Reconfiguring regulatory institutions: Learning from diplomacy and indirect reciprocity

Abstract

Regulation is conceived as suffering reciprocity deficits that compromise its efficacy. Diplomacy is used as a model for reconfiguring regulatory institutions in response. Ambassadors for Regulatory Affairs who would be agents for all state regulatory agencies could be based in most large firms and SMEs that pose unusual regulatory risks. Rural police would be trained to be Ambassadors for Regulatory Affairs to rural towns. Just as a US Secretary of State can launch a "diplomatic surge" in Afghanistan-Pakistan-India and with Burma from 2009, so regulatory surges are possible to respond to reciprocity deficits in market sectors of high risk or high opportunity. One reason reciprocity that is only episodic in these strategic ways can promote more general responsiveness is that, as a more general theoretical proposition, strategies of indirect reciprocity can work. Diplomatic cultures rely heavily on indirect reciprocity. Indirect reciprocity is reciprocity that we do not personally experience, but learn from the experience of a culture. This means that so long as we sustain regulation as a relational, as opposed to a purely technocratic process, indirect reciprocity might civilize regulatory compliance in a historical process informed by the theories of Norbert Elias and Robert Putnam