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The Resilience and Evolution of Economic Activism and the Role of Law

Periodic Reporting for period 3 - REVEAL (The Resilience and Evolution of Economic Activism and the Role of Law)

Reporting period: 2020-12-01 to 2022-05-31

Private regulators have acquired a prominent rule-making role in domains as diverse as product manufacturing, sustainability and finance. To a large extent these bodies determine the requirements for products to be 'safe or 'sustainable', or requirements for financial institutions with a profound impact on systemic risks.

The centrality of these private regulatory bodies does not seem to be affected by regulatory failures and crises, some of which they contributed to instigate. Quite the opposite, private regulators acquire increasing power and influence in the aftermath of a regulatory crisis, and increasingly escape supervision of States and international organisations.

The REVEAL project studies factors internal and external to these bodies that contribute to the evolution and dominant role of private regulation in several key domains. The project aims to collect comprehensive empirical evidence about factors in these bodies' composition, rules and procedures, as well as legal requirements across jurisdictions and legal areas that contribute to their resilience in spite of crises. The goal of REVEAL is to shed new light over the resilience of private regulators, with the aim to design novel form of public control and supervision over these bodies.

More specifically, the REVEAL project is close to completing its first 3-year 'discovery phase'. During this phase, which entails in its second half in particular, significant empirical research and collection of qualitiatve data. To a large extent, the project is on track for achieving the objectives set out for this phase, including to map the private standard-setting ecosystem in product safety and finance at the regional and transnational level; via interviews, collect emprirical data on the origin, structure and overtime change of such bodies; and, thereby, achieve progress in identifying means and strategies that such private regulators use to absorb internal and external crises and similar episodes overtime.
The REVEAL project has established a framework that draws on various disciplines such law and economics, European, international and transnational law, environmental and organizational studies, management, as well as political science and regulatory theories. The team has refined research problems, identified instances of resilience and crisis involving private regulators and advanced in the collection of empirical data via interviews with professionals and experts in the fields covered by the project.

A number of case studies have been identified for the empirical component of the project. These include, among the many, the International Organisation for Standardisation, responsible for the creation of technical product standards, the Forestry Stewardship Council, a body active in the domain of sustainable forestry management, the International Swaps and Derivatives Association, a trade organisation of participants in the market for financial derivatives, and a series of bodies certifying the impact on ecosystems of agricultural commodities.

The senior team members (the PI and the three assistant professors) have finalized (and are currently in the process of publishing) the first four key publications relating to the conceptual framework and a critical review of the existing literature (including the limits thereof and our alternative take) and have started working on the next set of mostly empirical papers in their respective areas or investigation. This set of papers will be presented at the first 2-day conference that we are organizing in December 2020.
REVEAL aims to change our understanding of the resilience and adaptability of private collective action despite external shocks and crises. It innovates from previous research by comparing and drawing parallels between different areas of standard-setting. These are not only assessed from a multi-disciplinary perspective, but also in their interaction with national, international, and transnational rules. Furthermore, while previous empirical research is limited to a narrow aspect of private regulation (i.e. the adoption of a specific standard), the REVEAL project embraces a more ample perspective studying emergence and evolution of private bodies over a longer period of time, and taking into account a broad set of economic and legal factors. As we make progress with the collection of empirical data through the interviews we conduct, we expect to offer a new regulatory theory of private collective action that offers a fresh, comprehensive and more realistic framework for analyzing the resilience of private regulators in the areas of finance and product safety.