Recent events have got me thinking about regulation and just how strained and ineffectual our current systems have become. It’s not just the global financial crisis, although this alone illustrates what can happen when both markets and regulators fail. Issues as diverse as climate change, emerging technologies, international trade, food safety, infectious disease, and human rights demand novel approaches and I think wikinomics could be part of the solution.
Some of the issues that challenge today’s regulators include the sclerotic pace of rulemaking, increasing international interdependency, the lack of transparency in industry and government, the corrosive influence of “junk science” and money and an insufficient capacity for oversight.
After dismantling or circumscribing centralized regulatory agencies in the 1980s and 1990s, I think many governments will find they are ill equipped to deal with these challenges. In most sectors, deregulation was a cue for regulated industries to start designing and enforcing their own regulations. Decentralized rulemaking was intended to help make regulation more responsive to the needs of industries that were evolving quickly and becoming increasingly global in scope. Governments were to be the “regulators of last resort”—stepping in only after self-regulation was deemed to have failed. But in practice most instances of pure self-regulation have deficiencies and governments (for the most part) have proven unable or unwilling to take swift action when market failures became evident.
The upshot: without transparency, oversight and accountability, self-regulation is clearly inadequate. At the same time, the speed, interdependency and complexity of today’s world makes a return to centralized rulemaking and enforcement increasingly implausible. All this makes me think that the kinds of organizational innovations that make the Linux community, twitter and wikipedia remarkable could help regulators address some their challenges.
The big opportunity initially may be to foster greater citizen or stakeholder participation in monitoring and enforcing regulations that already exist. Naturalists and recreational users could be enlisted to help document abuses on public lands, just as individuals and organizations around the world are able to bring human rights abuses to global attention using new channels like YouTube or Winess’s Hub.
But citizens and other stakeholders could also help design and promulgate new rules, particularly where there are gaps in existing legislation. The consumer advocacy movements that currently police the social and environmental performance of industry are a good example. More governments could eventually sanction initiatives like these, while insisting on mandatory corporate sustainability reporting and other forms of transparency would bolster the efforts of citizen monitors.
The technological foundation – including RFID, satellite imagery, cheap personal video recorders and other Internet-connected devices – already exists to distribute the power and authority for designing and enforcing regulations to a broader network of participants. And I think that in the right niches and within certain communities of interest there is ample desire on the part of citizens to play a role in enforcing the rules they care about. I’m not sure that same enthusiasm exists within government and industry, which is why my preliminary research suggests that most new forms of participatory regulation are emerging completely outside traditional regulatory bodies.
I’ll be following up this post with a series of nascent examples. If participatory regulation is of interest to you or if you know of other examples, I would love to hear about it.