Intermediation and Trust in the Regulatory State: More Regulation, Less Trust?

Introduction

Regulation is sometimes a manifestation of distrust, but at other times it is a manifestation of trust. When do trust and regulation compete, substitute for, and mutually support each other? How can we maximize the benefits of both? Is the proliferation of rules around us a manifestation of growing distrust or trust? Is the regulatory state necessarily a low-trust state?

The Role of Intermediaries

To answer these questions, RegTrust introduces intermediation as a governance mechanism and intermediaries as third parties in trust and regulatory interactions. Intermediaries perform various functions, including:

• Certifying products
• Reporting compliance
• Ranking organizations
• Labeling products
• Monitoring performance
• Screening behavior
• Whistle-blowing misbehavior
• Auditing organizations

The regulation literature treats them as regulatory actors, while the trust literature views them as trustees. Yet intermediaries are both trustees and regulatees, both subjects and objects of trust and regulation.

Impact of Intermediaries

Most importantly, intermediaries may determine the successes and failures, winners and losers, of trust and regulation. At their best, intermediaries reinforce regulation and trust, promoting polycentric (pluralist) structures of governance. At their worst, they undermine trust in regulation, leading to vicious cycles of failure and re/centralization (monocentric governance).

Research Focus

RegTrust examines under which conditions, why, how, and to what effects trust and regulation compete, substitute for, or mutually support each other. We problematize the role of intermediaries, develop a three-actor (triadic) model of governance, and assess its institutional macro-political consequences.

Contribution to Governance Literature

Going beyond the state of the art, this project sheds light on the multiple interactions of trust and regulation in policy and politics. It advances the theory of intermediation, enhances the interaction of trust and regulation as a central element of the governance literature, and explores the conditions that may transform a regulatory state into a high-trust state.