Business Adaptation to Regulation: What Do We Know and What Do We Need to Know?

There is, predictably, a gap between the normative model and empirical pictures of regulation drawn from many societies. We may get an approximation of the goals of much regulation, but often regulatory policy is not carried out exactly as legislated. Agencies pursue enforcement strategies in light of their priorities and resources. They engage in soft law enforcement and bargain with the targets of regulation. Regulated businesses have many tactics available to blunt or evade regulation. We can fashion plausible normative arguments both for and against these common empirical pictures. To a great extent, however, these normative positions rest on unexamined empirical assumptions. Future research might profitably focus on the roles played by those individuals who act for business associations and cope with regulation. Attention should be paid particularly to the roles played by business lawyers in such coping. James Gould Cozzens' novel, Guard of Honor, suggests how lawyers comply narrowly, evade, cover up and otherwise divert the impact of regulation, all in the service of what they see as the greater good. Cozzens' story suggests important empirical and normative questions for future consideration.