Soft Regulation Research Articles

Cost effectiveness of a government supported policy strategy to decrease sodium intake: global analysis across 183 nations

Objective To quantify the cost effectiveness of a government policy combining targeted industry agreements and public education to reduce sodium intake in 183 countries worldwide.Design Global modeling study.Setting 183 countries.Population...

Examining agency governance in the European Union financial sector – a case-study of the European Securities and Markets Authority

Ever since the outset of the financial crisis of 2009, agencies have emerged as key actors of European Union (EU) financial sector governance. As an organisational form that can be insulated from national political pressures, and committed to the Union interest, agencies proliferated in the financial sector ushering the agencification trend in finance. In this sense, the European Securities and Markets Authority (ESMA) – as part of the European Supervisory Authorities – practically embodies this trend. ESMA presents a radical shift in financial markets’ governance due to the nature of its soft law regulations and the direct impact it exerts on addressees’ behaviour in emergency circumstances. But ESMA’s success in optimising financial sector governance largely depends on its legitimacy, which is centred on independence. At the same time independence demands wider participation and inclusiveness of the decision-making process. This is not easy to achieve in a complex system with multiple stakeholders as is the governance of the EU financial sector (e.g., EU institutions, national actors, private sector). This paper examines ESMA’s interinstitutional relations and independence in light of publicly voiced criticism. We find that ESMA’s main executive bodies are still susceptible to influences by Member States as well as EU institutions (i.e., Commission), which undermines its operational independence.

ICT in Health and Finance Global Governance Institutions

This working paper suggest that most global governance institutions in health and finance have developed online services to increase their transparency and efficiency. In other words, these organizations increase the capacity of their members and selected stakeholders to access information, build capacity and take part in decisions. Based on the very nature of ICTs, it is possible to conclude new ICTs have a positive impact on the capacity of marginalized actors to participate in global governance. Through internet and online platforms, marginalized actors take part in multiple participative debates and soft regulation instruments that can enrich or divert the production of public legitimacy. They take part in multiple forums, open debates and collective decision-making processes that enhance information sharing and capacity building.

Editorial

This issue presents a forum on corporate governance and earnings quality. Corporate governance received worldwide attention following colossal corporate collapses around 2001. Subsequently, many countries around the world issued both hard and soft regulations. Regulators around the world not only issued “comply or explain” type governance codes but also enacted new legislation with the aim to protect investors. Naturally, researchers are interested to investigate whether the various corporate governance measures, whether legislated or not, mitigate agency costs in any way.

Migration Intermediaries and Codes of Conduct: Temporary Migrant Workers in Australian Horticulture

Over recent decades, developments in network governance have seen governments around the world cede considerable authority and responsibility to commercial migration intermediaries for recruiting and managing temporary migrant labour. Correspondingly, a by-product of network governance has been the emergence of soft employment regulation in which voluntary codes of conduct supplement hard (enforceable) legal employment standards. This paper explores these developments in the context of temporary migrant workers employed in Australian horticulture. First the paper analyses the growing use of temporary migrant labour in this industry. It then describes how different types of intermediaries interact with this workforce. The paper then outlines both hard and soft employment regulations, and contrasts them with actual employment conditions, questioning how a network governance approach has affected this vulnerable workforce. The paper concludes that changes in network governance of migration and employment relations have emasculated formal legal regulation, leaving market forces to operate without effective or ethical constraints at the expense of the public good.

Bank secrecy in offshore centres and capital flows: Does blacklisting matter?

This study analyses cross-border capital flows in order to verify the existence and direction of the effect of the soft regulation promoted by international organizations against banking secrecy which characterized the so called tax and financial heavens. This effect is called in the literature Stigma Effect, but both the existence and the direction of the stigma effect are far from being obvious. The international capital flows can simply neglect the relevance of the blacklisting, or worst, the attractiveness of banking secrecy can produce a race to the bottom: the desire to elude more transparent regulation can sensibly influence the capital movements. We test whether being included and later excluded from the FATF blacklist is an effective measure that influences countries’ cross-border capital flows. Using annual panel data for the period 1996–2014, we apply our framework to 126 countries worldwide. We find evidence that in general the stigma effect does not exist.

Between national soft regulations and strong economic incentives: local climate and energy strategies in Sweden

This paper contributes to the current discussion on whether ‘soft’ regulation actually influences policy outcomes by examining the effects of national policy instruments on municipal climate and energy planning. Sweden has experienced shifts in the incentive context over the last decades complementing soft planning regulations with stringent conditions for getting national economic support to local energy and climate action. We hypothesize that when soft regulations are surrounded by detailed conditions for getting state support, there will be higher degrees of local institutionalization of climate and energy strategies. The importance of economic support as part of national policy is confirmed by evidence from local energy and climate strategies and from interviews with local decision-makers. We also find that specific municipal features such as earlier municipal engagement in national support programs and relevant inter-municipal networks function as drivers for the institutionalization of local action.

Reconsidering the relevance of social license pressure and government regulation for environmental performance of European SMEs

Whereas social license pressure is held as a strong motive for the corporate social performance (CSP) of large enterprises, it is argued in literature that it will not sufficiently motivate small and medium-sized enterprises (SMEs). In this view, government regulation is the most effective way to improve the environmental performance of SMEs. Other studies argue that social license pressure is also important for SMEs, because of the strong embeddedness of SMEs in their local communities. A large scale empirical study into the effects of social license pressures and government regulation on the environmental performance of SMEs that could help solve this debate is, however, still lacking. This paper contributes to the scientific literature by using structural equation modeling on a sample of 4929 SMEs from twelve European countries to test both views for micro, small, and medium-sized enterprises. Another contribution to scientific literature is that our model includes direct as well as indirect effects from social license pressures on environmental performance. The indirect effects are mediated by perceived market benefits of CSR. The estimation results show that social license pressures, as perceived by SMEs, significantly affect the environmental performance of micro, small, and medium-sized enterprises, directly as well as indirectly through mediation by perceived market benefits of CSP. In all cases, the perceived social license pressure provides a stronger stimulus to improving environmental performance than the motive to comply with government regulation. The policy implication is that governments should not rely on direct regulation of environmental performance only, but also aim to improve the transparency of environmental performance by soft regulations that induce SMEs to publish key performance indicators on environmental issues.

Current Development of Corporate Legislation

Large-scale and permanent changes in the current conjuncture determine the development of lawand legislation. In context of global business, the issue of competing national legal regimes remains topical. Countries develop dynamically and win greatly if they have a comfortable legal environment, which covers securities market and corporate governance. This paper analyzes the current corporateand securities market legislation. The modern Russian corporate law is at the stage of updating andgradual diverse development involving the activity of public and non-public companies, limited liability companies, exercising a shareholder information right. The article stresses the corporate law reform concerning public and non-public corporations in Russia and the legal assessment of modified rules.The objectives of the paper are to identify the challenges faced by the new corporate law and to comprehend to what extent the Russian experience is correlated with the similar processes in other countries and best international practices of corporate governance. Corporate relationships in limited liability corporations still have own specifics. It demonstrates only a technical convergence of the legalregimes for non-public joint stock corporations and limited liability corporations. Improving corporate law is closely related to the formation of the soft law regulation, in particular in corporate governance.

Does the European Employment Strategy favour the convergence of activation policies? The cases of Spain and the United Kingdom

The European Employment Strategy (EES) illustrates the most ambitious attempt to regulate and coordinate employment policies. However, some doubts arise about its capacity to favour convergence in the field of employment due to the regulatory nature of the process, based on the so-called soft regulation. This article aims to contribute to the debate of whether the EES can favour the convergence of employment policies by focusing on the effects of the policy discourse. It analyses the EU discourse on activation developed in the European Employment Strategy (EES) from 1997 to 2010 and its influence in Spain and the United Kingdom by means of a policy frame approach. The conclusions show that we are observing a process of relative ideological convergence of the activation models due to the influence of the EES discourse. However, divergences are still observed at the level of the instruments and methods of activation.

Bank Secrecy in Offshore Centres and Capital Flows: Does Blacklisting Matter?

This study analyses cross‐border capital flows in order to verify the existence and direction of the effect of the soft regulation promoted by international organizations against banking secrecy which characterized the so called tax and financial heavens. This effect is called in the literature Stigma Effect but both the existence and the direction of the stigma effect are far from being obvious. The international capital flows can simply neglect the relevance of the blacklisting, or worst, the attractiveness of banking secrecy can produce a race to the bottom: the desire to elude more transparent regulation can sensibly influence the capital movements. We test whether being included and later excluded from the FATF blacklist is an effective measure that influences countries’ cross‐border capital flows. Using annual panel data for the period 1996‐2014, we apply our framework to 126 countries worldwide. We find evidence that in general the stigma effect does not exist.

Soft Regulation with Crowd Recommendation: Coordinating Self-Interested Agents in Sociotechnical Systems under Imperfect Information.

Regulating emerging industries is challenging, even controversial at times. Under-regulation can result in safety threats to plant personnel, surrounding communities, and the environment. Over-regulation may hinder innovation, progress, and economic growth. Since one typically has limited understanding of, and experience with, the novel technology in practice, it is difficult to accomplish a properly balanced regulation. In this work, we propose a control and coordination policy called soft regulation that attempts to strike the right balance and create a collective learning environment. In soft regulation mechanism, individual agents can accept, reject, or partially accept the regulator’s recommendation. This non-intrusive coordination does not interrupt normal operations. The extent to which an agent accepts the recommendation is mediated by a confidence level (from 0 to 100%). Among all possible recommendation methods, we investigate two in particular: the best recommendation wherein the regulator is completely informed and the crowd recommendation wherein the regulator collects the crowd’s average and recommends that value. We show by analysis and simulations that soft regulation with crowd recommendation performs well. It converges to optimum, and is as good as the best recommendation for a wide range of confidence levels. This work sheds a new theoretical perspective on the concept of the wisdom of crowds.

A bridge too far? Analysis of the European Commission’s new developments on media policy and media freedoms through the concept of soft regulation

Abstract This article tries to examine the latest European Commission (EC) policy developments in the media sector through the new concept of soft regulation. Much criticized for its media policy approaches, the EC seems to try to rebuild media freedom and media pluralism protection foundations at the EU level with several new initiatives based on soft regulation. This article analyses these soft-regulatory media policy actions to answer the following questions: Have soft-regulatory measures been a good option to improve media pluralism policy at the EU level? Are there better mechanisms that EU can employ to assist Member States in promoting media pluralism? The aim of the research is to see whether these new EC debates and softregulatory initiatives have made a real change in the traditional way that EC has been dealing with audio-visual matters or whether it is only repeating old answers to old questions.

The Paradoxes of Decent Work in Context: A Cultural Political Economy Perspective

Scientific discourses of decent work can be roughly grouped into two main lines of interpretation. The first, optimistic line sees the International Labour Organisation’s (ILO) decent work agenda as indicative of counter-hegemonic forces successfully injecting post-neo-liberal norms into global labour regulation. Specifically, feminist scholars have welcomed the emergence of decent work, because of its explicit concern with non-standard work, informal labour and care work. The second, more pessimistic line is critical of the decent work agenda, seeing it as compatible with or even reinforcing neo-liberal hegemony, especially because of its embrace of soft labour regulation and corporate social responsibility. This article aims to analyse the paradoxes of decent work by putting this discourse in its historical and theoretical context. The article first draws on the framework of Cultural Political Economy (CPE) to identify competing ‘economic imaginaries’ of decent work. Two prominent interpretations will be juxtaposed to outline a ‘feminist’ and a ‘business case’ decent work imaginary. Second, the article interrogates two different ILO initiatives, each of which is underpinned by one of these decent work imaginaries, in terms of the ways they may challenge or reinforce neo-liberal hegemony – the Domestic Workers Convention and the Better Work Programme.

Правовое регулирование трансграничного представительства

The author assesses the main international treaties in the sphere of representation: the Hague convention on the law applicable to agency 1978, the Geneva convention on agency in the international sale of goods 1983, acts of soft law (UNIDROIT Principles of international commercial contracts, Model commercial agency contract and Guide for the drawing up commercial agency contracts of International Chamber of Commerce), Directives and Regulations of the European Union, Principles of European contract law, Draft common frame of reference. The author concludes about necessity of drafting at the universal level a document of soft law (in the form of a model law) containing the substantive rules on internal and external relationships of a commercial representation.

Greening the Street-Level Procurer: Challenges in the Strongly Decentralized Swedish System

This article investigates the every-day street-level practice of green public procurement (GPP) in Sweden, a country with one of the most decentralized systems of public administration within the European Union (EU). The street-level procurement officers in Swedish local and regional government are in charge of purchases estimated to represent between 10% and 15% of Sweden’s GDP. This article examines the constraining and enabling factors behind the individual procurement officer’s choice of green procurement in textiles and clothing through a combination of qualitative interviews and a review of documentary sources. The analysis shows that while indirect support through European and national soft regulation and policy advice is imperative for “greening” procurement, the direct factors which influence the local outcome of GPP comprises factors on the local level: political commitment and environmental knowledge, the organizational structure of local government and the local interpretation of the regulatory framework. This study shows that a decentralized structure has possibilities of furthering ambitions of buying green if there are committed politicians and public officials, an optimal level of internal centralisation and an external support structure of knowledge and enabling rules.

The global prospects of taxation

As the process of establishing international economic and financial relations between national economies is on the rise, many states encounter substantial difficulties in the process of collecting their tax claims. The most powerful countries in the world try to overcome this controversy by changing the international tax rules. The turning point was the financial-economic crisis of2008-2009, when the international community more vigorously embarked on resolving international tax issues. The OECD, the G20, the UN, the EU and a number of other powerful international organizations continued their activities on establishing a stronger framework of the international tax system. Global tax initiatives embodied in the soft law regulations have changed (to a varied extent) the structure of national tax systems as well as the direction of national policies, and ultimately undermined the financial foundations of the social welfare state. The world's 'taxation landscape' is indisputably dominated by two major processes embodied in the concepts of tax harmonization and tax competition. The global crisis in financing contemporary states has weakened their resistance towards more extensive international tax cooperation. As a result, they increasingly accept global tax standards and are more vigorously involved in the international exchange of tax information for the purpose of counteracting international tax fraud. Changes in national tax systems are necessarily accompanied by changing relations between tax administrations and multinational companies as large taxpayers. The traditional public law relations are gradually changed by introducing some elements of 'negotiations and mutual agreement', which are aimed at strengthening mutual trust and avoiding unnecessary disputes and costs. Although they are currently no more than theoretical assumptions and political considerations, there are proposals for introducing global taxes and establishing the world tax organization. Irrespective of the idealistic or utopian nature of these proposals, we simply cannot rule out the possibility that a future world disaster may serve as an valid excuse for accepting global taxes in order to remove the detrimental consequences of a force majeure. In that context, there is a growing number of countries that have been accepting the global tax standard on the automatic exchange of financial information, which has laid a solid legal and technical ground for introducing global taxation. The 'global taxation network' is gradually extending to all tax payers, featuring full fiscal transparency. Unless such global plans are undermined, all natural and legal persons will de lege ferenda become prisoners of the global fiscus. Unfortunately, such an apocalyptic future of taxation is quite probable considering the determination of the powerful international organizations and the world elite acting through these institutions to implement the global political agenda.

Corporate Governance Soft Law Regulations from a Social Norm Perspective

Purpose: This study applies the concept of social norm dynamics to explain how corporate governance soft law is enforced. Design/methodology/approach: Using data of German listed stock companies and of economic media coverage between 2001 and 2010, we observe the complex relationship between sanctions and behavior in the social context of corporate governance soft law. Findings: We find that the public discussion of normative demands related to corporate governance issues increases if firms do not comply with the German Corporate Governance Code. We show that groups of actors, such as DAX companies, represent the addressees of normative demands, i.e., targets of expectations about what is appropriate and what is not. We also find that normative demands tend to be personalized, as public discussion is greater when initiated by a specific individual or firm. Finally, we demonstrate that social control in terms of public sanctioning positively influences a firm’s compliance with the soft law, whereby negative statements (disapproval) outweigh the effects of positive statements (approval). Originality/ value: We corroborate the social character of normative demands in the context of corporate governance soft law, and contribute to a better understanding of why soft law can work despite its having no legally binding force. The results of our study suggest that sanction mechanisms in the context of social norms underpin the strength of soft law as an alternative to, or extension of, hard law.

The Determinants of the Introduction of Soft Law Regulation: The case of Basel Accord

The Determinants of the Introduction of Soft Law Regulation: The case of Basel Accord

The Impact of Alternative Public Policies on the Deployment of New Communications Infrastructure A Survey

Our survey reviews the theoretical and empirical literature on all alternative policies to promote the deployment of new fiber-based communications infrastructure. Since such investment is expected to induce substantial positive externalities, dynamic efficiency becomes a particularly important policy goal. The available policies refer to i) different kinds of ex ante sector-specific regulations including cost-based access regulations as well as softer regulations such as regulatory holidays or geographically differentiated regulations, ii) deregulatory approaches based on effective competition law implementation and competitive market structures including allowance of co-investment models, and iii) public subsidies to cover non-profitable (“white”) areas. Our survey identifies the most significant research gaps, finding that numerous studies related to the impact of access regulations exist, whereas only a much smaller branch of literature addresses the impact of competition policies, and even fewer studies analyze the impact of public subsidies on new communications deployment. Moreover, our work allows for a generic framework for policy recommendations that identifies the comparative advantages of the individual policy options for different market structures and for varying degrees of externalities. We find that public subsidies are the dominant policy alternative in white areas, whereas access regulations can be the preferred policy in white or “grey” areas, where only monopoly structure or co-investment models lead to private investment. Deregulatory policies might be preferable in grey areas, if there is sufficient pressure from competitive outside options and if competition law is strong. Finally, deregulatory policies including soft regulation are the dominant policy in “black” areas, where several independent infrastructure operators exist.