The Politics of the Regulatory Policymaking Process: Three Essays on Governments, Markets, and Effective Regulatory Governance

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2018

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Abstract

This dissertation comprises three articles:

“Rethinking Stakeholder Participation in Regulatory Governance: A Historical-Institutional Analysis and Proposed Theoretical Model” (Chapter 2/Article 1): The regulatory policymaking process provides myriad opportunities for stakeholder participation. While policymakers have invested considerable resources in engaging stakeholders in regulatory policymaking, comparatively few resources have been invested in evaluating the effectiveness of participation processes. Similarly, although there is a burgeoning literature on stakeholder participation in regulatory policymaking, the topic of participatory effectiveness is under-explored. A more holistic understanding of the causal chain connecting participatory institutional design, stakeholder participation, and regulatory policy outcomes would contribute to the theory and practice of regulatory governance by illuminating the conditions under which interactions among regulators and external stakeholders promote or hinder effective regulatory policy. Based on a historical-institutional analysis of participatory institutional design in the United States over the last century and a review of the extant interdisciplinary theoretical and empirical literature, this article proposes a novel causal process model of participatory effectiveness. This model both formalizes a theoretical approach to defining participatory effectiveness and informs empirical approaches to measuring the effectiveness of participation in regulatory policymaking.

“Technocracy, Democracy, and Public Policy: An Evaluation of Public Participation in Retrospective Regulatory Review” (Chapter 3/Article 2): In 2011 and 2012, President Obama issued a series of Executive Orders (EOs) mandating that U.S. federal agencies engage in “retrospective review” of their existing regulations. While prospective assessment of regulations is a well-established feature of the U.S. regulatory policy cycle, EOs 13563, 13579, and 13610 recognize that retrospective assessment is not yet institutionalized. This article presents the first systematic assessment of participation in U.S. retrospective regulatory review. Drawing on content analysis of an original dataset of government documents and public input, this article analyzes participatory institutional design, the level and composition of resulting participation, and the effectiveness of participation processes. The results suggest that participation processes were effective with respect to the purposes of participation identified in the EOs and extant literature: policy learning and process legitimacy. These findings offer preliminary evidence that under certain circumstances regulatory agencies may use participation to enhance technocratic expertise and promote democratic accountability.

“Banking on Burden Reduction: How the Global Financial Crisis Shaped Stakeholder Participation in Banking Regulation” (Chapter 4/Article 3): The Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) of 1996 requires the Federal Financial Institutions Examination Council (FFIEC)—an interagency council composed of U.S. banking regulators—to conduct decennial retrospective reviews of existing banking regulations, with an emphasis on reducing regulatory burden. EGRPRA reviews provide a lens to study government-market interactions before and after the global financial crisis (GFC) of 2007-2009. Through comparative case studies of EGRPRA reviews in 2007 and 2017, this article documents how banking regulatory review processes and stakeholder participation in banking regulation have changed over the last ten years. Using within-case process tracing and content analysis of an original dataset of government documents and public input, this article analyzes the extent to which changes in review processes, participation, and outcomes can be attributed to the policy shock of the GFC and/or shifting political, regulatory, and/or market contexts. The results suggest government-market interactions have changed considerably since the GFC, and that regulatory politics explain many of these changes. While retrospective review and stakeholder participation therein may enable more effective and legitimate regulations and rulemaking processes, much work remains to realize these potential benefits in banking regulation.

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DeMenno, Mercy Berman (2018). The Politics of the Regulatory Policymaking Process: Three Essays on Governments, Markets, and Effective Regulatory Governance. Dissertation, Duke University. Retrieved from https://hdl.handle.net/10161/17435.

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