ENGAGING BUSINESS IN THE REGULATION OF NANOTECHNOLOGY

Abstract

While holding great promise, nanotechnology also raises concerns about currently unknown health and environmental risks. The lack of information about these potential risks poses distinct challenges for regulators, who need a clear understanding about problems in order to solve them. Under such circumstances of information scarcity, a strong case can be made for having regulators engage with business and even delegate responsibility for uncovering and avoiding risks, as the firms themselves possess an informational advantage over government. In this chapter, I review what researchers have learned about engaging business in regulation, with the goal of informing future decisionmaking about how to respond to nanotechnology. Specifically, I consider the available evidence on the conditions for the effective use of flexible regulatory instruments, governmental voluntary programs, nongovernmental voluntary regimes, and industry self-regulation. To date, the regulatory responses to nanotechnology’s potential risks have been primarily voluntary and industry-based, with firms playing the central role in nanotechnology risk management. Yet the same lack of information that makes such industry-based responses attractive also makes it difficult to ensure that businesses will act in a socially optimal manner. In the end, the forms of engagement or delegation that initially appear attractive for managing nanotechnology’s risks will also present inherent difficulties in ensuring effective risk management - or at least it will be difficult for regulators or the public to know whether these approaches are indeed effective.