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 slightly
different meanings according to context. For example:

in biology, gene regulation and metabolic regulation allow living organisms to adapt to their
environment and maintain homeostasis;

in government, typically regulation means stipulations of the delegated legislation which is drafted by
subject-matter experts to enforce primary legislation;

in business, industry self-regulation occurs through self-regulatory organizations and trade associations
which allow industries to set and enforce rules with less government involvement; and,

in psychology, self-regulation theory is the study of how individuals regulate their thoughts and
behaviors to reach goals.

Social Edit

Regulation in the social, political, psychological, and economic domains can take many forms: legal
restrictions promulgated by a government authority, contractual obligations (for example, contracts
between insurers and their insureds[1]), self-regulation in psychology, social regulation (e.g. norms), co-
regulation, third-party regulation, certification, accreditation or market regulation.[2]

State-mandated regulation is government intervention in the private market in an attempt to implement

policy and produce outcomes which might not otherwise occur,[3] 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 controls on market entries, prices, wages, development approvals,
pollution effects, employment for certain people in certain industries, standards of production for
certain goods, the military forces and services. The economics of imposing or removing regulations
relating to markets is analysed in regulatory economics.

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.[4]
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.[5]

Reasons Edit

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This article contains weasel words: vague phrasing that often accompanies biased or unverifiable
information.

Regulations may create costs as well as benefits and may produce unintended reactivity effects, such as
defensive practice.[6] Efficient regulations can be defined as those where total benefits exceed total
costs.

Regulations can be advocated for a variety of reasons, including[citation needed]

Market failures - regulation due to inefficiency. Intervention due to what economists call market failure.

To constrain sellers' options in markets characterized by monopoly

As a means to implement collective action, in order to provide public goods

To assure adequate information in the market

To mitigate undesirable externalities

Collective desires - regulation about collective desires or considered judgments on the part of a
significant segment of society[vague]

Diverse experiences - regulation with a view of eliminating or enhancing opportunities for the formation
of diverse preferences and beliefs[vague]

Social subordination - regulation aimed to increase or reduce social subordination of various social
groups[citation needed]

Endogenous preferences - regulation intended to affect the development of certain preferences on an

aggregate level[vague]

Professional conduct - the regulation of members of professional bodies, either acting under statutory
or contractual powers.[7]
Interest group 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.

History Edit

Regulation of businesses existed in the 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 the European Early 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 contracts.[8]:5

Modern industrial regulation can be traced to the Railway Regulation Act 1844 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 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 which had its roots in earlier state-based regulatory
commissions and agencies. Later agencies include the Federal Trade Commission, Securities and
Exchange Commission, 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 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 capture,
which led to extremely detailed laws creating the United States Environmental Protection Agency and
Occupational Safety and Health Administration.

See also Edit

Consumer protection

Rulemaking

Regulatory state

Deregulation
Environmental law

Public administration

Regulation of science

Regulatory capture

Regulatory economics

Tragedy of the commons – Depletion of a shared resource according to one's self-interests

Public choice – Economic theory applied to political science

Precautionary principle