Regulatory Capabilities: A Normative Framework for Assessing the Distributional Effects of Regulation

Abstract

This paper develops the normative concept of "regulatory capabilities", which asserts that nobody – individuals, groups or entities – should be subjected to a regulatory regime – public or private, domestic or transnational – without some freedom to choose. Choice in this context means the ability to accept or reject a regulatory regime imposed by others or to create an alternative one. A mere formal option is not sufficient; the freedom to choose requires real alternatives. The concept of regulatory capabilities has particular traction in the transnational context where private, hybrid public-private and public actors compete for influence, shape domestic regulation and in doing so limit the scope for democratic self-governance. It also helps illuminate the distributional effects of domestic regulation. As such, "regulatory capabilities" is a contribution to the general debate on the normative foundation of regulation and governance.