Regulation American Versus European Style

Professors Shils and Zucker, in a study funded by the Wharton Entrepreneurial Center of the University of Pennsylvania, devoted two years doing a study of the varying regulatory environments, under which five major multinational corporations had to operate. Executives in these corporations were interviewed in the United States, England, and Germany, and in several other locations on the European continent. It was discovered that the European attitude toward corporate regulation provided for a great deal of responsiveness among members of the industrial, governmental, and academic communities. While regulation of health, safety, and environment is deemed to be as important in Europe as it is in the United States, nevertheless, a cooperative attitude among scientists on both sides of the fence assures society that new product development and technological innovation can continue without the kinds of regulatory harassment which create unemployment and long delays in bringing products to the marketplace. The authors discovered that a great deal of the healthy regulatory environments found in Europe, as compared with that in the United States, is due, in part, to the European civil service, where scientists are employed in relatively greater numbers than lawyers. In the United States, the number of lawyers in regulatory agencies creates a litigious response on the part of companies being regulated. The overemphasis on the legal approach in the United States has had a negative impact on both large corporations and small business.