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A theory of risk colonization The spiralling regul
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A theory of risk colonization: The spiralling regulatory
logics of societal and institutional risk
Article in Economy and Society · February 2006 DOI: 10/03085140500465865 · Source: OAI
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A theory of risk colonization:
the spiralling regulatory
logics of societal and
institutional risk
Henry Rothstein, Michael Huber and George Gaskell
Abstract
Explanations of the growing importance of risk to regulation identify three processes; the need to respond to newly created and discovered risks; the growth of regulatory frameworks; and the use of the risk instrument as an organizing idea for decision-making in modernity. Synthesizing these explanations, we propose a theory of risk colonization. We introduce a distinction between societal and institutional risks, the former referring to threats to members of society and their environment, and the latter referring to threats to regulatory organizations and/or the legitimacy of rules and methods of regulation. We argue that pressures towards greater coherence, transparency, and accountability of the regulation of societal risks can create institutional risks by exposing the inevitable limitations of regulation. In the first stage of risk colonization, framing the objects of regulation as ‘risks’ serves as a useful instrument for reflexively managing the associated institutional threats. This can be followed, in a second stage, by a dynamic tension between the management of societal and institutional risks that results in spiralling feedback loops. The very process of regulating societal risks gives rise to institutional risks, the management of which sensitizes regulators to take account of societal risks in different ways. We discuss links between this theory and the concept of governmentality and conclude with some speculations about the possible positive and negative consequences of risk colonization.
Keywords: societal and institutional risk; regulation; governance; risk colonization; governmentality.
Henry Rothstein, CARR, London School of Economics and Political Science, Houghton Street, London WC2A 2AE, UK. E-mail: H@lse.ac
Copyright # 2006 Taylor & Francis ISSN 0308-5147 print/1469-5766 online DOI: 10/
Economy and Society Volume 35 Number 1 February 2006: 91 / 112
simultaneous expansion as the ‘duality of risk’ (Huber 2002; Power 2004; Ciborra 2004). 1 This paper starts with an examination of three contemporary approaches to understanding the growing centrality of risk for regulation. We go on to advance a synthesis of these approaches that accounts for the more general centrality of risk to regulation. Broadly, we argue that, under conditions of contemporary regulation, characterized by heightened oversight and account- ability, regulators are under greater pressure to account for their constrained ability to manage their regulatory objects. Constructing regulatory objects in terms of risk, however, provides a defensible procedural rationality for regulators to manage both their regulatory objects and their enhanced institutional threats. We argue that this reflexive aspect of risk governance can lead to a phenomenon of ‘risk colonization’, whereby risk increasingly comes to define the object, methods, and rationale of regulation. We go on to argue, however, that ‘risk colonization’ can have a spiralling tendency where mismatches between the management of societal and institutional risk drive regulators to ever further activity. We argue that the logic of ‘risk colonization’ presents a fundamental challenge for traditional conceptions of the methods, strategies, and purposes of risk regulation, and, in the wider perspective, for systems of governance.
The growing importance of risk to regulation: three approaches
We now outline three broad theories or frameworks explaining the growing importance of risk for regulation in recent years. This ‘fuzzy set’ of theories brings together a range of literatures that often overlap, but which foreground or privilege different aspects of the relationship between risk and regulation. The first approach foregrounds the role of newly created or discovered hazards in stimulating risk regulation. The second approach, conversely, foregrounds institutional dimensions of regulation in stimulating a focus on risk. The third approach, meanwhile, foregrounds the concept of risk itself as an organizing concept for decision-making under modernity.
The risk society is a regulatory society
The first approach views the growth of risk regulation as a functional response to newly created and discovered societal risks. Scientific and technological advances have solved many of the problems that confronted traditional societies, at least in the developed West. New risks constantly appear, however, as negative externalities of such progress, which, in turn, demand regulatory responses. New risks can appear within traditional sectors such as food or energy production, as well as within less traditionally conceived categories of risk such as threats to privacy associated with the Internet. Changes to the
Henry Rothstein et al.: A theory of risk colonization 93
methods and organization of production and services can also create risks, from the BSE and foot-and-mouth crises in the UK to the shift towards private pension schemes. Moreover, research and innovation have also enabled greater understanding, detection, and control of previously unidentified or unmeasured risks. Just as the discovery of microbiological hazards prompted the introduction of food hygiene legislation a century ago, so today new knowledge and detection techniques have led to a widening range of targets and possibilities for regulatory intervention, such as controlling exposure to trace chemicals, satellite tracking of criminals in the community, or natural hazard mitigation. Regulatory intervention to manage the negative externalities of technolo- gical and social progress is nothing new. The foundations for pollution control in the UK, for example, were laid in the 1863 Alkali Act. Some argue, however, that the risks of late modernity are different in type and scale from those of previous eras and are beyond the control of societal mechanisms. In the Risk Society, Beck controversially argues, for example, that the logic of capitalist development in late modernity threatens to undermine itself by replacing class relationships with risk relationships as the key factor in societal conflict and change (Beck 1992; see also Giddens 1991). Others argue that, at the very least, the pace and character of scientific and technological change challenge traditional models of risk regulation by necessitating action that goes beyond the boundaries of the nation-state and involves new types of actors, bureau- cracies, and distributive outcomes. From this general perspective, the growth of risk regulation is a functional response to objective risks that confront modern society. The risk society is, therefore, necessarily a regulatory society.
The regulatory society is a risk society
The second approach focuses less on societal risks as driving the growing centrality of risk to regulation, but instead foregrounds the changing scope and character of state and non-state regulatory frameworks. From this institution- alist perspective, risk regulation is not an unmediated response to risks that are self-evident, such as discussed above. Instead, risk regulation is dependent on the agency of human actors and, more importantly, institutions to discover, categorize, and act upon risk. In particular, this approach focuses on the development of regulatory frameworks, and suggests at least two ways in which contemporary regulatory trends themselves have led to the growing centrality of risk to regulation. First, the centrality of risk can be related to the rise of the so-called ‘regulatory state’ in the latter half of the twentieth century. This development is broadly argued to be the consequence of a shift in policy emphasis from macro-economic stabilization and redistributive welfare policies towards the improvement of economic efficiency (Majone 1994: 77 / 80; Loughlin and Scott 1997). That shift has seen the state reduce its role as a direct provider but
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example, decision-making can be conducted under the cloak of administrative procedures and justified by elected politicians with recourse to political manifestos. But the rise of the regulatory state, and, in particular, the rise of ‘independent’ regulatory agencies, has forced regulators to set and justify aims and trade-offs in more public arenas, thus heightening the salience of institutional risks associated with their regulatory activity. For example, regulators are under growing pressure to justify their actions as bureaucratically rational and defensible in the face of political, executive, and judicial scrutiny. Recent years have seen both the public and private sectors caught up in an ever tightening grip of audit and target cultures, creating new criteria for organizational success and failure (Power 1997). As Hood and colleagues observe, regulation inside government / the regulation of regulators / has expanded so rapidly that there is now a veritable army of ‘waste-watchers, quality police and sleaze-busters’ auditing and inspecting the activities of public-sector organizations (Hood et al. 1999: 207). Moreover, regulators increasingly need to consider how to defend decisions to the European Court of Justice and the World Trade Organization (Vogel 2003: 567). At the same time, increasing external transparency and accountability have exposed organizational behaviour in the public and private sectors to wider audiences of spectators and quasi-controllers. Examples include corporate reporting, freedom of information requirements, and the dissemination of information through the Internet, NGOs, and the mass media. The food domain has been a particular site for a range of experiments in ‘open’ and ‘participative’ regulatory decision-making (see Rothstein 2004; Gaskell et al. 2001). Regulators are, therefore, under greater additional pressure to justify their actions to diverse publics and interest groups who often have diverse risk perceptions and tolerances that fail to align with bureaucratic rationales. As Douglas (1994) has observed, public anxiety about risk appears to be inversely related to the degree of control of societal risks, or, to put it another way, as life becomes safer so do the public find other risks to worry about. The move from a ‘tell me’ to a ‘show me’ world has variously been argued to be the consequence of high-profile policy failures such as the collapse of private pension schemes, the BSE crisis, and of a more generalized distrust of government. Perhaps more fundamentally, the shift may have its origins in the need to compensate for inherent accountability and transparency deficits created by the outsourcing of the state’s policy functions to non-majoritarian regulatory institutions (Lodge 2003). Whatever the origin, greater transpar- ency and accountability have enhanced institutional risks for regulatory systems by transforming behaviours and outcomes that previously went unrecorded or were considered acceptable within bounded organizational settings, into recorded successes and failures that are held to account by wider audiences with often conflicting judgement criteria. Counter-intuitively, ‘good’ governance can be a source of risk itself. From these points of view, the regulatory society is a risk (generating) society.
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Risk as an organizing idea for decision-making in modernity
So far, we have discussed approaches that explain the growing centrality of risk to regulation in terms of the expanding range of societal risks that are regulated and the institutional risks associated with regulating societal risks. But what is it about risk that makes it successful as a subject and instrument for regulation? The third approach focuses on the idea of risk as an organizing concept for the management of uncertainty. Risk is increasingly conceived not merely as the means to describe the objects of regulation and associated institutional threats but also as a method for organizing regulatory activity. Regulatory activity can often appear to be irrational, with institutional factors such as path dependencies, interest group pressures, and organizational cultures determining levels of regulatory intervention (Hood et al. 2001). In recent years, however, there has been greater focus on enhancing regulatory efficiency, by setting priorities and allocating scarce resources according to risk (e. Williamson 1981; Flyvbjerg et al. 2003). At its simplest, risk-based governance is about prioritizing activities according to the impact and probability of societal risks, whether for standard-setting or compliance purposes. In the UK, risk-based regulation has been established for many years in a few specific policy domains such as local road safety, occupational health and safety, and the nuclear industry. Currently, however, risk-based governance is being more broadly promoted across policy domains as part of the ‘modernizing government’ agenda, as a way of maximizing the benefits of regulation while minimizing the burdens on regulatees by offering ‘targeted’ and ‘proportionate’ interventions (Hampton 2005; UK Cabinet Office 1999; Black 2005). By taking account of probability as well as potential damage, risk-based regulation has been promoted as an economically rational decision-making instrument for managing the difficult trade-offs between competing priorities that are inherent in any regulatory activity. The probabilistic approach, for example, is argued to help find a way of ‘balancing the benefits of positive risk taking against our risk aversion to the costs that may follow’ (Kemshall 2003: 6). The growing focus on risk, however, may equally be understood as the latest incarnation of the well-known strategy of ‘protocolization’ adopted by bureaucracies when faced with challenges to their activities and legitimacy (Hood and Rothstein 2001). It is commonly argued, for example, that numerical and calculative rationales can augment the legitimacy of decision- making, irrespective of their methodological validity (e. Porter 1995; Rose 1999: 197ff.). From that point of view, risk assessment can be seen as a way of formalizing organizational operations in order to provide bureaucratically rational ‘due diligence’ defences in the face of increased accountability pressures. Studies of judicial review of risk regulation in the US, for example, suggest that, while the courts tend to uphold regulatory agency decisions if regulators have followed their own risk assessment guidelines, the courts
Henry Rothstein et al.: A theory of risk colonization 97
overseas trading and insurance in the fourteenth century and the development of probability theory in the eighteenth century (Clark 1999; Luhmann 1993: ch. 1). He argues, instead, that the particular appeal of risk is that it can accommodate or legitimate the inevitable failures of ‘rational’ decision-making. Risk, he argues, provides a solution, however temporary, to a key quandary of rationalization. The problem he identifies is that rationalization has to confront the problem of failure because there will always be limits to our knowledge, events are fundamentally unpredictable, and we have only limited ability to effect change. Simon (1957) has similarly described this problem in other contexts as ‘bounded rationality’. The concept of risk, however, compensates for the inherent uncertainties of decision-making by transforming decision-making into a probabilistic assessment of success and failure. The dilemma of imperfect decision-making is, therefore, resolved, because potential failures are absorbed by the explicit anticipation of failure inherent in the use of the risk concept. For Luhmann, therefore, the success of risk grows from its paradoxical constitution. Characterizing issues, events, and problems as risks makes them controllable in so far as total control is considered impossible. As Mary Douglas and Aaron Wildavsky comment, ‘Can we know the risk we face now or in the future? No, we cannot; but yes, we have to act as if we do’ (1982: 1). From that perspective, risk provides an organizing concept for societal decision-making under uncertainty and is a key characteristic of modernity. For example, as regulatory systems attempt to control events that have formerly been beyond control, the process of decision-making transforms those events into risks as a way of rationally managing the limits of regulation. Consequently, both old and new problems in ever more areas of organized life start to be constructed in terms of probabilities and damage. In idealized terms, risk is the necessary accompaniment of the transformation of a society of pawns, directed at the whim of the gods, into a society of actors managing their own destiny.
The spiralling logics of societal and institutional risk management
In the last section we reviewed three different explanations for the growth of risk as a regulatory concern; on these foundations we now develop an account of the ‘colonization of regulation by risk’. We argue that the growing centrality of risk to regulation in the post-war years is less to do with a growth of societal risks, but is rather a consequence of the growth of regulatory frameworks to regulate societal risks and the need to manage the associated institutional risks of risk regulation. These two types of risk are rarely distinguished in discussions of risk regulation. We contend, however, that drawing an analytical distinction between societal risk and institutional risk and understanding their dynamic relationship can help explain more generally the growing centrality of risk to regulation and governance systems.
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From societal risk to institutional risk
If the organized management of societal risks inherently entails institutional risks, it is perhaps surprising that the centrality of risk to regulation is a recent phenomenon and its use is not more widespread. We argue, however, that the phenomenon is dependent on the appetite of regulatory systems for internal and external control, scrutiny and accountability, or, in other words, the extent to which regulation is itself subject to ‘regulation’. As regulators are put under increasing pressure to account for their decisions and actions, risk becomes an attractive concept for rationalizing the practical limits of what regulation can achieve and rendering given degrees of regulatory failure acceptable. One starting point for this argument is to consider cases where controls or accountability pressures on the regulation of societal risks are relaxed or non- existent, such as is often the case in the early stages of regulation or slack self- regulatory regimes. Under such conditions, regulatory behaviours and even failures present relatively low institutional risks in the absence of mechanisms for challenge or even observation. There are, therefore, few incentives to proceduralize risk assessment and management activities. Instead, such activities tend to be ad hoc and methodologically diverse and determined by contingent organizational pressures and ways of working. One example is provided by the UK regime for controlling chemical ingredients that leach from plastics food packaging materials into food. Plastics manufacturers established a voluntary, commercially run and opaque self- regulatory regime in the early 1950s (see Rothstein 2003a). State regulators refused to endorse the regime when asked by manufacturers, however, because controls were lax and posed considerable institutional risks for regulators. Regulators resolved this problem, however, not by introducing a statutory regime, but by turning a blind-eye to the voluntary regime. Regulators thus minimized their own institutional risks, but, as a consequence, slack controls persisted for decades and hundreds of chemical ingredients were approved without challenge on the basis of scant or no evidence. The situation changed only when systematic and legally defensible risk assessment procedures were introduced under new statutory harmonized European regulation in the 1980s. The plastics case is suggestive of how the proceduralization of risk assessment is related to the form of regulatory regime. As regulation becomes subject to greater scrutiny by, for example, the executive, judiciary, organized interests, or the public, then it might be expected that organizational behaviours and failures are turned into potential liabilities. Regulators, therefore, need to find a way of accounting for, and justifying, performance in order to minimize institutional risks. Unlike politicians, who can justify decision-making by recourse to political programmes, manifesto pledges, or parliamentary votes, regulators are constrained to justify decision-making by recourse to bureaucratic rationalizations that are tightly constrained by a panoply of regulatory frameworks and due process criteria. Constructing regulatory problems as risk problems offers a solution to regulators by
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perversely allocating scarce resources to managing institutional risks at the expense of societal risks. One example would be food safety inspectors meeting performance targets for sampling rates by undertaking cheap and easy tests for watered-down milk rather than expensive and complex tests for microbiolo- gical safety. Even if risk-based approaches are relatively successful in managing institutional risks originating within the government and the judiciary, regulators can still be exposed to institutional risks from external sources. For example, if organized interest groups and the public do not share the bureaucratic rationality of risk-based approaches, they may challenge the rules and methods of decision-making and even the legitimacy of regulators. One example is train safety, where regulators are put under pressure to allocate more resources to preventing infrequent multiple-fatality accidents that attract high levels of media interest and lobbying activity by victims groups than to preventing individual fatality accidents that attract less media interest but involve more deaths overall. This is one example of how institutional risk outcomes can shape normative conflicts on the weighting of high-probability/ low-consequence events against low-probability/high-consequence events. In general, we argue that the tendency for the inadequate management of societal risks to produce or amplify institutional risks creates the conditions for the rise of explicit institutional risk management. We might expect to see, for example, the evolution of instruments to take into account a diverse set of institutional risks, such as reputational risks, legal liabilities, or risks of failing to meet performance targets. Such instruments can take the form of ad hoc or iterative procedures that attempt to limit blame, for example, by co-opting stakeholders into decision-making processes to manage procedural legitimacy or by prioritizing regulatory interventions according to reputational concerns. The systematic embedding of ‘risk communication’ in regulation is another example, which can be used to persuade the public of the integrity of regulatory decisions, in addition to helping the public make ‘informed’ choices about risk. But residual failures can necessitate the introduction of more systematised institutional risk assessment and management methods as organizations seek to defend the legitimacy of decision-making procedures. The Financial Services Authority, for example, now routinely assesses the risks of failing to meet political targets such as market and public confidence, along with financial risks. The UK’s Health and Safety Executive factors what it terms as ‘societal concerns’ into its risk assessment and management systems. ‘Societal concerns’ are taken to be public concerns generated around issues such as train safety or children’s activity centres, which regulators consider to be adequately managed but generate such public anxiety that they create reputational and legitimacy problems for regulators. The elaboration of formalized metrics for measuring ‘societal concerns’ is being advocated for use in resource allocation decisions within a growing range of policy domains such as the environment and food safety (e. Environment Agency 2004b). In such cases, risk-based
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decision-making starts to elide important distinctions between societal and institutional risks. In summary then, the growing centrality of risk to regulation can be driven by the institutional risks of regulatory control and is characterized by the development of systematic and sophisticated reflexive use of the risk instrument as a defensible means for justifying the regulation of societal risks. Framing the objects of regulation as risk-decision problems provides a way of managing the institutional externalities of regulatory decision-making. Institutional risks, however, can become a category for control in their own right, if they cannot be reflexively handled by the management of societal risk. In such cases, we can see parallel developments in the explicit systematization of procedures and protocols for managing institutional risks. The relationship between risk and regulation can, therefore, evolve from isolated, case-by-case assessments of societal risks to progressively more systematic risk assessments of institutional risks. This process could be described as the first step in the colonization of regulation by risk ; borrowing the term ‘colonization’ from the organizational studies literature where it is used to describe external pressures for change that penetrate into the ‘genetic codes’ of organizations and transform their core outlook and workings (Laughlin 1991). In our thesis, the mechanism driving risk colonization is the need for regulatory systems to account for their own limitations, and as such regulation becomes conceived and managed as an object of risk management, as much as risk becomes conceived and managed as an object of regulation.
From institutional risk to societal risk
Identifying the category of institutional risk is not new. Power (2004), for example, has observed the close linkages between societal and institutional risk management, arguing that institutional risks are a form of secondary risk. Our contention, however, is that not only do the residual failures of societal risk management stimulate institutional risk management, but also that the reverse is also true: the concentration on institutional risk management can shape the perception and management of societal risks. That latter process can happen in a number of different ways. A greater concentration on institutional risk can sensitize regulators to different dimensions of, and even new, societal risks for which they could be held accountable. This can have positive benefits if it leads to better management of societal risks. For example, awareness of institutional risk can lead to more research, greater professionalization, more robust evidence- based decision-making and associated regulation. Institutional risk could be seen as having a challenge function because it can force regulators to reflect on assumptions and consider aspects of regulatory problems that were previously overlooked. Crises can thus play an important role in forcing greater attention
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Risk colonization
Somewhat speculatively, we propose that the dynamic relationship between societal and institutional risks leads to a third, spiralling aspect of colonization. From a systems perspective, regulatory regimes can be understood as control systems that are designed to achieve particular societal goals. The more coherent the regulatory regime in terms of goal setting, interventions, and monitoring of planned social change, the greater will be the awareness of the limitations of regulatory intervention. It might be expected, therefore, that as regulatory regimes become subject to greater scrutiny and accountability, either internally or externally, risk becomes an important concept for managing both the objects of regulation and the limits of regulatory activity itself. Under some of the circumstances described above, however, the process of regulating societal risks can give rise to institutional risks, the management of which sensitizes regulators to take account of societal risks in different ways, which may in turn lead to the identification of new institutional risks. This spiralling aspect of risk colonization then, involves dynamic feedback loops between societal and institutional risk. From this perspective, it might be speculated that the colonization of regulatory decision-making by risk can evolve in a number of different directions. First, it might be expected that problems brought within the realm of regulation become increasingly conceived as risk as an attempt to manage the negative institutional externalities of decision-making. The management of paedophiles in the community in the UK, for example, was transformed from a social welfare problem into a risk management problem when the introduction of a sex offenders register in 1997 increased the accountability of the police and probation services for their management of potential recidivism (Hood and Rothstein 2001; Kemshall 2003). Similarly, in recent years, the conception of food allergens has been slowly transforming from a consumer health issue, managed through medical care, into a food safety risk issue, managed through food safety systems, as food businesses have become aware of their potential legal liabilities (Rothstein 2005). Second, the process of colonization can shift problems elsewhere, creating new risks that have to be taken up by other actors and institutional settings. The introduction of risk assessment into flood insurance regimes, for example, has resulted in the management of unacceptably high flood risks by price hikes or insurance exclusion, and in so doing has shifted institutional risks from insurers onto housing markets and individuals (Sayers et al. 2002). Similar issues are arising with genetic screening. 4 Risk, from this perspective, generates new risks. Third, attempts at reconciling the management of societal and institutional risk can lead to ever more diverse risk management strategies as incompatible understandings and perspectives are brought to bear. For example, in Germany, as nuclear energy became subject to civilian rather than military control, optimistic risk assessments were subject to scrutiny and challenge by a growing number of actors. The German government attempted to resolve the
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situation by referring decision-making to the courts, but that only enhanced the problems because additional layers of legal conflict were grafted onto the scientific conflicts (Huber 1998). A more recent example is the enquiry into GM food in the UK, where the processes of bringing stakeholders into decision-making processes established new areas of concern, such as ethical and moral issues, which then themselves created new dimensions for regulation that needed further reconciliation and resolution (Gaskell 2004). Indeed, the tendency towards plurality could mean that, while risk forms a lingua franca for decision-making, the actual practices of risk assessment and management may be tending towards a Tower of Babel.
Implications and conclusions
In this paper, we have reviewed three broad approaches that attempt to explain the growing centrality of risk to regulation. The first approach considered how the dynamics of the risk society can stimulate regulation; the second foregrounded institutional aspects of regulation in stimulating a focus not just on societal risk, but also institutional risk as regulation itself becomes subject to regulation; and the third approach focused on the attraction of the risk concept for rationalizing the limits of regulatory success. We argue that these are helpful accounts of the growing centrality of risk to regulation, but we see them as partial explanations. Instead, we synthesize those approaches to develop a theory of risk colonization, which proposes a testable mechanism for the observed growing centrality of risk to regulation. We argue that the growing importance of risk for regulation unfolds in two dimensions; that is, with respect to the control of both societal and institutional risks. These two dimensions are linked by increasing pressures towards ‘good governance’ from within the state and civil society, which, in trying to improve the coherence of regulatory interventions through increased scrutiny and accountability reveals the inevitable limitations of regulatory interventions. The consequent need to justify the limitations of regulatory intervention turns attention to the concept of risk, which simultaneously characterizes the objects of regulation and reflexively manages the negative institutional externalities of the limits of regulatory action. Risk then, in effect, is a necessary feature of the regulatory state as an instrument of systems maintenance where regulation is conceived as a system for social control. This first step in the colonization of risk, however, is further stimulated by misalignments between the processes of managing societal and institutional risk. Misalignments can occur, for example, because of methodological challenges, institutional constraints, or normative conflicts. We then argue that those misalignments can create spiralling relationships between the management of societal and institutional risks. These processes may explain the rise of what is termed ‘integrated risk management’, which attempts to encompass more risks, satisfy more stakeholders, and make possible more trade-offs.
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architectures, interest configurations, and cultures across regimes can be expected to generate varied levels of information on regulatory performance that feed through the system in different ways and prompt different kinds of responses. If, for example, information on regulatory performance is not routinely gathered, regime complexity attenuates signals of regulatory failure, or blame is not readily attached to failure, then it might be expected that the process of risk colonization will be slow. Moreover, it would be interesting to explore the factors shaping the profile of, and relationship between, institutional risks across regulatory regimes, for example, by disaggregating institutional risks into those faced by regulators (regulatory risks) and regulatees (business or regulatee risks). Relatedly, international comparative work would be valuable in correlating the emergence of risk concepts with national institutional settings. More generally, it would also be important to consider the emergence of risk concepts within extended governance systems. Governance systems may act as vectors of transmission for risk beyond traditional regulatory regimes, but it may also be that institutional fragmentation, plural rationalities and looser accountability structures act as countervailing forces. Governmentality scholars may find this a fertile empirical domain to explore the evolution and dynamics of, in their terms, disciplinary power, by foregrounding the institutional mechanisms that stimulate pervasive risk practices. This theory of risk colonization is an attempt to explain what we take to be some of the conceptual consequences of attempts to regulate risk. Risk colonization productively captures the role of risk in shaping the evolution, characteristics, and dynamics of the regulatory state, or at least models of the regulatory state that place an emphasis on internal and external scrutiny and accountability. Such a theory can be judged by the extent to which it presents a simplified, yet convincing picture of a social reality. Another criterion for the assessment of a theory is the extent to which it offers an empirical heuristic and/or a heuristic for actors in the policy process. By heuristic we mean offering an interesting way forward, a new way of looking at issues currently of interest or concern. In this context we offer some suggestions. The empirical heuristic is the value of the colonization theory as a framework for further research into, for example, comparative analysis of the growth and form of risk regulation in different countries and in different sectors of society; and the relations between organizational risk management and trust. The policy heuristic is not a quick solution to a current problem, but rather a sensitizing device. Those who enter the waters of risk management may find that the ripples extend far and wide and may well change the shape of the pool itself.
Acknowledgements
We would like to thank Robert Baldwin, Julia Black, Martin Lodge, Joan O’Mahony, Yuval Millo, Michael Power and Michael Spackman and the
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anonymous referees for their helpful and encouraging comments on earlier versions of this paper. We also benefited from discussions of earlier versions of this paper with CARR research students, the Kings Centre for Risk Management (London), and at conferences hosted by EASST/4S (Paris, 2004) and the ESRC Social Contexts and Responses to Risk Network (Canterbury, 2005). The support of the Economic and Social Research Council (ESRC) and AON is gratefully acknowledged. The work was part of the programme of the ESRC Centre for Analysis of Risk and Regulation.
Notes
1 See also Power (2004) and Black (2005) who have respectively differentiated between primary and secondary risks, and internal and external risks. 2 For example, the organization, conventions, and traditions of traditional govern- ment departments, and the pressures of electoral cycles can hamper the development of necessary expertise and create policy commitment problems. 3 Indeed, more generally, De Goede (2004: 213) argues that, in the finance domain, complex risk management facilitates financial risk-taking by insulating financial decision-making against failure. 4 Ericson and Doyle (2004) also show in detail how the maintenance of insurance coverage for terrorism in the aftermath of 9/11 was made possible by reconfiguring the roles and responsibilities of governments, insurance markets, and clients.
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A theory of risk colonization The spiralling regul
Module: Sociology and demography
University: University of Cambridge
