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Regulation is the management of
complex systems A complex system is a system composed of many components which may interaction, interact with each other. Examples of complex systems are Earth's global climate, organisms, the human brain, infrastructure such as power grid, transportation or com ...
according to a set of rules and trends. In
systems theory Systems theory is the interdisciplinary study of system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way effect is essential in th ...
, these types of rules exist in various fields of
biology Biology is the natural science that studies life and living organisms, including their anatomy, physical structure, Biochemistry, chemical processes, Molecular biology, molecular interactions, Physiology, physiological mechanisms, Development ...

biology
and
society A society is a group A group is a number A number is a mathematical object used to counting, count, measurement, measure, and nominal number, label. The original examples are the natural numbers 1, 2, 3, 4, and so forth. Numbers can be ...

society
, 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 widely ...
and
metabolic regulation Metabolism (, from el, μεταβολή ''metabolē'', "change") is the set of life Life is a characteristic that distinguishes physical entities that have biological processes, such as Cell signaling, signaling and self-sustaining ...
allow living organisms to adapt to their environment and maintain
homeostasis In , homeostasis is the state of steady internal, , and conditions maintained by . This is the condition of optimal functioning for the organism and includes many variables, such as and , being kept within certain pre-set limits (homeostatic r ...
; * in
government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Departmen ...

government
, typically regulation means stipulations of the
delegated legislation In parliamentary systems and presidential systems of government, primary legislation and secondary legislation, the latter also called delegated legislation or subordinate legislation, are two forms of law, created respectively by the legislature ...
which is drafted by
subject-matter expert A subject-matter expert (SME) is a person who is an authority in a particular area or topic. The term is used when developing materials about a topic (a book, an examination, a manual, etc.), and expertise on the topic is needed by the personnel ...
s 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 entity ...
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 government ...
s and
trade association A trade association, also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific . An industry trade association participates in ...
s which allow industries to set and enforce rules with less government involvement; and, * in psychology,
self-regulation theorySelf-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 and individuals must function as cont ...
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 system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its boundari ...
restrictions promulgated by a
government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Departmen ...

government
authority, contractual obligations (for example, contracts between insurers and their insureds), self-regulation in psychology, social regulation (e.g.
norm Norm, the Norm or NORM may refer to: In academic disciplines * Norm (geology), an estimate of the idealised mineral content of a rock * Norm (philosophy) Norms are concepts ( sentences) of practical import, oriented to effecting an action, rat ...
s), 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), ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, Un ...
-mandated regulation is government intervention in the private market in an attempt to implement
policy Policy is a deliberate system of guideline A guideline is a statement by which to determine a course of action. A guideline aims to streamline particular processes according to a set routine or sound practice. Guidelines may be issued by an ...

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 s 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). s, the components of po ...

pollution
, laws against child labor or other
employment Employment is the relationship between two parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview; cropped away black border edge.jpg, 300px, ''Hip, Hip, Hurrah!'' ( ...

employment
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 List of minimum wages by country, countries had introduced minimum wage legislation 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 Planning permission or developmental approval refers to the approval needed for construction or expansion (including significant renovation), and sometimes for demolition, in some jurisdictions. It is usually given in the form of a building perm ...
regulation. Much less common are controls on market entry, or
price A price is the (usually not negative) quantity Quantity is a property that can exist as a multitude or magnitude, which illustrate discontinuity and continuity. Quantities can be compared in terms of "more", "less", or "equal", or by ...

price
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 Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant life and a bran ...

economics
of imposing or removing regulations relating to
market Market may refer to: *Market (economics) *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an island shared by Finland and Sweden Art, entertainment, and media Films *Market (1965 film), ''Market'' (1965 ...
s is analysed in empirical legal studies, law and economics, political science, environmental science, health economics, and
regulatory economics Regulatory economics is the economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals ...
. 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 indivi ...
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 indivi ...
. **To constrain sellers' options in markets characterized by
monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none) is as described by Irving Fisher, a market with the "absence of competition", creating a situation where a specific ...

monopoly
**As a means to implement collective action, in order to provide public goods **To assure adequate
information Information is processed, organised and structured data Data (; ) are individual facts, statistics, or items of information, often numeric. In a more technical sense, data are a set of values of qualitative property, qualitative or quant ...

information
in the market **To mitigate undesirable
externalities In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods ...

externalities
*Collective desires - regulation about collective desires or considered judgments on the part of a significant segment of
society A society is a group A group is a number A number is a mathematical object used to counting, count, measurement, measure, and nominal number, label. The original examples are the natural numbers 1, 2, 3, 4, and so forth. Numbers can be ...

society
*Diverse experiences - regulation with a view of
eliminating
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 system such as an organism, Tissue (biology), tissue, or Cell (biology), cell. Endogenous substances and processes contrast with exogenous ones, such as Drug, drugs, which ...
preferences - regulation intended to affect the development of certain preferences on an aggregate level *
Professional conductProfessional conduct is the field of regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has sligh ...
- the regulation of members of
professional bodies A professional association (also called a professional body, professional organization, or professional society) seeks to advocacy, further a particular profession, the interests of individuals engaged in that profession and the public interest. ...
, either acting under
statutory A statute is a formal written enactment of a legislative A legislature is an assembly Assembly may refer to: Organisations and meetings * Deliberative assembly A deliberative assembly is a gathering of members (of any kind of collective) ...
or contractual powers. *
Interest group Advocacy groups, also known as special interest groups, use various forms of advocacy Advocacy is an activity by an individual or group that aims to influence decisions within political, economic, and social institutions. Advocacy include ...
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 (or legal sociology) is often described as a sub-discipline of sociology Sociology is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and th ...
.


History

Regulation of businesses existed in the
ancient Ancient history is the aggregate of past eventsWordNet Search – 3.0
"History"
from ...

ancient
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 historiography Historiography is the study of the methods of historian ( 484– 425 BC) was a Greek historian who lived in the 5th century BC and one of the earliest historians whose work survives. A historian is a person who stud ...
. In the European
Early Middle Ages The Early Middle Ages or Early Medieval Period, sometimes 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 Middle Ages ...
, 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 binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview ...

contract
s.John Braithwaite, Péter Drahos. (2000). ''Global Business Regulation''. Cambridge University Press. Modern industrial regulation can be traced to the
Railway Regulation Act 1844 The Railway Regulation Act 1844 was an Act of Parliament, Act of the Parliament of the United Kingdom providing a minimum standard for Rail transport, rail passenger travel. It provided compulsory services at a price affordable to poorer people to ...
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 body of law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by ...
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 industry in the United States, trucking ...

Interstate Commerce Commission
which had its roots in earlier state-based regulatory commissions and agencies. Later agencies include the
Federal Trade Commission The Federal Trade Commission (FTC) is an Independent agencies of the United States government, independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) U.S. antitrust law and the promot ...

Federal Trade Commission
,
Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is a large independent agencies of the United States government, independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary ...
,
Civil Aeronautics Board The Civil Aeronautics Board (CAB) was an agency Agency may refer to: * a governmental or other institution Institutions, according to Samuel P. Huntington, are "stable, valued, recurring patterns of behavior". Institutions can refer to me ...

Civil Aeronautics Board
, 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 An organic law is a law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is des ...
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 captureIn politics Politics (from , ) is the set of activities that are associated with making decisions in groups, or other forms of power relations between individuals, such as the distribution of resources or status. The branch of social scien ...
, which led to extremely detailed laws creating the
United States Environmental Protection Agency The Environmental Protection Agency (EPA) is an Independent agencies of the United States government, independent executive agency of the United States federal government tasked with environmental protection matters. President Richard Nixon pro ...
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 The United States Department of Labor (DOL) is a cabinet-level department of the U.S. federal government resp ...
.


See also

* * * * * * * * * * * * *


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

* Legal and Regulatory Issues in the Information Economy
Lawrence A. Cunningham, A Prescription to Retire the Rhetoric of 'Principles-Based Systems' in Corporate Law, Securities Regulation and Accounting (2007)
{{Authority control Economics of regulation * Public policy