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When risk‐based regulation aims low: Approaches and challenges

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  • Julia Black
  • Robert Baldwin

Abstract

Risk‐based regulation is becoming a familiar regulatory strategy in a wide range of areas and countries. Regulatory attention tends to focus, at least initially, on high risks but low‐risk regulatees or activities tend to form the bulk of the regulated population. This article asks why regulators need to address low risks and it outlines the potential difficulties that such risks present. It then considers how regulators tend to deal with lower risks in practice. A body of literature and survey‐based research is used to develop a taxonomy of intervention strategies that may be useful in relation to low‐risk activities, and, indeed, more widely. In an article to be published in the subsequent issue of this journal, we will then develop a strategic framework for regulators to employ when choosing intervention strategies and we will assesses whether, and how, such a framework could be used by regulatory agencies in a manner that is operable, dynamic, transparent, and justifiable.

Suggested Citation

  • Julia Black & Robert Baldwin, 2012. "When risk‐based regulation aims low: Approaches and challenges," Regulation & Governance, John Wiley & Sons, vol. 6(1), pages 2-22, March.
    • Handle: RePEc:wly:reggov:v:6:y:2012:i:1:p:2-22
    DOI: 10.1111/j.1748-5991.2011.01124.x
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    References listed on IDEAS

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    1. Giandomenico Majone, 2002. "The Precautionary Principle and its Policy Implications," Journal of Common Market Studies, Wiley Blackwell, vol. 40(1), pages 89-109, March.
    2. Sunstein,Cass R., 2002. "Risk and Reason," Cambridge Books, Cambridge University Press, number 9780521791991.
    3. Black, Julia & Baldwin, Robert, 2010. "Really responsive risk-based regulation," LSE Research Online Documents on Economics 27632, London School of Economics and Political Science, LSE Library.
    4. Hood, Christopher & Rothstein, Henry & Baldwin, Robert, 2004. "The Government of Risk: Understanding Risk Regulation Regimes," OUP Catalogue, Oxford University Press, number 9780199270019.
    5. Productivity Commission, 2009. "Performance Benchmarking of Australian and New Zealand Business Regulation - Food Safety," Research Reports, Productivity Commission, Government of Australia, number 38, January.
    6. Baldwin, Robert & Cave, Martin & Lodge, Martin (ed.), 2010. "The Oxford Handbook of Regulation," OUP Catalogue, Oxford University Press, number 9780199560219.
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    Cited by:

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    3. Kristian Krieger, 2013. "The limits and variety of risk‐based governance: The case of flood management in Germany and England," Regulation & Governance, John Wiley & Sons, vol. 7(2), pages 236-257, June.
    4. Henry Rothstein & Olivier Borraz & Michael Huber, 2013. "Risk and the limits of governance: Exploring varied patterns of risk‐based governance across Europe," Regulation & Governance, John Wiley & Sons, vol. 7(2), pages 215-235, June.
    5. Mauricio I. Dussauge‐Laguna & Alejandra Elizondo & Camilo Ignacio González & Martin Lodge, 2024. "Regulation and development: Theoretical contributions and empirical lessons from Latin America," Regulation & Governance, John Wiley & Sons, vol. 18(2), pages 331-347, April.
    6. Juan Carlos Henao & Carmen Eloísa Ruiz López, 2018. "Corrupción en Colombia Tomo 3 Corrupción privada," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1026.
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    More about this item

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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