Julia black

Legitimacy and the Competition for Regulatory Share

Julia Black

LSE Law, Society and Economy Working Papers 14/2009
London School of Economics and Political Science Law Department

This paper can be downloaded without charge from LSE Law, Society and Economy Working Papers at: www.lse.ac.uk/collections/law/wps/wps.htm and the Social Sciences Research Network electronic library at:http://ssrn.com/abstract=1424654. © Julia Black. Users may download and/or print one copy to facilitate their private study or for non-commercial research. Users may not engage in further distribution of this material or use it for any profit-making activities or any other form of commercial gain.

Julia Black

Legitimacy and the Competition for Regulatory Share

Legitimacy and the Competitionfor Regulatory Share

Julia Black *

Abstract: Legitimacy is not just a normative challenge for regulators; it is also a functional one. Without legitimacy, regulators will not be able to motivate others to accept and support their regulatory strategies. Regulators, therefore, have to attempt to create and manage their own legitimacy. Legitimacy management is a key issue in particular fornon-state regulators that lack a legally given monopoly or mandate to regulate, for they have to persuade others to comply with their norms. Moreover, they may have to compete for ‘regulatory share’; in other words, they may have to compete against other regulators in an attempt to ensure that others ‘buy’ their regulations rather than those of their competitor. This paper argues that legitimacy is akey element in this competition for regulatory share. The paper distinguishes between exportbased and import-based strategies of regulatory competition, and identifies different strategies for managing legitimacy in an attempt to gain regulatory share. It goes on to suggest that in order to understand the role of legitimacy in this dynamic, we need a particular conception of legitimacy. Legitimacyshould be conceptualized not as an attribute or a resource, but as an endowment. Regulators can try to gain legitimacy and can do so in the context of a competition for regulatory share, but whether they get it and from whom depend on the assessments of their various legitimacy communities. Despite the organisation’s best efforts, legitimacy may not be forthcoming at all from those legitimacycommunities from whom it is sought, thus limiting the regulator’s ability to expand its regulatory share.

INTRODUCTION
For some time, the governance debate has been at the stage of discovery. Governance writers have been like naturalists exploring the flora and fauna of an uncharted territory. New species of governance arrangements are being identified on a regular basis. Complex (and competing)systems of classification are being developed using a

*

Law Department, LSE. The ideas in this paper have been discussed in a number of fora; notably the ESRC funded series on Administrative Justice, run by Michael Adler, presentations to the Law Faculties of Melbourne and Sydney in April 2007, and to the Socio-Legal Studies Association Conference in Montreal, May 2008. The article draws onthe analysis published in J. Black, ‘Constructing and Contesting Legitimacy and Accountability in Polycentric Regulatory Regimes’ (2008) 2 Regulation and Governance 1, but extends that analysis in several respects. I am grateful to all those who have commented on the ideas expressed at various points for their contributions, and to Rob Baldwin for commenting on a previous draft. The usualresponsibilities remain my own.

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range of criteria, and complicated exercises of taxonomy are engaged as each new species of governance arrangement is classified. Gradually the explorers are beginning to analyse the habits and habitus of these newly discovered species. How do they work? What are their internal dynamics? How do they get others to recognize them? How do they interact with...