Legitimacy and the Competition for Regulatory Share - J. Black
the legitimacy of those regimes and the particular regulator in question. But although
legitimacy is central to motivating behaviour in all regulatory regimes, it is particularly
critical for non-state regulators who do not necessarily have the legitimacy of the state
or supranational or international settlement to fall back on. For them, satisfying
multiple legitimacy communities (or rather a certain set of legitimacy communities) is
particularly necessary if their authority is to be recognized and accepted, and thus for
their continued survival as a regulatory body. State-based regulators can borrow on
the authority of the state or the international legal regime to bolster their legitimacy
claims, but non-state regulators need to build legitimacy from the start.
Legitimacy is therefore essential to the regulator’s ability to function effectively,
in other words to be able to regulate others. But there is an added dimension to the
need for legitimacy. It is that more than one NSR can be trying to regulate others who
are operating in the same regulatory domain. Often, as Meidinger notes, a code
sponsored by a non-governmental organisation is countered by one sponsored by
industry. Thus in forest stewardship, for example, there are two main NSRs – the
FSC, the industry-sponsored Program for Endorsement of Forest Certification.
the competition may not fall so neatly into industry versus non-industry. In the realm
of fair trade, for example, both the Fair Trade Labelling Organisation and the World
Fair Trade Organisation have sets of standards and certification processes, which
although they serve similar markets and seek to make the same kinds of appeals to
consumers, are based on different approaches to Fair Trade monitoring and
certification. Regulators, particularly NSRs, thus may find they have to compete with
each other for ‘regulatory share’. In this competition, legitimacy can play a key role.
COMPETING FOR REGULATORY SHARE
The idea that non-state regulators have to compete for regulatory share might sound
an odd notion to administrative lawyers, who by their nature focus largely on state
based regulators that form part of the administrative structures of government. These
state regulators may have to ‘compete’ with other regulators in other jurisdictions in
order to attract business, and they may overlap or otherwise have to coordinate with
other regulators in the same jurisdiction, for example the concurrent competition
powers of sectoral regulators and the OFT or overlapping responsibilities for water
quality between the Environment Agency and Ofwat, but they do not have to
compete with each other to try to get firms or others to follow their rules rather than
those of another regulator. They do have to ensure that firms abide by the regulatory
rules and not their own organisational or industry norms, but as organisations, their
regulatory remits are secure, because they are legally defined and sanctioned. Some
See in particular Tyler, n 39 above (1990 and 1997); Braithwaite and M. Reinhart, n 39 above;
Braithwaite, Braithwaite, Gibson, and Makkai, n 39 above. See also A. Chayes and D. Shelton,
‘Commentary: MultiLateral Arms Control’ in D. Shelton (ed), Commitment and Compliance: The Role of Non-
Binding Norms in the International Legal System (Oxford: Oxford University Press, 2000).
Meidinger, n 1 above; see also Abbot and Snider, n 1 above.
Julia Black Legitimacy and the Competition for Regulatory Share
non-state regulators, such as the GMC, are in a similar position in that they have been
granted a legal monopoly to regulate a certain group of people (doctors).
Moving beyond the boundaries of state-based or state-sanctioned regulators,
however, there is a plethora of non-state organisations which attempt to regulate
firms or others in accordance with a set of norms, and which have no state
endorsement or backing at either national or international level. There are multiple
examples at the transnational level, such as the Fair Trade Labelling Organisation, the
Forest Stewardship Council and the Marine Stewardship Council. At the national
level, within the UK there are both industry and non-industry based codes. In the area
of food, for example, there is the Red Tractor logo of the Assured Food Standards
organisation, as well as the non-industry based RSPCA’s ‘Freedom Food’ certification
and labelling scheme. It is open to industry to seek OFT approval of their Codes, but
this does not give them legal force and is in any case voluntary.
The codes and practices of NSRs are usually discussed either as manifestations of
the phenomenon of governance or decentring, or in terms of the challenges of
decentred regulation outlined above: functionally -- how effective are they in changing
industry behaviour; normatively -- do they only further the self-interest of their
member firms or do they seek to pursue a broader social goal; constitutionally -- what
challenges do they pose to constitutional norms such as accountability; or systemically
-- how do their ‘soft’ law norms interact with ‘hard’ law and what does this interaction
and fragmentation mean for our understanding of ‘law’ and law’s understanding of
What I am suggesting here is that, in addition to those discussions, we see the
regulatory norms themselves as part of a dynamic process by their sponsoring
organisations to expand the regulator’s ‘regulatory reach’. Where the organisation is
the sole body producing norms in a particular domain or sector, then their challenge is
to get industry or other organisations to recognize and comply with those norms.
Where they are not the sole body producing norms which purport to govern a
particular sector or activity (ie food production, animal welfare, accounting norms),
then the NSR may be implicitly or explicitly in competition with other organisations,
which may in turn be either state-based or state-sanctioned regulators or non-state
regulators. In these circumstances, the challenge for the non-state regulators (NSRs) is
not just to gain compliance as such, but to compete against other rival regulators in a
battle for ‘regulatory share’.
This idea that non-state regulators compete for regulatory share is unfamiliar to
administrative law discourse (as it is to much regulatory discourse as well), and as such
requires some unpacking. The argument runs like this: I have argued above that
organisations need legitimacy to survive, but that there are multiple legitimacy
communities, each with competing legitimacy claims. NSRs need to gain legitimacy
from those they seek to regulate. Frequently, the charge is that they do so by writing
rules which favour industry. However, non-state regulators, particularly those who are
attempting to regulate the conditions of production (Fair Trade, Rugmark, FSC, etc)
also need to have the support of consumers if the NSR is to be effective in
State-based regulators can also compete for regulatory share by attempting to ‘export’ their regulatory
norms; we will return to this issue below. 15
stimulating demand-side pressures for compliance. In other words, they need to be
legitimate to consumers, as well. It is therefore not enough for them simply to write
rules that render them legitimate to firms (eg by being in the firms’ self-interests), they
have to make themselves legitimate to a wider range of legitimacy communities, who
may be making competing legitimacy claims. -
EGITIMACY AND REGULATORY COMPETITION CREATING AND MANAGING
So how can regulators create and manage their legitimacy? Again the idea that
regulators, both state and non-state, ‘create and manage’ their legitimacy may be a
strange notion to constitutional or administrative lawyers, who are used to thinking in
terms of evaluating the legitimacy of regulators in a context in which the regulator is
implicitly assume to be a passive agent, an ‘object’ which can be evaluated. But
regulators, like states, or indeed any organisation, can play a role in constructing,
maintaining and repairing their own legitimacy in three main ways: by conforming,
manipulating, or informing. They can conform to the ‘legitimacy claims’ of
legitimacy communities, for example by pandering to their self-interest, or by trying to
conform to normative claims by making themselves more representative, or more
expert, or more transparent, or by aligning themselves with someone who has those
qualities, and so building legitimacy networks.
Many state-based regulatory agencies, for example, have developed systems of
public consultation, decision-making, and reporting which go well beyond those
required by law to enhance their normative legitimacy. Non-state regulators also can
seek to manage their legitimacy, both out of self-interest and because they perceive it
to be the ‘right thing to do’ -- in March and Olsen’s terms, out of a logic of
consequences and a logic of appropriateness. The International Accounting
Standards Committee has changed its constitutional structures and membership to
enhance its legitimacy. Cashore’s analysis of the FSC’s legitimacy illustrates how the
FSC seeks to manage its pragmatic legitimacy by engaging in ‘brand-destroying’
activities against those who do not conform, thus attempting to make conformance
with its norms be in the self-interest of firms in the supply chain. However,
legitimacy-enhancing strategies can be multi-faceted, and Meidinger’s analysis of FSC
emphasises how it seeks to manage its normative legitimacy by enhancing the
democratic nature of its membership and processes.
Regulators can also seek to develop moral and cognitive legitimacy through
building ‘legitimacy networks’, in other words linking themselves to other
See e.g. S.M. Lipset, ‘Some Social Requisites of Democracy’ (1958) 53 American Political Science Review 69;
R. Merelman, (1966) 60 American Political Science Review 548; Habermas, n 35 above.
See Suchman, n 36 above; P. DiMaggio and W. Powell, ‘Introduction’ in W. Powell and P. DiMaggio
(eds), The New Institutionalism in Organisational Analysis (Chicago: University of Chicago Press, 1991).
See M. Thatcher, ‘Regulation after Delegation: Independent Regulatory Agencies in Europe’ (2002)
9(6) Journal of European Public Policy 954.
March, J. and Olsen P., ‘The New Institutionalism: Organisational Factors in Political Life’ (1984) 78
American Political Science Review 734.
Suchman, n 36 above.
59 Meidinger, n 1 above.
Julia Black Legitimacy and the Competition for Regulatory Share
organisations which are perceived to be legitimate by those whose legitimacy claims
they want to meet. For example, a number of the social and environmental
accreditation bodies have agreed to ensure that they abide by the Code of Practice
developed by ISEAL (the International Social and Economic Accreditation League)
on the development, publication, and review of standards by member organisations,
largely to enhance their credibility. Modelling can also be adopted as a strategy to
enhance legitimacy by an NSR. Froomkin, for example, argues that ICANN has
developed procedures modelled on the Internet Engineering Taskforce, which is
widely accepted as legitimate by the internet community, in an attempt to gain
legitimacy for itself. 62
Alternatively, regulators can adopt less honourable strategies than actually
conforming to normative claims and can attempt to gain legitimacy through
manipulation, pretending to conform to the perceptions of the legitimacy
communities (eg ‘green-washing’). Or they can attempt to change or manipulate the
reasons why legitimacy is being given, such as attempting to refute democratic claims
by appealing to functional claims, in other words by advancing the argument that it is
more important for them to be dominated by experts than it is for them to be
democratic, as enhancing their democratic nature would reduce their effectiveness.
This argument is one which has traditionally been used by technical NSRs, such as the
BCBS or IASB, just as it has been used in the area of scientific risk assessments and
risk management by state-based regulators.
Regulators can also increase their legitimacy by providing information on aspects
of their existing activities which they think will provide a basis for acceptance from
different legitimacy communities. This strategy can clearly be used alone or in
conjunction with the other two. The form that any of the strategies will take vary with
the type of legitimacy that is at issue: pragmatic legitimacy (based on self-interested
claims of legitimacy communities), moral or normative legitimacy (based on
assessments that this is the ‘right thing to do’), or cognitive legitimacy (based on
assumptions that things could not be any other way), and on whether the organisation
is seeking to build, maintain, or repair legitimacy. 63
Regulators can also switch between legitimacy claims in attempts to enhance
their legitimacy within different communities. Wood’s work on the ISO provides a
good illustration. When the ISO started to lose ground in its functionally-based
legitimacy claims (ie that it is technical, expert), it switched to an alternative claim, but
one which was more cognitively-rooted: that it was the most appropriate body
because of its long-standing existence and role in a related area.
ISEAL Alliance, Code of Good Practice, at http://www.isealalliance.org/
index.cfm?fuseaction=Page.viewPage&pageId=502&parentID=500. See also E. Meidinger, ‘Multi-
Interest Self Governance through Global Product Certification Programs’ (Buffalo Legal Studies
Research Paper 2006-016), at http://ssrn.com/abstract=917956.
A. Froomkin, ‘Habermas@discourse.net: Toward a Critical Theory of Cyberspace’ (2003) 116(3)
Harvard Law Review 749, 844-845.
Suchman, n 36 above, 585-601. See Cashore for consideration in the context of the FSC: B. Cashore,
‘Legitimacy and the Privatization of Environmental Governance: How Non-State Market Driven
(NSDM) Governance Systems Gain Rule Making Authority’ (2002) 15(4) Governance 503-529.
S.Wood, ‘Will ISO 26000 Corner the Market for International Social Responsibility Standards?’
Competition for Transnational Regulatory Authority (paper presented at the SLSA conference, Montreal, May
2008) (copy on file with author). 17
Regulators may thus seek to build legitimacy for themselves in a number of ways:
by conforming to the pragmatic, normative, and cognitive legitimacy claims of all or a
selective group of legitimacy communities, or by attempting to create new legitimacy
beliefs and new legitimacy communities. 65
Does this mean that NSR always serve industry interests? Obviously, it is always
possible than an NSR will seek to enhance its legitimacy simply by providing rules that
serve the interests of those it seeks to regulate. However, as noted above, if the NSR
is setting standards and relying on market actors to play a role in enforcing those
standards, such as the labelling-based regulatory regimes in the area of fair trade, then
self-serving codes may not be enough. Rather, because they are reliant on others,
those regulators may need to enhance their legitimacy with respect to those others, as
well as with the industry they are seeking to regulate.
The important point to note with respect to polycentric regimes is that an
organisation’s legitimacy communities include other participants in the regulatory
regime on whom the organisation relies or that it would like to enrol in its regulatory
processes, as well as those outside it. So a regulator lacking legal powers in a particular
jurisdiction, for example Fair Trade, relies on pressure groups or NGOs to generate
awareness amongst consumers and in turn economic pressures on market actors to
conform to those norms. This reliance means that it has to generate legitimacy
amongst those bodies in order to motivate them to act in its support.
EVALUATING THE COMPETITION FOR REGULATORY SHARE
Regulators are thus competing for legitimacy in a range of different ways. But is it a
‘good thing’ that non-state regulators compete for legitimacy against each other, and
against state-based regulators?
Regulatory competition is a well-studied phenomenon, both in law and political
science. Regulation is seen as a product, comprised of rules, processes, and
enforcement regimes, which regulators / nation-states / regional or state-level
governments adjust in order to secure some kind of advantage. The advantage usually
sought is economic activity -- investment, corporate listings, scientific research, and so
on. The debate focuses on the ‘level’ the regulation has to ‘settle at’ in order to win
the biggest share of investment, corporate listings, company incorporations, and so
on. Will it end up at the ‘bottom’ – ie very light regulation in favour of particular
economic actors; or at the ‘top’ – very ‘strong’ regulation which also benefits third
parties, for example by dealing effectively with externalities. The nature of the
regulatory regime is assumed to be directly related to the amount of investment. The
assumption is that the amount of this investment / activity will be primarily
dependent on the nature of the prevailing regulatory regime. The ‘winner’ is the one
with the most investment; the competition determines all.
On strategies for building legitimacy, see Suchman, n 36 above, 591-593; B. Ashford and B. Gibbs,
‘The Double Edge of Organisational Legitimation’ (1990) 1 Organisation Science 177. 18
Julia Black Legitimacy and the Competition for Regulatory Share
Regulatory competition, however, it is suggested, can take one of two forms: it
can be ‘import-based’ or ‘export-based’. The usual focus in the literature on regulatory
competition is on what I call here an ‘import-based’ strategy. In an import-based
strategy, regulators can try to ‘import’ businesses to their regulatory jurisdiction;
regulation is an instrument of a political and economic strategy of economic growth.
The main drivers in the state-based context are usually governments, but they need
not be: stock exchanges, for example, compete for listings in a similar manner. In the
regulatory competition literature, it is generally noted that there are two essential
though more accurately these
preconditions for regulatory competition to occur,
should be seen as preconditions for ‘import-based’ strategies of regulatory
competition. First, freedom of movement: those conducting the activity must be free
to move between jurisdictions of the regulators, so there must be flexibility in their
operations, or mobility in labour or capital. Capital is generally more mobile than
highly specialized labour; services are more mobile than power plants or mines.
Regulatory competition is thus frequently associated with economic integration, and is
argued to be more prevalent in trade-related regulatory regimes than those which are
not trade-related. Secondly, information: those conducting the activity must have
information about the different regulatory regimes and how they operate in practice,
including their enforcement activities. To these conditions, it is suggested, should be
added a third, which is that the regulatory regime will be one of the main, if not
primary, determinants of where the person conducting the activity locates, as opposed
to other matters such as the tax regime, availability of skilled labour or transport
Import-based regulatory strategies only make sense, however, for regulators
which are jurisdictionally bounded. They have to get business to come to them, for
they cannot, for reasons of legal jurisdiction, take their regulation to business.
However, NSRs are not geographically bounded by legal jurisdictions. Given that
non-state regulators are not trapped by national jurisdictional boundaries, the
regulator is able to move to find the business. So in the dynamic of competition for
regulatory share between non-state transnational regulators, the preconditions for
regulatory competition change. There is still the need for businesses to be informed
about the regime, but these jurisdictionally unbounded regulators do not need
businesses to be mobile in the same way that geographically fixed and jurisdictionally
bounded state-based regulators do.
In the NSR, context, therefore, the main competition strategy is export-based; it
is a strategy to enhance its ‘regulatory share’ by persuading others to adopt its norms,
but without necessarily requiring them to change their business locations. Each aims
for dominance in the regulatory ‘market’, such that all participants are ‘buying’ its
‘product’, in other words, all the components of its regulatory regime. Thus the
transnational fair trade or sustainable development initiatives compete against one
another to become ‘the’ labeling regime to which consumers recognize and respond
and to which producers and suppliers adhere. In accounting, there has long been a
C. Radaelli, ‘The Puzzle of Regulatory Competition’ (2004) 24(1) Journal of Public Policy 1; R. Baldwin
and M. Cave, Understanding Regulation (Oxford: Oxford University Press, 1999), ch 13; C. Tiebout, 'A Pure
Theory of Local Expenditures' (1956) 64 (5) Journal of Political Economy 416. 19
battle between the US-based GAAP standards and the IASB’s International Financial
Reporting Standards as to which companies will use (here national governments or
regulators can intervene by lending their support to one or the other).
The competition for regulatory share, or export-based regulatory competition, is
not confined to NSRs, however. The EU, for example, is trying to persuade other
countries to adopt key elements of its regulatory regime for chemicals, REACH.
Heyvaert argues that this drive to export the regulatory regime has a number of
motivations. First, there is a pragmatic motivation, pushed by industry, that others
should ‘share the pain’. In other words, exporting the regulatory regime and
promoting transnational convergence on its terms will ensure that any competitive
disadvantage that the regulation imposes on firms is not confined to those in the EU,
thus eliminating the EU’s competitive disadvantage in this respect. Second, the
export strategy is driven in part by the experience of previous challenges of the EU’s
precautionary approach to risk regulation by the US in the World Trade Organisation
Dispute Settlement Body (relating to beef hormones and the commercialization of
GMOs). Heyvaert argues that attempts to promote international convergence on the
EU’s standards ‘is an attempt to find safety in numbers, a rounding up of allies with
Third, this is itself part of a wider strategy of ‘offensive
an eye to the battle ahead’.
management’ of globalization, in which the export of regulation is an instrument of
foreign policy, to create stability in and kinship with other regions, in a relationship in
which the EU, as architect of the rules, hopes to take a central role. Finally, she argues
that lying underneath these different motivations is the attempt to build legitimacy.
The EU’s precautionary approach to risk regulation has been challenged by a number
of other countries, in particular the US. By exporting its chemicals regime, which the
EU regards as a quintessential manifestation of the ‘EU’ approach to risk regulation,
the hope is that its adoption by others will enhance its own legitimacy and authority as
a risk regulator.
Most of the debates on regulatory competition have focused on its ‘import-
based’ form and been conducted in terms of whether the dynamic is one of
competition or one of diffusion and convergence of regulatory norms, and whether
either competition or convergence result in a ‘race to the top’, in other words, an
improvement in the regulatory standards (at least from the point of view of some
broader public policy objective such as environmental protection, or shareholder
protection) or a ‘race to the bottom’, the ‘Delaware’ effect. So, adopting the terms of
that debate for the moment, where there is export-based competition between NSRs,
three questions become relevant. First, is the impact of the competition on the
regulatory regime such that we end up with a ‘race to the top’ or a ‘race to the
bottom’? Second, how do we assess which direction the race is going? Third, what
role does the competition for legitimacy play in this dynamic?
V. Heyvaert, ‘Globalizing Regulation: Reaching Beyond the Borders of the Chemical Safety’ (2009)
36(1) Journal of Law and Society 110.
68 ibid 114.
D. Vogel, ‘Trading Up and Trading Across: Transnational Governance and Environmental Protection’
(1997) 4(4) Journal of European Public Policy 556; D. Vogel, Trading Up: Consumer and Environmental Regulation
in the Global Economy (Cambridge, Mass.: Harvard University Press, 1995). 20
Julia Black Legitimacy and the Competition for Regulatory Share
Criteria for assessing what is the ‘top’ or the ‘bottom’ is more often assumed
than explicitly articulated in the literature on regulatory competition. Here, we are
interested in whether it leads to more legitimacy or less. However, given the
discussion above on the competing claims of different legitimacy communities
(functional, normative, constitutional and democratic), it should be clear that whether
we have reached a ‘legitimacy top’ or ‘legitimacy bottom’ is likely to be evaluated with
respect to a number of different and often competing criteria based in those different
claims (which are themselves internally contested – there are competing conceptions
of democracy, for example).
So it may be that on some criteria, competition is a positive thing, we end up on
a ‘legitimacy top’. Meidinger argues, for example, that competition ends up enhancing
the democratic element of all the regulators involved in forest stewardship, hence in
Taking a functional criteria of
the regime as a whole, so it is a positive thing.
legitimacy, competition may also be seen to be beneficial. Abbott and Snider provide
examples of where competition leads to higher standards being promulgated by NSRs,
prevents capture, and leads to greater collaboration. However, in the specific instance
of the FSC, they suggest that competition has led to the FSC softening some of its
standards to take into account business interests. In other words, putting the
argument into the terminology being used here, competition has led the FSC to a
legitimacy ‘bottom’ if legitimacy is assessed in functional terms, but to a legitimacy
‘top’ if assessed in democratic terms. And of course, if the assessment is being made
by industry itself, then they might argue that the competition has led to a ‘legitimacy
top’ as it serves their pragmatic, self-interested legitimacy claims.
So the assessments of ‘top’ and ‘bottom’ can never be absolute, just as the
assessments of legitimacy can never be absolute. Assessing the outcome of regulatory
competition for legitimacy needs to be done not by asking the question, ‘have we
reached the top or bottom’, but ‘whose legitimacy claims have been met, and why’?
That is not to say that assessments cannot be made of how democratic a regulatory
regime is, or how functionally effective; or the extent to which it conforms to any one
of the different sets and subsets of legitimacy criteria. It is to say that the assessment is
never an absolute one, but only one which is made with respect to a particular set of
legitimacy criteria. Moreover, given that we are operating here with a sociological
conception of legitimacy, we have to recognize that competition may lead to both a
top and a bottom simultaneously, but with respect to different legitimacy claims.
The outcomes of the competition for legitimacy may therefore be unexpected,
and indeed unwanted, for some. For example, Woods’ paper suggests that ISO is
widely seen as legitimate even though it does not conform with many democratic
criteria. This may be puzzling for some, but using the framework for analyzing
legitimacy suggested above, the ‘puzzle’ of its legitimacy may not be such a puzzle
after all. Rather, it may be widely regarded as legitimate, despite its non-conformance
to democratically-based normative claims, because it conforms to other legitimacy
claims, here to cognitive models of actorhood and to functionally-based normative
Meidinger, n 1 above.
71 Abbot and Snider, n 1 above.
72 Wood, n 64 above.
claims that it is flexible, non-state, tailored, and responsive: all those ‘new governance’
techniques which are so in vogue. The ISO is widely regarded as legitimate, therefore,
despite its lack of democracy, because it conforms to the legitimacy claims made by its
principal legitimacy communities, for whom, implicitly or explicitly, democratically-
based claims are less important.
COMPETITION DYNAMICS AND CONCEPTIONS OF LEGITIMACY
The arguments above have provided some illustrations of how regulators use
legitimacy in the competition for regulatory share, but this is a relatively new area of
research. It is not therefore clear whether there a direct relationship between
competition for legitimacy and the amount of ‘regulatory share’ that an organisation /
regulatory regime possesses in the same way that in the more conventional regulatory
competition debate there is assumed to be a direct relationship between competition
for business and the amount of business that is received. Clearly more empirical work
needs to be done in this area.
However, in exploring empirically the dynamics the competition for regulatory
share, it might be helpful to further refine our understanding of legitimacy and thus its
role in this dynamic. I suggest that we can conceptualise legitimacy in this dynamic in
one of (at least) three ways. First, we can see legitimacy as an attribute, second, as a
resource and third, as a (reversible) endowment. Each has implications for how we
understand the role of legitimacy in the competition for regulatory share.
EGITIMACY AS AN TTRIBUTE
In the image of legitimacy as an attribute, legitimacy is something that a person /
organisation / political institution just ‘has’. There are three striking features of the
notion of legitimacy as an attribute. First, it is an attribute that can be assessed or
measured in some ‘objective’ way, by an (academic) observer, though often the
assessment is black and white: an organisation is assessed as being legitimate or not
legitimate, but not something in between. Just as one cannot be semi-pregnant, under
this conception of legitimacy, a regulator is either legitimate or it is not.
Second, in the image of legitimacy as an attribute, the possession of legitimacy is
seen as quite separate and distinct from the regulatory body’s ability to function. The
many debates there are on the legitimacy of regulatory organisations often conclude
that they lack legitimacy – yet their ability to function notwithstanding this lack is
rarely, if ever, questioned. Much as having blue eyes is not relevant to a person’s
ability to run fast, ‘being legitimate’ in the standard accountability and legitimacy
debates is implicitly seen as quite distinct from the organisation’s ability to regulate.
Third, in the notion of legitimacy as an attribute, it is an attribute that it is
assumed that the organisation can do little about. It is frequently assumed in the more
legal and indeed many political science debates on legitimacy that ‘things have to be
done’ to the organisation to make it legitimate – it has to be changed from the outside
in someway – usually by being made ‘more accountable’ to the public / legislature /
Julia Black Legitimacy and the Competition for Regulatory Share
courts / etc. As noted above, there is little attention paid to how the organisation
itself may seek to create, repair, or maintain its own legitimacy.
EGITIMACY AS A ESOURCE
In the image of legitimacy as a resource, legitimacy is seen as a thing of value for the
regulator. Legitimacy is a resource which the organisation can use, create, extract,
expropriate, and lose, in the same way it may use, create, or extract any other resource
such as finance, goods, commodities, etc. The image of legitimacy as a resource
marks a distinct break with the image of legitimacy as an attribute in two ways. First,
the organisation is positioned as having an active role in the creation of its own
legitimacy. Second, legitimacy is recognized as being essential to its ability to function,
just as the possession of any other form of resources plays a significant role in the
functioning of an organisation.
The image of legitimacy as a resource invokes a predominantly strategic model of
action, in which the analogy is not with gifts but with market exchange: resources can
be competed over, and once gained, can be increased and utilitised in ways that will
improve the functional capacity of the organisation. Bernstein and Cashore’s recent
work provides a good example of how this image of legitimacy can be helpful in
analyzing the dynamics of competition between regulators, particularly transnational,
non-state regulators. But the notion of legitimacy as a resource suggests that it is
something which sits there ready to be exploited at the will of the organisation; this
does not fit with the notion of legitimacy in the regulatory context that was drawn
above -- that legitimacy is socially constructed and lies in the acceptance by others of
the organisation’s right to govern.
EGITIMACY AS AN NDOWMENT
The image of legitimacy as an endowment strays even further into unfamiliar territory,
unfamiliar at least to the standard debates on legitimacy (and accountability). In
proposing this more sociological image of legitimacy, I suggest that legitimacy should
be recognized as something that is of value to the organisation, as in the image of
legitimacy as a resource, yet that we recognize it’s socially constructed nature. In other
words, we recognize, as argued above, that legitimacy is bestowed on a person or
organisation by others: legitimacy is in the eye of the beholder. The organisation
cannot conclusively control whether or not it receives the endowment, though it can
try to elicit it. Much as we can be nice to Granny for years and yet still be cut out of
her will, organisations can ‘pander’ to different legitimacy communities but still not
receive the legitimacy from them that they seek.
However, they may also ‘ignore’ a legitimacy community and yet still receive
legitimacy from it, much as we may receive a surprise bequest. Further, the
endowment that is received may be reversible (just as bequests given through trusts
may be removed if the beneficiary breaches the terms on which they are given).
Organisations can lose legitimacy. Conversely, the legitimacy that they have received
Bernstein and Cashore, n 1 above.
from particular groups, or legitimacy communities, may simply be unwanted: just as
we might not want Uncle Harry’s clock (or war crime record revealed in his
bequeathed diaries), regulators may prefer that radical political groups, for example,
do not offer them their full support.
The image of legitimacy as a reversible endowment is thus distinct from the
image of legitimacy as a resource. As noted above, the image of legitimacy as resource
is arguably partial, for it assumes that ‘legitimacy’ is ‘out there’ to be won (like a
market share), or extracted (like a mineral). The ‘endowment’ image of legitimacy
corrects this by emphasizing that legitimacy is a function of the perceptions of others
outside the organisation; it is a function of whether or not they accept the
organisation as having a right to regulate and accept its norms as reasons for acting in
a certain way. The endowment image recognizes the giver as well as the receiver and
utiliser of legitimacy; while the resource image emphasises only the latter.
So in talking of ‘competing for’ legitimacy, we are invoking a different image of
legitimacy from that used in the more usual debates, in which legitimacy is seen as an
attribute. Rather, the image is one of legitimacy as a resource or as an endowment.
Both images are consonant with a dynamic context or ‘legitimacy environment’ in
which the demands of legitimacy communities change - both endowments and
resources can be taken away. However the suggestion here is that the image of
legitimacy as an endowment is a more powerful one as it recognizes the sociological
basis of legitimacy, and in particular the essential role of legitimacy communities in
The distinction is important, for it affects how we predict whether the
competition will work out. In the image of legitimacy as an attribute, the notion of
‘competition’ is almost an anathema, as it is not conceived of as something over
which the organisation has any control, or something that it can manage in any way. It
simply does not make sense for there to be a ‘competition for legitimacy’.
In the image of legitimacy as a resource, competition will determine the allocation of
resources. That allocation may or may not be optimal for all legitimacy communities
(the race could end up at the ‘top’ or ‘bottom’) but for the moment that is not the
point. The point is that the success of the organisation in strategically managing its
legitimacy and ‘extracting’ it from the relevant legitimacy communities will determine
But it is the image of legitimacy as an endowment which serves as an important
reminder that legitimacy cannot be as effectively managed as the ‘resource’ image of
legitimacy assumes. Organisations can compete for legitimacy, but whether they get it,
and who they get it from, still depends on the assessments of their various legitimacy
communities. Legitimacy may come from an unexpected (and perhaps unwanted?)
source: so Great Uncle Albert, who we have not seen for years, could think of us as
his favourite relation and leave a significant bequest. On the other hand, there are
barriers to legitimacy, which are pragmatic, normative, and importantly, cognitive. So
despite the organisation’s best efforts, legitimacy may not be forthcoming at all from
those legitimacy communities from whom it is sought. We can take Granny to tea as
often as we like, but she may still be ungrateful. 24
+1 anno fa
Materiale didattico per il corso di Theories of Regulation della prof.ssa Laura Ammannati. Trattasi dell'articolo di Julia Black dal titolo "Legitimacy and the Competition for Regulatory Share" all'interno del quale è affrontato l'argomento dell'importanza della legittimazione nell'attività di regolazione del mercato.
I contenuti di questa pagina costituiscono rielaborazioni personali del Publisher Atreyu di informazioni apprese con la frequenza delle lezioni di Theories of Regulation e studio autonomo di eventuali libri di riferimento in preparazione dell'esame finale o della tesi. Non devono intendersi come materiale ufficiale dell'università Milano - Unimi o del prof Ammannati Laura.
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