Self-Regulation in the Regulatory Void

Abstract

Corporate self-regulation has been blamed for many of the worst environmental and financial catastrophes of the twenty-first century, but the failure of self-regulation in these catastrophes has been rivaled by failures of government regulation. This article explores the consequences of adopting self-regulation under conditions of failed or deficient government regulation. First, it identifies the conditions that produce the phenomenon of “blue moon” self-regulation, or self-regulation that successfully achieves public regulatory goals. Second, it develops a typology of regulatory voids in which self-regulation is commonly adopted and analyzes its prospects for success under each set of conditions. It concludes that prospects for self-regulatory success are particularly bleak in regulatory voids that have been created by the concerted political opposition of regulated entities.