Trust and cooperation over the public–private divide: an empirical study on trust evolving in co-regulation

Public regulators increasingly cooperate with self-regulating industries regarding their oversight activities such as standard setting, information gathering, and sanctioning. The effectiveness of this “co-regulation†has been discussed extensively in the past decade, albeit usually with the government’s perspective in mind. This contribution focuses on the emergence and maintenance of co-regulation as an interaction process in which public regulators and self-regulating industry are involved. This process provides explanations for the effectiveness of co-regulation. This chapter takes “trust†and “cooperation†as the core variables. They are perceived as mutually dependent. The interplay between trust and cooperation is coined “trust-in-action†. It is assumed to be embedded in institutional arrangements, but may produce these arrangements as well. Two case studies show the complex interaction processes among public regulators, self-regulating industries, and intermediaries. The cases involve the regulatory regime on the quality of Dutch eggs and the regime concerning the reliability of Dutch temporary employment agencies. Both case studies start with public and private trust in co-regulation, expressed in institutional arrangements. However, in one of the cases this trust-on-paper did not find fertile ground on an operational level, while in the other it did. The cases confirm that on an operational level, trust is both an enabler and a result of cooperation. However, this mutual reinforcement process of trust and cooperation needs to be supported by institutional arrangements made on a political level. These institutional arrangements can be artifacts of distrust rather than trust.