IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v183y2022ics0040162522004036.html
   My bibliography  Save this article

Exploring how interest groups affect regulation and innovation based on the two-level games: The case of regulatory sandboxes in Korea

Author

Listed:
  • Lee, Sungdo
  • Seo, Yongseok

Abstract

The rapid development of science and technology creates sharp conflicts between interest groups and government delays in regulation. This study explores how interest groups affect government delays in regulation, considering the influence of interest groups as a fundamental cause of conflicts related to new technology development. As an analytical frame, we adopted Robert Putnam (1988)'s two-level game model, which analyzes negotiations between countries in international politics. Using the Korean regulatory sandbox as a case study, we explored how interest groups affect government delays in regulation. The regulatory sandbox is designed to preemptively test new technology that existing laws and systems did not expect in the real market and improve regulatory measures based on the results. This research placed emphasis on shedding light on the mechanism of how interest groups influence inter-ministerial regulatory policy negotiations within governments, an area previously unexplored. Through this, the characteristics of inter-ministerial new technology in negotiations have been conceptualized into ten new propositions. Using these propositions, it was confirmed that negotiation outcomes were dictated by four typologies: ‘mutual cooperation’, ‘active acceptance for new technology’, ‘passive acceptance for new technology’, and ‘adversarial opposition type’.

Suggested Citation

  • Lee, Sungdo & Seo, Yongseok, 2022. "Exploring how interest groups affect regulation and innovation based on the two-level games: The case of regulatory sandboxes in Korea," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    • Handle: RePEc:eee:tefoso:v:183:y:2022:i:c:s0040162522004036
    DOI: 10.1016/j.techfore.2022.121880
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162522004036
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2022.121880?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eric Brown & Dóra Piroska, 2022. "Governing Fintech and Fintech as Governance: The Regulatory Sandbox, Riskwashing, and Disruptive Social Classification," New Political Economy, Taylor & Francis Journals, vol. 27(1), pages 19-32, January.
    2. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    3. Andrew B. Whitford & Derrick Anderson, 2021. "Governance landscapes for emerging technologies: The case of cryptocurrencies," Regulation & Governance, John Wiley & Sons, vol. 15(4), pages 1053-1070, October.
    4. Esther C. van der Waal & Alexandra M. Das & Tineke van der Schoor, 2020. "Participatory Experimentation with Energy Law: Digging in a ‘Regulatory Sandbox’ for Local Energy Initiatives in the Netherlands," Energies, MDPI, vol. 13(2), pages 1-21, January.
    5. Richard A. Posner, 1974. "Theories of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 335-358, Autumn.
    6. Veseli, Argjenta & Moser, Simon & Kubeczko, Klaus & Madner, Verena & Wang, Anna & Wolfsgruber, Klaus, 2021. "Practical necessity and legal options for introducing energy regulatory sandboxes in Austria," Utilities Policy, Elsevier, vol. 73(C).
    7. Prieger, James E., 2007. "Regulatory delay and the timing of product innovation," International Journal of Industrial Organization, Elsevier, vol. 25(2), pages 219-236, April.
    8. Trochim, William M. K., 1989. "Outcome pattern matching and program theory," Evaluation and Program Planning, Elsevier, vol. 12(4), pages 355-366, January.
    9. Richard A. Posner, 1971. "Taxation by Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 22-50, Spring.
    10. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(3), pages 427-460, July.
    11. Jean-Frédéric Morin, 2010. "The Two-Level Game of Transnational Networks: The Case of the Access to Medicines Campaign," International Interactions, Taylor & Francis Journals, vol. 36(4), pages 309-334, November.
    12. Péter Fáykiss & Dániel Papp & Péter Sajtos & Ágnes Tõrös, 2018. "Regulatory Tools to Encourage FinTech Innovations: The Innovation Hub and Regulatory Sandbox in International Practice," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(2), pages 43-67.
    13. Alaassar, Ahmad & Mention, Anne-Laure & Aas, Tor Helge, 2020. "Exploring how social interactions influence regulators and innovators: The case of regulatory sandboxes," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    14. Jones, Laura, 2015. "Cutting Red Tape in Canada: A Regulatory Reform Model for the United States?," Annals of Computational Economics, George Mason University, Mercatus Center, November.
    15. Upendra Nath Shukla & Anil Dubey, 2022. "Expectations of FinTech start-ups and regulatory sandbox in India: an empirical study," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 27(2), pages 242-262.
    16. Bonnín Roca, Jaime & Vaishnav, Parth & Morgan, M.Granger & Mendonça, Joana & Fuchs, Erica, 2017. "When risks cannot be seen: Regulating uncertainty in emerging technologies," Research Policy, Elsevier, vol. 46(7), pages 1215-1233.
    17. Peltzman, Sam, 1976. "Toward a More General Theory of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 19(2), pages 211-240, August.
    18. Nihit Goyal & Michael Howlett & Araz Taeihagh, 2021. "Why and how does the regulation of emerging technologies occur? Explaining the adoption of the EU General Data Protection Regulation using the multiple streams framework," Regulation & Governance, John Wiley & Sons, vol. 15(4), pages 1020-1034, October.
    19. Dubois, Anna & Gadde, Lars-Erik, 2002. "Systematic combining: an abductive approach to case research," Journal of Business Research, Elsevier, vol. 55(7), pages 553-560, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Soltanzadeh, Javad & Blind, Knut & Elyasi, Mehdi, 2023. "Exploring how regulators face platform business issues in the lifecycle stages: Evidence of iranian ride-hailing platform business," Telecommunications Policy, Elsevier, vol. 47(7).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harold Mulherin, J., 2007. "Measuring the costs and benefits of regulation: Conceptual issues in securities markets," Journal of Corporate Finance, Elsevier, vol. 13(2-3), pages 421-437, June.
    2. James W. Hughes & Michael J. Moore & Edward A. Snyder, 2002. ""Napsterizing" Pharmaceuticals: Access, Innovation, and Consumer Welfare," NBER Working Papers 9229, National Bureau of Economic Research, Inc.
    3. Simshauser, Paul & Akimov, Alexandr, 2019. "Regulated electricity networks, investment mistakes in retrospect and stranded assets under uncertainty," Energy Economics, Elsevier, vol. 81(C), pages 117-133.
    4. Alejandro Castaneda, 2020. "Cronies, Rents, and Import Licenses: Non-tariff Trade Controls throughout Import Substitution Industrialization (ISI) in Mexico," Tiempo y Economía, Universidad de Bogotá Jorge Tadeo Lozano, vol. 7(2), pages 90-118, July.
    5. Connelly, J. Thomas & Limpaphayom, Piman & Nguyen, Hien T. & Tran, Thanh D., 2017. "A tale of two cities: Economic development, corporate governance and firm value in Vietnam," Research in International Business and Finance, Elsevier, vol. 42(C), pages 102-123.
    6. Petar Stankov, 2017. "Economic Freedom and Welfare Before and After the Crisis," Springer Books, Springer, number 978-3-319-62497-6, December.
    7. VanHoose, David, 2011. "Systemic Risk and Macroprudential Bank Regulation: A Critical Appraisal," Journal of Financial Transformation, Capco Institute, vol. 33, pages 45-60.
    8. Mina Baliamoune-Lutz & Stefan Lutz, 2010. "Pre-emption, Predation, and Minimum Quality Standards," International Economic Journal, Taylor & Francis Journals, vol. 24(1), pages 111-123.
    9. Mathew McCubbins & Thomas Schwartz, 1985. "The politics of flatland," Public Choice, Springer, vol. 46(1), pages 45-60, January.
    10. Birke, Franziska, 2007. "Universaldienstregulierung in der Telekommunikation heute: Herausforderungen, Chancen und Risiken ; ein historischer Ansatz," Discussion Papers 114, University of Freiburg, Institute for Transport Economics and Regional Policy.
    11. Rotoli, Francesco & Valeri, Eva & Ricci, Stefano & Rizzetto, Luca & Malavasi, Gabriele, 2018. "An analysis of the railway access charges regime in the Italian context," Transport Policy, Elsevier, vol. 64(C), pages 20-28.
    12. Dennis W. Carlton & Randal C. Picker, 2014. "Antitrust and Regulation," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 25-61, National Bureau of Economic Research, Inc.
    13. Bel, Germà, 2020. "Public versus private water delivery, remunicipalization and water tariffs," Utilities Policy, Elsevier, vol. 62(C).
    14. Estache, Antonio & Wren-Lewis, Liam, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," CEPR Discussion Papers 8082, C.E.P.R. Discussion Papers.
    15. Mirucki, Jean, 1980. "Comportement de l'entreprise réglementée: étude de l'hypothèse Averch-Johnson [Behavior of the Regulated Firm: A Study of the Averch-Johnson Hypothesis]," MPRA Paper 27669, University Library of Munich, Germany, revised 1982.
    16. Christensen, Hans B. & Liu, Lisa Yao & Maffett, Mark, 2020. "Proactive financial reporting enforcement and shareholder wealth," Journal of Accounting and Economics, Elsevier, vol. 69(2).
    17. Jensen, Olivia & Wu, Xun, 2017. "The hybrid model for economic regulation of water utilities: Mission impossible?," Utilities Policy, Elsevier, vol. 48(C), pages 122-131.
    18. Eriksson, Ross C & Kaserman, David L & Mayo, John W, 1998. "Targeted and Untargeted Subsidy Schemes: Evidence from Postdivestiture Efforts to Promote Universal Telephone Service," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 477-502, October.
    19. Miravete, Eugenio & Seim, Katja & Thurk, Jeff, 2013. "Complexity, Efficiency, and Fairness of Multi-Product Monopoly Pricing," CEPR Discussion Papers 9641, C.E.P.R. Discussion Papers.
    20. Spiller, Pablo T., 2013. "Transaction cost regulation," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 232-242.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:183:y:2022:i:c:s0040162522004036. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.