Regulation is the management of complex systems according to a set of rules and trends. In

systems theory Systems theory is the interdisciplinary study of systems, i.e. cohesive groups of interrelated, interdependent components that can be natural or human-made. Every system has causal boundaries, is influenced by its context, defined by its struc ...

, these types of rules exist in various fields of

biology Biology is the scientific study of life. It is a natural science with a broad scope but has several unifying themes that tie it together as a single, coherent field. For instance, all organisms are made up of cells that process hereditary ...

and

society A society is a group of individuals involved in persistent social interaction, or a large social group sharing the same spatial or social territory, typically subject to the same political authority and dominant cultural expectations. Soc ...

, but the term has slightly different meanings according to context. For example: * in biology,

gene regulation Regulation of gene expression, or gene regulation, includes a wide range of mechanisms that are used by cells to increase or decrease the production of specific gene products (protein or RNA). Sophisticated programs of gene expression are wide ...

and metabolic regulation allow living organisms to adapt to their environment and maintain homeostasis; * in

government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government i ...

, typically regulation means stipulations of the delegated legislation which is drafted by subject-matter experts to enforce primary legislation; * in business,

industry self-regulation Industry self-regulation is the process whereby members of an industry, trade or sector of the economy monitor their own adherence to legal, ethical, or safety standards, rather than have an outside, independent agency such as a third party entit ...

occurs through

self-regulatory organization A self-regulatory organization (SRO) is an organization that exercises some degree of regulatory authority over an industry or profession. The regulatory authority could exist in place of government regulation, or applied in addition to governmen ...

s and trade associations which allow industries to set and enforce rules with less government involvement; and, * in psychology,

self-regulation theory Self-regulation theory (SRT) is a system of conscious, personal management that involves the process of guiding one's own thoughts, behaviors and feelings to reach goals. Self-regulation consists of several stages. In the stages individuals must f ...

is the study of how individuals regulate their thoughts and behaviors to reach goals.

Social

Regulation in the social, political, psychological, and economic domains can take many forms:

legal Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vari ...

restrictions promulgated by a

authority, contractual obligations (for example, contracts between insurers and their insureds), self-regulation in psychology, social regulation (e.g. norms), co-regulation, third-party regulation, certification, accreditation or market regulation.

State State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...

-mandated regulation is government intervention in the private market in an attempt to implement policy and produce outcomes which might not otherwise occur,Orbach, Barak
What Is Regulation? 30 Yale Journal on Regulation Online
1 (2012) ranging from consumer protection to faster growth or technological advancement. The regulations may prescribe or proscribe conduct ("command-and-control" regulation), calibrate incentives ("incentive" regulation), or change preferences ("preferences shaping" regulation). Common examples of regulation include limits on environmental

pollution Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, the ...

, laws against child labor or other

employment Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any ot ...

regulations,

minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. B ...

s laws, regulations requiring truthful labelling of the ingredients in food and drugs, and food and drug safety regulations establishing minimum standards of testing and quality for what can be sold, and zoning and development approvals regulation. Much less common are controls on market entry, or

price A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in th ...

regulation. One critical question in regulation is whether the regulator or government has sufficient information to make ex-ante regulation more efficient than ex-post liability for harm and whether industry self-regulation might be preferable. The economics of imposing or removing regulations relating to markets is analysed in empirical legal studies, law and economics, political science, environmental science, health economics, and

regulatory economics Regulatory economics is the economics of regulation. It is the application of law by government or regulatory agency, regulatory agencies for various purposes, including remedying market failure, Environmental law, protecting the environment and e ...

. Power to regulate should include the power to enforce regulatory decisions. Monitoring is an important tool used by national regulatory authorities in carrying out the regulated activities. In some countries (in particular the Scandinavian countries) industrial relations are to a very high degree regulated by the labour market parties themselves (self-regulation) in contrast to state regulation of minimum wages etc.

Reasons

Regulations may create costs as well as benefits and may produce unintended reactivity effects, such as defensive practice. Efficient regulations can be defined as those where total benefits exceed total costs. Regulations can be advocated for a variety of reasons, including *

Market failure In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. Market failures can be viewed as scenarios where indiv ...

s – regulation due to inefficiency. Intervention due to what economists call

market failure In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. Market failures can be viewed as scenarios where indiv ...

. ** To constrain sellers' options in markets characterized by

monopoly A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...

** As a means to implement collective action, in order to provide public goods ** To assure adequate

information Information is an abstract concept that refers to that which has the power to inform. At the most fundamental level information pertains to the interpretation of that which may be sensed. Any natural process that is not completely random, ...

in the market ** To mitigate undesirable

externalities In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...

* Collective desires – regulation about collective desires or considered judgments on the part of a significant segment of

* Diverse experiences – regulation with a view of eliminating or enhancing opportunities for the formation of diverse preferences and beliefs * Social subordination – regulation aimed to increase or reduce social subordination of various social groups *

Endogenous Endogenous substances and processes are those that originate from within a living system such as an organism, tissue, or cell. In contrast, exogenous substances and processes are those that originate from outside of an organism. For example, ...

preferences – regulation intended to affect the development of certain preferences on an aggregate level * Professional conduct – the regulation of members of

professional bodies A professional is a member of a profession or any person who works in a specified professional activity. The term also describes the standards of education and training that prepare members of the profession with the particular knowledge and ski ...

, either acting under statutory or contractual powers. *

Interest group Advocacy groups, also known as interest groups, special interest groups, lobbying groups or pressure groups use various forms of advocacy in order to influence public opinion and ultimately policy. They play an important role in the developm ...

transfers – regulation that results from efforts by self-interest groups to redistribute wealth in their favor, which may be disguised as one or more of the justifications above. The study of formal (legal or official) and informal (extra-legal or unofficial) regulation constitutes one of the central concerns of the

sociology of law The sociology of law (legal sociology, or law and society) is often described as a sub-discipline of sociology or an interdisciplinary approach within legal studies. Some see sociology of law as belonging "necessarily" to the field of sociology, ...

History

Regulation of businesses existed in the

ancient Ancient history is a time period from the beginning of writing and recorded human history to as far as late antiquity. The span of recorded history is roughly 5,000 years, beginning with the Sumerian cuneiform script. Ancient history cove ...

early Egyptian, Indian, Greek, and Roman civilizations. Standardized weights and measures existed to an extent in the ancient world, and gold may have operated to some degree as an international currency. In China, a national currency system existed and paper currency was invented. Sophisticated law existed in

Ancient Rome In modern historiography, ancient Rome refers to Roman civilisation from the founding of the city of Rome in the 8th century BC to the collapse of the Western Roman Empire in the 5th century AD. It encompasses the Roman Kingdom (753–509 ...

. In the European

Early Middle Ages The Early Middle Ages (or early medieval period), sometimes controversially referred to as the Dark Ages, is typically regarded by historians as lasting from the late 5th or early 6th century to the 10th century. They marked the start of the M ...

, law and standardization declined with the Roman Empire, but regulation existed in the form of norms, customs, and privileges; this regulation was aided by the unified Christian identity and a sense of honor regarding

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...

s.John Braithwaite, Péter Drahos. (2000). ''Global Business Regulation''. Cambridge University Press. Modern industrial regulation can be traced to the Railway Regulation Act 1844 in the United Kingdom, and succeeding Acts. Beginning in the late 19th and 20th centuries, much of regulation in the United States was administered and enforced by regulatory agencies which produced their own

administrative law Administrative law is the division of law that governs the activities of executive branch agencies of government. Administrative law concerns executive branch rule making (executive branch rules are generally referred to as " regulations"), ...

and procedures under the authority of statutes. Legislators created these agencies to allow experts in the industry to focus their attention on the issue. At the federal level, one of the earliest institutions was the

Interstate Commerce Commission The Interstate Commerce Commission (ICC) was a regulatory agency in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads (and later trucking) to ensure fair rates, to eliminate ...

which had its roots in earlier state-based regulatory commissions and agencies. Later agencies include the Federal Trade Commission,

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

Civil Aeronautics Board The Civil Aeronautics Board (CAB) was an agency of the federal government of the United States, formed in 1938 and abolished in 1985, that regulated aviation services including scheduled passenger airline serviceStringer, David H."Non-Skeds: T ...

, and various other institutions. These institutions vary from industry to industry and at the federal and state level. Individual agencies do not necessarily have clear life-cycles or patterns of behavior, and they are influenced heavily by their leadership and staff as well as the organic law creating the agency. In the 1930s, lawmakers believed that unregulated business often led to injustice and inefficiency; in the 1960s and 1970s, concern shifted to

regulatory capture In politics, regulatory capture (also agency capture and client politics) is a form of corruption of authority that occurs when a political entity, policymaker, or regulator is co-opted to serve the commercial, ideological, or political interests ...

, which led to extremely detailed laws creating the

United States Environmental Protection Agency The Environmental Protection Agency (EPA) is an independent executive agency of the United States federal government tasked with environmental protection matters. President Richard Nixon proposed the establishment of EPA on July 9, 1970; it ...

and

Occupational Safety and Health Administration The Occupational Safety and Health Administration'' (OSHA ) is a large regulatory agency of the United States Department of Labor that originally had federal visitorial powers to inspect and examine workplaces. Congress established the agenc ...

References

External links

Centre on Regulation in Europe (CERRE)

New Perspectives on Regulation (2009)
an
Government and Markets: Toward a New Theory of Regulation (2009)

US/Canadian Regulatory Cooperation:
Schmitz on Lessons from the European Union, Canadian Privy Council Office Commissioned Study
A Comparative Bibliography: Regulatory Competition on Corporate Law

Wikibooks