Construction of Regulatory Governance: A Sequencing Framework

Regulatory governance is constructed through complex interactions between public and private actors, who can perform both rule-making and rule-checking functions. Private rules often incorporate existing public policy, while public regulators can learn from pre-existing private rules. Similarly, public policy at times integrates private actors for compliance verification (e.g., by means of independent audits) while private rules are used by public rule-checkers through incorporation by reference. In this paper, we ask how and why these actors come to take up different functions across regulatory contexts and how the sequence in which they do matters for the authority, legitimacy, and effectiveness of regulatory governance. We propose a three-axis framework that examines: (a) public vs. private actor; (b) rule-maker vs. rule-checker; and (c) the temporal sequence of which actors emerge first or second in the construction of regulatory governance. This three-axis approach yields eight distinct permutations of regulatory governance construction, and we provide one case for each possible permutation that exemplifies their unique implications. Our framework integrates insights from rational design and institutional analysis traditions, acknowledging that while actors make strategic choices to maximize utility, these choices occur within institutional contexts that shape preferences and power distributions. We derive hypotheses from our cases, highlighting that the sequencing of public and private involvement in rule-making and rule-checking is influenced by several factors, including bureaucratic constraints, the availability of specialized expertise, political and market pressures, and global coordination mechanisms. By systematically analyzing the construction of regulatory governance through this sequencing lens, our framework provides a more nuanced understanding of how different regulatory arrangements can emerge and evolve. This approach offers valuable insights for policymakers seeking to design more effective regulatory systems and for scholars studying the dynamic interplay between public and private authority in contemporary governance.