Governing complex societal problems: The impact of private on public regulation through technological change.

Nicolas Schmid,Leonore Haelg,Tobias S. Schmidt,Sebastian Sewerin,Irina Simmen

doi:10.1111/rego.12314

Abstract

When addressing complex societal problems, public regulation is increasingly complemented by private regulation. Extant literature has provided valuable insights into the effectiveness of such complex governance structures, with most empirical studies focusing on how public regulation influences private regulation. Conversely, the impact of private on public regulation is less well studied. Here, we investigate this impact with a focus on technological change as possible mechanism. Based on a case study of energy efficiency in buildings in Switzerland, we find evidence of a symbiotic interaction between public and private regulation that leads to ratcheting‐up of regulatory stringency. We identify technological change as the mechanism linking private and public regulation. We discuss the relevance of our findings for governance literature and regulators.

Highlights

Societies face increasingly complex and dynamic problems, with climate change being one of the most notable examples of such “super-wicked” problems (Levin et al 2012)
Based on a case study of energy efficiency in buildings in Switzerland, we find evidence of a symbiotic interaction between public and private regulation that leads to ratcheting-up of regulatory stringency
We explored whether technological change can explain this impact

Summary

Introduction

Societies face increasingly complex and dynamic problems, with climate change being one of the most notable examples of such “super-wicked” problems (Levin et al 2012) To address these problems, complex governance structures have emerged in which traditional public regulations (i.e. mandatory command-and-control instruments) are complemented by private regulations (i.e. voluntary market-based instruments) (Cashore 2002; Potoski & Prakash 2005; Loorbach 2010). Complex governance structures have emerged in which traditional public regulations (i.e. mandatory command-and-control instruments) are complemented by private regulations (i.e. voluntary market-based instruments) (Cashore 2002; Potoski & Prakash 2005; Loorbach 2010) This has resulted in complex and polycentric structures of governance (Levi-Faur 2006; Meadowcroft 2007; Jordan et al 2015). The reverse effect, that is the impact of private regulation on public regulation, remains understudied (Malhotra et al 2019)

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