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The Institutional Foundations of Regulatory Capitalism: The Diffusion of Independent Regulatory Agencies in Western Europe

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  • Fabrizio Gilardi

    (University of Lausanne, Switzerland)

Abstract

This article studies the diffusion of the main institutional feature of regulatory capitalism, namely, independent regulatory agencies. While only a few such authorities existed in Europe in the early 1980s, by the end of the twentieth century they had spread impressively across countries and sectors. The analysis finds that three classes of factors (bottom-up, top-down, and horizontal) explain this trend. First, the establishment of independent regulatory agencies was an attempt to improve credible commitment capacity when liberalizing and privatizing utilities and to alleviate the political uncertainty problem, namely, the risk to a government that its policies will be changed when it loses power. Second, Europeanization favored the creation of independent regulators. Third, individual decisions were interdependent, as governments were influenced by the decisions of others in an emulation process where the symbolic properties of independent regulators mattered more than the functions they performed.

Suggested Citation

  • Fabrizio Gilardi, 2005. "The Institutional Foundations of Regulatory Capitalism: The Diffusion of Independent Regulatory Agencies in Western Europe," The ANNALS of the American Academy of Political and Social Science, , vol. 598(1), pages 84-101, March.
    • Handle: RePEc:sae:anname:v:598:y:2005:i:1:p:84-101
    DOI: 10.1177/0002716204271833
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    References listed on IDEAS

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    Cited by:

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    3. Strausz, Roland, 2009. "The political economy of regulatory risk," SFB 649 Discussion Papers 2009-040, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    4. Calzada, Joan & Diaz-Serrano, Luis, 2023. "Conflicting national policies: The creation of the euro and the rebalancing of telecommunications prices," Telecommunications Policy, Elsevier, vol. 47(1).
    5. Leon Wansleben, 2021. "Divisions of regulatory labor, institutional closure, and structural secrecy in new regulatory states: The case of neglected liquidity risks in market‐based banking," Regulation & Governance, John Wiley & Sons, vol. 15(3), pages 909-932, July.
    6. Tomic, Slobodan & Dragicevic, Ognjen, 2023. "An Unexpected Fate of a Regulatory State at the EU’s Gate: Internationalisation and Non-Consolidation of the Serbian Regulatory State," SocArXiv 7g9zx, Center for Open Science.
    7. Jacint Jordana & David Levi-Faur, 2005. "The Diffusion of Regulatory Capitalism in Latin America: Sectoral and National Channels in the Making of a New Order," The ANNALS of the American Academy of Political and Social Science, , vol. 598(1), pages 102-124, March.
    8. Seung‐Hun Hong & Jong‐sung You, 2018. "Limits of regulatory responsiveness: Democratic credentials of responsive regulation," Regulation & Governance, John Wiley & Sons, vol. 12(3), pages 413-427, September.
    9. Liam Clegg, 2019. "Economic geography and the regulatory state: Asymmetric marketization of social housing in England," Environment and Planning A, , vol. 51(7), pages 1479-1498, October.
    10. Covadonga Meseguer, 2005. "Policy Learning, Policy Diffusion, and the Making of a New Order," The ANNALS of the American Academy of Political and Social Science, , vol. 598(1), pages 67-82, March.
    11. Emmanuelle Mathieu & Koen Verhoest & Joery Matthys, 2017. "Measuring multi‐level regulatory governance: Organizational proliferation, coordination, and concentration of influence," Regulation & Governance, John Wiley & Sons, vol. 11(3), pages 252-268, September.

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