The case for regulation has never been more acute. The trouble is that we only care about regulation when something goes wrong

Regulation and regulators get more than their fair share of bad press. So bad in fact, that one of first pledges made by Liz Truss when bidding bid for the premiership, was to scrap all remaining EU regulation in Britain by 2023. Eager to accelerate plans to get the EU law “off the UK’s statute books,” Truss argued that curbing regulation would boost growth and “make the most of our newfound freedoms outside the EU.”

Regulation is often seen as something bad for business. It’s perceived to be a drag on industry; hurdles and hoops to jump through that hinder growth and squeeze competitiveness. For firms and organisations looking to do business freely, the directives imposed by regulators are often dismissed as limitations and unnecessary costs that only serve to stifle innovation.

But is this fair? Isn’t it also true that regulation is a guarantor of quality? And in ever-competitive markets, don’t regulators act as a vital gatekeeper for standards and safety? Robert Baldwin, LSE Professor of Law Emeritus, would say that they do. In fact, regulation is not only necessary, he says, but done well, actually enhances business practices and outcomes.

“Regulation is a positive thing for consumers, investors and business organisations alike. Think about it in these simple terms: would you buy toys for your children that were unsafe? Would you invest in a toy manufacturing company that sold risky merchandise? Or would you expose your business to class action lawsuits by cutting corners on the toys and playthings you sell to families”

Regulation and regulators proactively serve markets by protecting the quality of the goods and services they trade, says Baldwin. This generates consumer and market confidence. And in certain instances, regulation can even create new markets. He cites the example of the telecoms industry. Radio frequency bands are directly allocated by regulators like Ofcom in the UK. Such bodies manage and maintain the world’s radio frequency spectra, making it possible for people to access the internet, use radios, televisions or mobile phones, and even travel by plane. Without them, mobile phone providers, online media, airlines and other sectors would be out of business, he says.

“Good regulation makes business happen, and is often in place prior to the market.”

Good regulation is very often effectively invisible to business and consumers alike. No one comments on performance if regulators are doing a good job, says Baldwin. It’s only when things go wrong that regulation will make the press. Take the financial crash of 2008. Lack of compliance, problems in regulatory design and implementation, weak supervision and poor regulatory capital requirements (among other things) led to the biggest bank failure of the 21^st century and a global litany of economic and social disasters that have taken decades to resolve. More recently, the deregulation of the airline industry was brought into horrible relief by two Boeing 737 crashes that claimed the lives of 346 people and led to Boeing paying out tens of billions in damages.

What really matters, says Baldwin, is getting regulation right. Leading the charge in this sense is Regulation – an on-campus programme for regulators, lawyers, consultants and executives, that Baldwin directs and teaches at the LSE campus in central London. The programme provides “formal training” in regulation – something that practitioners coming into this domain from side channels often lack, he says.

Participants come from two main camps: those regulating or advising on regulation; and those being regulated. All of them can expect a thorough grounding in “all the basics of regulation,” says Baldwin: how to strategise; how to evaluate performance; what good regulation looks like; the international dimensions at play; regulation and risk; enforcement and emerging alternatives to command and control. The programme thus looks at such matters as when to nudge, when to step in and when not to – as well as how to manage the conversation if it’s you and your company that are being regulated.

“This is a learning experience that convenes a diverse cohort of international professionals from the worlds of business, regulation, consultancy and law, and they come for diverse reasons. Some want to build the language and arguments to be ‘treated better’ by regulators. Some want an essential update on the latest thinking. Others want to see best practices based on real-world cases and explore how different approaches work. Everyone benefits from the richness of discussion and the diversity of perspectives and the networking dimension is really invaluable.”

There has never been a more compelling time to dig into the fundamentals of regulation and get to grips with the concepts, arguments and the benefits that well-executed practices engender, says Baldwin. At a time when governments in the UK and elsewhere are clamping down on regulatory resources, and when businesses around the world are simultaneously facing straitened circumstances, the case for understanding what good regulation can do has never been stronger.

“There’s so much hostility towards regulation right now, and much of it stems from poor understanding or blinkered thinking. But it’s never been more important to make sure that regulatory resources are put to best use for industry and for society, so that sustainable growth is driven and everyone’s interests are protected,” says Baldwin. “The case for regulation has never actually been more acute.”