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Self-Regulation

Self-regulation describes the way a specific group controls and supervises any or all aspects of its own activities in terms of public interest. It is an extraordinarily fluid concept. The term bleeds into neighboring ideas, such as voluntary regulation, self-policing, self-governance, corporate social responsibility or coregulation. Self-regulation applies to institutions ranging from local sports clubs, to professions, to global industrial networks, leaving out little of what lies in between. Self-regulation covers myriad activities and comes in various organizational guises. Consequently, the idea is the subject of some controversy. This entry defines the notion, shows the past traditions, discusses professional self-regulation with its issues and criticisms, and finally presents its recent evolution.

Definition and Background

The term self-regulation implies two dimensions, as emphasized by Anthony Ogus (1999). First, regulatory regimes differ in the amount of control they have over the supervision they give the group, that is, the extent of self-regulation. Some forms of self-regulation are handled entirely by the group in question, such as self-regulation of the medical profession. In other instances, notably industry technical standards, self-regulation may rely on third-party oversight, such as the International Organization for Standardization (ISO). Second, regulatory approaches may differ in the capacity to enforce regulation, that is, the ability to self-regulate. Some self-regulatory regimes have legal or quasi-legal status, for example, for law or accountancy. Others are little more than a set of normative aspirations, such as the nonbinding industry codes of conduct in, for example, the tobacco industry.

Historical antecedents of self-regulation go as far back as ancient Rome. In medieval and Renaissance Europe, largely self-governing guilds regulated trades and crafts. According to Philippe Dollinger (1998), the Hanseatic League, a politically autonomous alliance of trading cities and their guilds, was probably the culmination of trades-based self-governance in premodern Europe. In Asia, there are records of associations of craftsmen and trades, called shreni in India or hanghui in China. In general, premodern forms of self-regulation contributed to the broader goal of self-governance. With the rise of the modern state and its monopoly on political power, self-regulation evolved into an alternative to direct state oversight, albeit an alternative that was to complement rather than replace the general regulatory legitimacy of the state. Particularly in the English-speaking world, self-regulation of this kind is most commonly associated with the oversight of professions, most prominently of medicine and law. In Europe and the United States, as noted by Donald Irvine, much of the legal basis for professional self-regulation was established in the 19th and 20th centuries. Symbolizing the status of an independent profession, professional self-regulation has become the gold standard for aspiring vocations.

Professional Self-Regulation

Proponents of professional self-regulation contend that it solves the problem of information asymmetry between the state and the professions. Professions, not only medicine and law but also accountancy, have traditionally argued that effective regulation requires a level of expert knowledge found only within the profession itself. Regulation by peers, so the argument goes, creates the trust and reciprocity crucial to supervising a highly complex, knowledge-intensive, and dynamic field of activity. Since expertise, trust, and collegiality lead to fewer regulatory errors, proponents point out, the costs of self-regulation to the taxpayer are lower than in the case of external regulation. For this reason, professional regulation typically is independent and equipped with considerable enforcement capacities, for example, the barring and disbarring of legal practitioners.

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