Theories of regulation conceptualize the task of the agencies of the modern state in terms of the public interest. Regulatory agencies, in this conventional view, should ensure the efficient allocation of scarce resources and secure distributive justice and democratic citizenship. Many agencies nicely fit this aggregative mold, but not all. A significant subset of the regulatory practice—the second half of the universe of regulation—deals with a different task: delineating the terms of our interpersonal transactions, forming the infrastructure for our dealings with other people, both private individuals and firms. This Article focuses on these relational regulators, which regulatory theory marginalizes or neglects.
Descriptively, we show that many agencies are best understood as devices that supplement or supplant the role of courts in addressing horizontal, rather than vertical or aggregative, concerns. In other words, many of the practices and operational codes and sensibilities of these agencies are best conceptualized as responses to the horizontal challenges of the creation of the infrastructure for just interpersonal relations in core social settings, such as the workplace or the market. Normatively, we argue that the seeming consensus among theorists of both regulation and private law, in which these tasks belong to judges rather than administrators, is misguided. In many contexts—increasingly prevalent in contemporary society—agencies, rather than (or in addition to) courts, may well be the appropriate institution, or at least an additional institution, for the articulation, development, and vindication of our interpersonal rights.
The analysis yields the initial steps towards a more complete theory of relational regulatory agencies that makes sense of their core practices. We demonstrate the regulatory implications—in both substance and form—of undertaking the role of establishing and maintaining the infrastructure for just interpersonal interaction, and we advance a preliminary account of the regulatory toolkit appropriate to this relational task.
Dagan, Hanoch and Kreitner, Roy, "The Other Half of Regulatory Theory" (2020). Connecticut Law Review. 430.