Adaptive regulation and systemic governance
Petri Uusikylä & Anssi Keinänen
10.3.2021
The regulatory and policymaking environment has changed significantly in recent decades. The societal decision-making environment seems increasingly multifaceted, complex and hard to predict. However, regulation – and the preparation of it – as well as governance models have remained largely unchanged. This causes problems especially when lawmakers and political decision-makers seek to resolve complex or even wicked problems. A preview of this was given during the Sipilä government’s drafting of the law to reform the Finnish health and social services (sote-uudistus). The current government’s corona measures partially add to this government. The Finnish Health and Social Services Reform will also challenge future governments. What is this phenomenon ultimately about?
In 1920, the American legal scholar Roscoe Pound summarised this dilemma well by stating that “Law must be stable, and yet it cannot stand still”. For decades, this tension between stability and adaptability has tormented lawmakers. The OECD defines regualtion as a large array of instruments with which the authorities can place demands on companies and the citizens. Regulation is normally divided according to whether it contains legal regulation (especially legal proposals that arise from drafting laws) or whether it is implemented wholly without legal regulation (e.g. managing information or self-regulation within a certain industry or professional group).
The so-called smart regulation model tries to account for the abilities of different actors to influence the outcome of the regulatory process, providing alternatives for regulation being exclusively guided by the public authorities. Arguably the model of smart regulation implements the principles of adaptive regulation. If the regulatory entity is built on the best available knowledge, regulation itself supports the accumulation of knowledge in situation where the development of the phenomenon is uncertain and regulation accounts for the interdependencies between different things and actors. However, both in everyday language and within regulation the perspective quickly turns to legislation, resulting in the perfect storm for further narrowing the view on regulation and governance.
Within governance literature this problem manifests itself in the tension between top-down and bottom-up models of governance. In general, these perspectives emerge cyclically in the alternation between a focus on centralisation and decentralisation. In recent years in Finland the demands for centralisation have manifested themselves in a longing for a centralised government, corporations and services. What we are currently witnessing is the dusk of centralisation and the new dawn of systemic and self-governance.
The forces at work behind the scenes of systemic thinking and governance are the perceptions and experiences of things becoming more complicated and the ties between things growing stronger. Decisionmakers and civil servants have noticed that things fit poorly in the boxes created by government. In the interactions between ideas, events and actors, new phenomena emerge and existing phenomena takes new forms. What is characteristic to these phenomena is that they simultaneously challenge existing knowledge while creating new and contradictory interpretations of it.
In discussions of adaptive regulation and systemic governance the discussion often falls into a black and white, stale juxtaposition of flexible vs traditional. This dichotomous and value laden lens does not render itself useful in increasing ones understanding of the models of regulation and governance of complex phenomena, in the worst case it might drive a researcher to reason in a simple and circular fashion. It must be born in mind, that even adaptive regulation and systemic governance may involve high risks and uncertainties such as hasty decisions based on lacking knowledge, contradictory situation awareness, losing sight of the big picture, partial optimisation, high transaction costs as well as difficulties aligning societal and political differences. At worst, these might weaken the citizenry’s trust in political institutions and weaken the legitimacy of the democratic system. The ongoing corona pandemic has revealed the problematic nature of traditional models of governance.
In the IRWIN-project we research the Finnish system of governance, institutions as well as management and leadership practices from an information resilience perspective. Information resilience refers to for example existing bases of knowledge, the flow of information between different actors as well as the way in which knowledge is shaped and formed throughout different exchanges and processes. We also examine national preparedness management, regulatory strategies, structures, and processes from the perspectives of legislative research and constitutional issues. National preparedness, the security of supply and national safety provide excellent opportunities to critically examine the possibilities and limitations of adaptive regulation and emergent governance.
The IRWIN-project seeks to critically analyse the possibilities and limitations of adaptive regulation and systemic governance and the limitation of information resilience in key policy issues. The drafting of the Civilian Intelligence Legislation, the Finnish Health and Social Services Reforms and the management of the Covid-19 pandemic provide an excellent starting point for an extensive review of regulatory and policy instruments. Our central research questions are, among others, the following:
In what way do the regulatory mechanisms, governance models and strategies, structures, processes and political culture of the Finnish public administration support the security of supply of information in a complex framework of national security?
How to create adaptive and information resilience-sensitive regulatory governance practices, through which national preparedness goals can be reached
How can regulatory stability and necessary adaptability as well as the trust and approval of the citizens toward the system of governance be maintained simultaneously?
Our ambitious plan is to develop a research-based model of adaptive national preparedness that increases the trust of citizen’s, businesses and societal resilience as well as allows for extensive participation and inclusion in decision-making processes. At best, such a model will be as called for by Roscoe Pound: stable but not standing still.
Petri Uusikylä, Research Director, University of Vaasa
Anssi Keinänen, Professor, University of Eastern Finland
