1. Neo-Liberalism, Regulatory Capitalism and the Future of Consumer Policy Iain Ramsay Osgoode Hall Law School York University Toronto

2. The project Interest in consumer law as part of contemporary regulation of consumer markets Changes during past two decades in prevailing ideas about institutional capacities and role of state and market Focus on UK

3. Three strands Neo-liberalism The new regulatory capitalism Decentred regulation

4. Neo-liberalism Dominance of finance capital “Freedom of choice” Individual responsibility Economic discourse of market failure and Regulatory Impact Analysis become dominant policy mode (see e.g. OECD principles) Competition dominant at all levels (individuals,cities,states,regions)

5. Regulatory capitalism (Levi- Faur) The “new regulatory state” Increased delegation through varieties of “self- regulation” Greater internal regulation to prevent “capture” The use of new instruments requiring internal monitoring by corporations Increased international regulation through technical standards Diffusion of regulatory ideas worldwide through regulatory networks International regulatory competition through benchmarking

6. Decentered regulation State increasingly “steering not rowing” Heightened emphasis on varieties of “self-regulation” Greater role for consumers as a regulatory subject

7. Two tendencies in regulation Harnessing of actors in civil society – downwards drift from state Upward drift as state is acted upon by international and regional influences and actors may appeal to these institutions

8. The consumer as an important agent of policy DTI 2005 Consumers will drive national competitiveness Consumers will reflect on the consequences of their purchasing decisions –environmental and social effects Responsible consumer “Purchaser” and “citizen consumer”

9. Paradox Increasing interest in consumer as agent of policy at same time as much scientific evidence suggests irrationalities in consumer behaviour e.g. behavioural economics Undercuts for example competition policy [OECD now studying demand side of economy]

10. International and regional dimensions The OECD as a forum for developing “epistemic communities” in competition and consumer policy. Role of guidelines The role of policy networks and ICN and ICPEN International benchmarking by regulators Effects on convergence trends in policy implementation EU as model and influence on re-regulation and standard setting. Continuing issue of consumer influence and participation. See CI Decision Making in the Global Market The need for a political economy of international and regional consumer policy. May need to develop through specific areas (see e.g. Braithwaite and Drahos).

11. Questions Distributional effects of this new architecture of regulation? Braithwaite and Drahos “ business influence through states or international standardization bodies is often disproportionate” Role of equity, fairness and basic rights within consumer policy e.g. utilities regulation and services of general interest

12. UK consumer policy Transformations in codes of practice Advertising Standards Authority Oft, unfair terms and changing market norms Credit card chargebacks The financial ombudsman service The US Community Reinvestment Act

13. Specific regulatory areas Codes of practice: greater transparency, formality, participation by stakeholder groups, mechanisms of accountability (Levi –Faur) Rationale of regulating for competitiveness; Michael Porter’s arguments

14. OFT and unfair terms Dominance of negotiation in achieving policy objectives: negotiations may be industry-wide Greater monitoring through National Audit Office: EU monitoring OFT cajoling industries to achieve higher quality terms Possibility of regulatory competition and private enforcement

15. Credit card chargeback liability Harnessing gatekeepers Practices of international card networks compared with legal regime (e.g. OFT v Lloyds) Different sites of regulation: OECD, EU, national regulation Development of “best practices” as a global model

16. Access to justice and Financial Ombudsman service Potential to achieve objectives of compensation, dispute settlement, behaviour modification, and norm development FOS itself monitored by independent assessor

17. Consumer credit and responsible lending Consumer credit increasingly performs a public function in many economies Concerns re fairness and financial exclusion Role of responsible lending (e.g. through changing internal corporate practices) Community Reinvestment Act as one model that attempts to harness legal, reputational and social pressures through community activists

18. Discussion UK developments reflect regulatory capitalism literature of greater formality, mechanisms of accountability, international regulatory competition. Decentered? State plays an important role e.g. increased funding for OFT: FOS now a statutory body International and regional influences e.g. unfair terms But how much convergence of regulatory approaches in consumer policy compared with competition policy? Path-dependency in consumer regulation?

19. Further points Distributional consequences of new regulation? Misleading reductionism to view consumer policy as simply facilitating “neo-liberal” consumerism? Consumer law as regulation: significance for academic study: the role of socio-legal and empirical studies