Academic journal article Missouri Law Review

Private Complements to Public Governance

Academic journal article Missouri Law Review

Private Complements to Public Governance

Article excerpt

If Philip Hamburger's arguments were to win the day, and the administrative state were abolished or significantly reduced in size and scope, what would replace it? (1) If it were abolished completely, perhaps the simplest answer could be given: only the classical institutions of government created by the U.S. Constitution--the Legislature, Executive, and Judiciary--would remain. (2) In the more likely event that the administrative state were reduced in size or scope, one or more alternative approaches might be needed to fill the resulting regulatory gaps. Indeed, a principal justification for the administrative state is that the needs of modern regulation are beyond the capacity of the classical institutions of government. (3) If so, then without administrative agencies, some other institution or approach would be needed to address modern regulatory problems.

This Article suggests that private governance offers an attractive alternative or complement to the administrative state. It is commonly assumed that without administrative agencies, there would be no regulation. As a foundational matter, this Article challenges the notion that there are only two, mutually exclusive options: governmental regulation or no regulation all. Although it is perfectly natural for public law scholars to focus primarily on regulation through government institutions and programs, much regulation is in fact accomplished via mechanisms outside the administrative state. (4) At least in some circumstances, it is not only possible but may even be preferable to use such private governance--alone or in conjunction with public regulation --to achieve public goals.

Before this possibility can be assessed, "private governance" must be defined. As the term itself suggests, private governance has two components that are both self-evident and yet also warrant elaboration. First, private governance must be private, which most importantly means nongovernmental. (5) It thus includes any action by people, entities, or institutions that exist outside of government. Second, private governance must be governance, defined broadly as actions in pursuit of traditionally governmental ends. (6) These ends may include the protection of public values, the provision of public goods, and the regulation of social conduct in a manner that is beneficial for society as a whole.

To make this abstract definition of "private governance" more concrete, Part I of this Article begins by offering a number of examples of how private governance presently complements the administrative state. Part II suggests that the concept of comparative institutional advantage offers a touchstone for identifying situations in which private governance may be an effective and attractive alternative to governmental regulation. Recognizing that private governance is not always the best option, however, Part II also suggests some limitations on its use.

I. A SPECTRUM OF PRIVATE ACTION TOWARD PUBLIC ENDS

There are a variety of ways in which private governance can be used to achieve public ends, and the options can best be understood by organizing them along a spectrum. At one end of the spectrum are regimes that use or leverage private governance mechanisms but are designed, created, driven, and controlled by government. At the other end of the spectrum are regimes that are designed to achieve traditionally governmental ends but are independently designed, created, driven, and controlled by private sector actors and institutions. Frequently the focus of economic analysis, scholars describe these latter regimes as "private ordering" or "private governance." (7) Between the two extremes are regimes that mix elements of public and private governance, using each approach in some measure to achieve regulatory goals. Over the last fifteen years, public law scholars have increasingly noted and examined these regimes, referring to them as "public-private hybrids." (8) Figure 1 offers a visual representation of the full spectrum. …

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