losing in court. Melnick (1983, p. 354) indicates a similar dynamic. Ostensibly neutral procedures, then, create inequitable law enforcement and may also help reproduce the problems that led to the initial pollution-control legislation.

Yet another important message emphasized by empirical studies of regulation in the 1990s is the need to consider the growth of supranational mechanisms of governance and how these interrelate with national government regulation. Majone (1994), for example, shows that with minimal explicit legal mandate and with very limited resources, there has nonetheless been continuous growth in the final three decades of the twentieth century in regulation by the European Community (EC, now the European Union, or EU). Economic and social regulation is "the core" of EU policy making (Majone 1994, p. 77). It is undertaken by the European Commission (Commission) in tandem with the European Court of Justice (ECJ), now supplemented with a court of first instance (see Leibfried and Pierson 1995). Between 1967–1987, for example, even before the Single European Act recognized EC authority to legislate to protect the environment, there were close to "200 environmental directives, regulations and decisions made by the European Commission" (Majone 1994, p. 85). Consumer product safety, banking and financial services, and medical drug testing also have been areas of high-volume Commission regulatory activity. Regulation has provided a way for the Commission to expand its role in spite of tight EC budgets and the serious political-institutional constraints embedded in the EC's legal framework, at the same time as EC member states have been willing to delegate to a supranational authority because agreements among the EC national governments had low credibility (Majone 1994).

In the regulatory arena, the ECJ has been as important as, or even more important than, the Commission (see, e.g., Leibfried and Pierson 1995). Ostner and Lewis (1995), for example, stress the inter-relationship of the Commission and the ECJ. Even before the Single European Act in 1987, "gender policies . . . evolved through the intricate interplay between these two supranational bodies, within the range of outcomes tolerated by member states. By the late 1980s the Court's interpretations of article 199 [of the Treaty of Rome], Commission-fostered directives that [gave] the article concrete form and extend[ed] it, and the Court's subsequent rulings about the meaning of the directives yielded a body of gender-related policies of substantial scope" (Ostner and Lewis 1995, p. 159). No wonder scholars have characterized the EU as a "state of courts and technocrats" (Leibfried 1992, p. 249) and have highlighted "the rise of the regulatory state in Europe" (Majone 1994, p. 77). In turn, European scholars' awareness of the import of Commission and ECJ regulatory activity has fueled their growing research interest in American-style regulation (Majone 1994; see also Leibfried and Pierson 1995).

Finally, although capture of government regulators by regulated parties can and does occur (see Sabatier 1975; Sanders 1981), it need not. Enactment of regulatory legislation can also lead to cycles of aggressive enforcement alternating with periods of capture or, similarly, to enforcement that oscillates between or among the interests at stake in regulation or between periods of regulation and deregulation or reregulation. For example, over time, FTC enforcement has alternated between favoring big or small business and core or peripheral economic regions of the United States (Stryker 1990). Sanders's (1981) study of natural gas regulation in the United States shows that the initial federal legislation mixed goals of consumer protection and of industry promotion. Federal Power Commission interaction with its environment did not result in stable capture by gas producers but rather in oscillation between capture by gas consumers and capture by gas producers. Clearly, consumers, labor, and other subordinate groups can be, and have been, benefited by regulation (see, e.g., Sanders 1981; Steinberg 1982; Stryker 1989). But the political economy of capitalism also sets structural and cultural limits to these benefits (McCammon 1990; Szasz 1986; Yeager 1990).

In this regard, economic globalization and European economic integration enhance the political and economic resources of business groups at the expense of labor, providing pressures and opportunities for governments to undertake market-liberalizing regulatory reforms (Streeck 1995, 1998; Stryker 1998; Vogel 1996). However, these same processes also may generate counterpressures and counteropportunities. As Streeck (1998) shows, European integration has been a process of economic liberalization by international means. In this process, national-level regulations are exposed to competitive market pressures, including the threat of "regulatory arbitrage"—business corporations moving capital or firms from countries with less favorable regulations to countries with a more favorable regulatory climate. Competitive market pressures then further advance liberalization. But liberalization likewise "calls forth demands" from individuals and communities for market-constraining reregulation, so that they can "cope with the uncertainties of free markets and stabilize their social existence in dynamically changing economic conditions" (Streeck 1998, p. 432).

A major challenge to theories and empirical research on government regulation in the future is to model and explain the historical and comparative dynamics of both economic and social regulation at intersecting subnational, national, and supranational levels. Further work should continue to address diversity and change over time and place in regulatory scope, levels, institutional forms, and cultural justifications. Ideally, further juxtaposition of abstract theory and concrete historical and comparative research, both qualitative and quantitative, can lead to integrated theories of regulatory origins, processes, and impact. Ideally, as well, these theories can explain not just regulation but also deregulation and reregulation. This is a tall order, but the seeds have been planted in scholarship like that of Vogel (1996), which is equally sensitive to economic and organizational interests and resources, to political structures and rules, and to regulatory cultures (see also the empirically informed analytic frameworks offered in, e.g., Scharpf 1997b; Stryker 1996). Seeds also have been planted in research programs, like Vogel's (1996), that are sensitive to periods or cycles in which different economic and other institutional arrangements, incentives, and constraints operate, and to feedback effects from past to future regulatory policies and processes (see also Boyer 1996).

Whether or not such an integrative and synthetic theory is achieved, a combination of unfolding social processes, including globalization, courtled European integration, and democratization and marketization in eastern Europe and elsewhere all will continue to enhance interest in the study of government regulation. All these processes simultaneously promote economic liberalization and the regulatory state. Whatever else these current political-economic changes bring, they certainly should enhance scholarly dialogue and also synergy across national borders in the study of regulation.

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ROBIN STRYKER