The concept of regulation, while appearing to be easily understood, is often discussed in the literature with varied meanings. As noted by Baldwin and Cave (1999: 1-2), ‘*r+egulation is spoken of as if an identifiable and discrete mode of governmental activity, yet the term has been defined in a number of ways’. They therefore suggest it is useful to think of the word regulation being used in four different senses. First, it may be considered as a specific set of
commands where regulation involves the promulgation of a binding set of rules to be
applied by a devoted body. Second, as deliberate state influence where regulation is considered broadly and includes all state actions designed to influence industrial or social behaviour. This would include command-based regimes but also other modes of influence such as those based on the use of economic incentives. Third, as all forms of social control
or influence where all mechanisms affecting behaviour, whether state-derived or from other
sources, are considered regulatory. Fourth, while regulation is often considered restrictive and preventive, the influence of regulation may also be enabling or facilitative such as in the regulation of broadcasting operations. Many of these components of regulation (but not all) can be seen in the following definition provided by Scott, who states:
‘We can think of regulation as any process or set of processes by which norms are established, the behaviour of those subject to the norms monitored or fed back into the regime, and for which there are mechanisms for holding the behaviour of regulated actors within the acceptable limits of the regime (whether by enforcement action or by some other mechanism’ (Scott, 2001: 331)
This definition usefully directs us to the need to broaden our understanding of policing beyond criminal law enforcement to incorporate other mechanisms for regulating the behaviour of individuals, but also populations. It touches upon the potential for informal responses and there is a normative and prescriptive focus to the definition. Thus, regulation can be thought of broadly, encompassing a wide array of social mechanisms from state agencies through institutional discipline and control as in the Foucauldian sense, to individual self-control and responsibilisation as per Garland (1996; 2001). On the other
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hand, it can be viewed narrowly as in a traditional understanding of the regulation of a particular sector such as financial services, and perhaps as the quotes at the start of this chapter refer to in relation to the specific regulation of business. The concept of regulation, then, can be used to cover a broad range of processes and actions (or non-actions) which aim to provide a framework within which companies and individuals can operate in a manner appropriate and acceptable to state or mainstream norms and/or laws. It is the non-compliance of companies paying bribes within such regulatory frameworks and the ways in which this is dealt with that is of interest in this thesis. In line with this, and with reference to the academic literature on regulation, a number of specific approaches have been advocated in relation to the most appropriate means of dealing with corporate ‘misbehaviour’. This literature provides a broad set of concepts for comparing regulatory regimes (in, for example, the UK and Germany).
Thus, the nature and context of corporate bribery, in that it is embedded within business and industry, and often involves government aims and ideologies, creates numerous tensions. One key tension is that between the most relevant and effective form of control and response and the level of state intervention this should involve. Thinking in terms of ‘regulation’ provides a set of concepts for analysing how behaviour can be shaped beyond the use of traditional law enforcement and ‘policing’ approaches. While criminal law enforcement and prosecution remains significant, it is not only enforcement mechanisms (prosecution, penalties, cautioning, licensing and taxing, and disruption, etc.) but also forms of non-enforcement (self-regulation) that are key in understanding the regulation and control of transnational corporate bribery.
2.7 ‘Regulating’ corporate bribery in international business transactions
Historically there have been numerous debates between regulators and between academics as to the most appropriate approach to effective regulation. On the one hand there are those who believe that compliance to the law requires a significant element of deterrence and the use of severe sanctions and criminal prosecution. On the other hand, there are those who advocate an approach more in line with the persuasion of businesses to comply
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with the law. These polemical approaches have been referred to as models of ‘deterrence’ as opposed to models of ‘compliance’ (Reiss, 1984) although some analysts have argued it is a question of ‘when to punish; when to persuade’, incorporating aspects of both (Ayres and Braithwaite, 1992: 21). It is this latter perspective that largely reflects contemporary thinking on regulation (see 2.7.4 below).
The following section expands upon these debates and is demarcated into theories of enforcement, non-enforcement, hybrid mechanisms and integrated theories. The concepts of enforcement and non-enforcement mechanisms are referred to frequently in this thesis. Enforcement mechanisms refer to those ‘tools’, strategies and practices implemented in a formal manner by the state in order to ‘enforce’ the law. For example, criminal prosecution and civil sanctioning by the state would fall into this category. Non-enforcement mechanisms refer to those ‘tools’, strategies and practices that involve minimal or no state intervention to enforce the law: self-regulatory practices, such as those developed through business initiatives, are the most prominent example. However, non-enforcement also refers to practices of accommodation or collusion (see 2.8 below) where the state is unable or unwilling to enforce the law. Hybrid mechanisms incorporating aspects of both enforcement and non-enforcement practices, such as enforced self-regulation within business, are also possible. Integrated theories incorporate aspects of all these approaches and place them within varying conceptual and theoretical frameworks.