Brief book review – Regulatory Crisis: Negotiating the Consequences of Risk, Disasters and Crises

~ Jeroen van der Heijden

Bridget M. Hutter and Sally M. Lloyd-Bostock, 2017, Cambridge University Press, 259 pages.

In Regulatory Crisis: Negotiating the Consequences of Risk, Disasters and Crises, Professors Bridget Hutter and Sally Lloyd-Bostock (both London School of Economics) seek to understand when a disaster becomes a crisis for regulators. They provide in-depth case studies of five disasters that became regulatory crises in the UK: the BSE epidemic of the1980s and 1990s, the case of Dr Harold Shipman, the terrorist suicide bombings of 7 July 2005 in London, the financial crises of 2007-2009, and the volcanic ash crisis of 2010 that resulted to the closure of much of Europe’s airspace.

Hutter and Lloyd-Bostock broadly define a regulatory crisis as a loss of public trust or confidence in the ability of a regulator to respond to a disaster. Ultimately, this lack of trust undermines the regulator’s legitimacy and causes organisational disruption. Separating the notion of regulatory crisis from the disaster that caused it allows the authors to get a better grip on the sequence of events that precedes the regulatory crises studied. For the cases studied, they find that regulatory crises emerged at different times after the actual disasters occurred. In some cases, the authors argue, the regulatory crises were as much a result of a disaster as of the regulator’s response to that disaster.

One of the core take-home lessons from the book is that an external disaster (e.g., the volcanic ash crisis) or internal regulatory failure (e.g., in the case of Dr Shipman) is not doomed to become a regulatory crisis for the regulator. The regulator’s response to disaster matters. The book does not provide a guideline for how to respond to disasters and prevent it from becoming crises. It does, however, warn for too swift and speedy responses as these may plant the seed for a future regulatory crisis to happen. It also warns for the deceptiveness of sense-making and lesson drawing after a crisis. The human desire to learn from crises to prevent future ones may result in too simple and idealised narratives (‘narrative fallacy’) and responses that are not entirely correct.

Between the lines, the book hints at the need for regulators to prepare for disasters to happen. As the authors argue: “Regulation is not (and cannot be) a system of prevention at all costs. Quite the reverse: it demands that risks and levels of prevention are weighted against both each other and the costs of protection” (p.8). Keeping in mind that a poor response to a disaster may cause or strengthen a regulatory crisis, it would thus seem wise for regulators to make disaster response plans or guidelines part of their regulatory regime development. Such plans or guidelines could make all the difference between sound disaster mitigation and a disaster becoming a crisis for the regulator.

Disclaimer

In these brief book reviews, I discuss classic and contemporary books that make up the canon of regulatory scholarship. I focus on their guiding idea or core notions and aim to keep the reviews to around 500 words. Unfortunately, this implies I must sacrifice a considerable amount of detail from the books reviewed.

Published by Jeroen van der Heijden

Professor Jeroen van der Heijden works at the intersection of regulation and governance, with a specific interest in regulatory stewardship and dynamic governance regimes. As Chair in Regulatory Practice at the School of Government, Victoria University of Wellington, he is involved in world-leading research on regulatory practice and contributes to the training of those involved in regulatory issues. His research is organised around key-innovations in regulatory practice (including the use of behavioural incentives in regulation, regulatory intermediaries, and the resilience of regulatory regimes) and critical policy objectives in New Zealand and elsewhere. This allows him to draw lessons from New Zealand and elsewhere to improve New Zealand regulation and its impact on economic and social performance, and to showcase the state-of-the-art in regulatory practice in New Zealand to the rest of the world. Jeroen is an Honorary Professor at the Australian National University (School of Regulation and Global Governance), and previously held positions at the University of Amsterdam (College of Law), Delft University of Technology (Faculty of Technology, Policy and Management), and Wageningen University (Environmental Policy Group). He has published widely on regulation and governance, including five books and over 70 articles in leading academic journals.

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