1st Edition

Meta-Regulation in Practice Beyond Normative Views of Morality and Rationality

By F.C. Simon Copyright 2017
    256 Pages 6 B/W Illustrations
    by Routledge

    256 Pages 6 B/W Illustrations
    by Routledge

    Meta-regulation presents itself as a progressive policy approach that can manage complexity and conflicting objectives better than traditional command and control regulation. It does this by ‘harnessing’ markets and enlisting a broad range of stakeholders to reach a more inclusive view of the public interest that a self-regulating business can then respond to.

    Based on a seventeen year study of the Australian energy industry, and via the lens of Niklas Luhmann’s systems theory, Meta-Regulation in Practice argues that normative meta-regulatory theory relies on questionable assumptions of stakeholder morality and rationality. Meta-regulation in practice appears to be most challenged in a complex and contested environment; the very environment it is supposed to serve best.

    Contending that scholarship must prioritise an understanding of communicative possibilities in practice, this book will be of interest to undergraduate and postgraduate students, as well as postdoctoral researchers interested in subjects such as business regulation, systems theory and corporate social responsibility.

    Please visit meta-regulation.com for more insightful information on meta-regulation and Meta-Regulation in Practice.


    List of Abbreviations


    The machinery of meta-regulation

    Luhmann’s systems theory

    The Australian retail energy industry

    The structure of this book



    Consensus on values and the public interest

    The government is a silent enabler of the public interest

    The regulator’s values and actions represent the public interest

    Third party advocates and activists represent the public interest

    The private corporate interest can be aligned with the public interest

    Organisational rationality and capacity for learning




    The early policy vacuum in Victoria

    The industry and regulatory response to the policy environment

    The development of the Retail Code

    Retailer participation in the consultation

    Consumer advocate participation in the consultation

    How the ESC managed the issues

    Government intervention in pricing

    The political need to regulate energy prices in 2001

    The paradox of regulating prices low in a competitive market




    Overview of the markets: 2003–2015

    Compliance outcomes

    Performance outcomes

    The industry experience

    Protecting vulnerable consumers

    The definitional problem

    Stakeholder moral perspectives

    Disconnection case studies and consultations

    Contingency and unpredictable outcomes

    The rise and fall (and rise) of the National Energy Customer Framework

    The Victorian smart meter debacle

    When the Queensland Premier went to war with Origin Energy

    Inside the industry

    The basis for action: commercial drivers and the bottom line

    Managing through risk frameworks

    The instability of the corporate environment




    The genesis of the Victorian hardship provisions

    Legislative changes in 2004

    The Utility Debt Spiral Project: a collaborative model

    The Victorian Hardship Inquiry

    Drawing out the conflict on roles in energy bill management

    Consumer advocate positions

    Retailer positions

    Policy responses and the appearance of action

    Conflicts between the ESC and EWOV and wrongful disconnection referrals *

    The implications for compliance and performance

    Reactions to formal and informal performance reporting

    Consumer advocate naming and shaming

    Regulatory focus on performance

    The creation of retailer hardship programmes

    A surprising turn of events: the ESC proposal to abolish hardship programmes




    Economic assessments of competition

    Complicating factors in identifying effective competition

    Behavioural economics and ‘rational’ consumer choice

    The door-to-door sales channel driving churn rates

    The quality of competition and unresolved issues about policy expectations

    Political views of market effectiveness

    How Victoria deregulated prices

    Drivers for deregulation in the other states

    When the market became the safety net

    The AEMC’s consumer engagement blueprint

    Co-regulation, self-regulation and external enforcement of door-to-door sales

    Self-regulation under Energy Assured Limited

    Regulatory enforcement and further retailer self-regulation




    The political need to ‘do something’

    Risk perceptions were amplified under meta-regulation

    Political behaviour from the regulators was amplified under meta-regulation

    Harnessing the market?

    The reputation mechanism was highly unreliable

    Retailer learning was heavily constrained

    The role of the law

    Assessing the effectiveness of meta-regulation in the Australian energy markets

    Meta-regulatory outcomes

    A comparison with command and control regulation

    A different perspective on meta-regulation

    Some final thoughts



    Dr F. C. Simon is a regulatory policy practitioner, having worked in both regulatory and regulated organisations.

    [T]his is a sparkling book with brilliant case study material. It should enliven debate about what has perhaps become a slightly tired orthodoxy about regulatory policy and may well be destined to become a classic.

    Christopher Hood, Australian Journal of Public Administration

    Based on extensive analysis and deep insider knowledge of the Australian retail energy sector, F.C. Simon builds a powerful and fascinating critique of meta-regulation theory and its practical manifestation. Simon shows how complexity and contested views of compliance and market competition, challenge key tenets of meta-regulatory thinking, not least capacities for learning and for responsiveness to reputational risk. Meta-Regulation in Practice will be of considerable interest to scholars, policy makers and managers in the energy sector and beyond.

    Michael Power, London School of Economics and Political Science, UK

    Don’t be put off by the title – you don’t need to be a sociologist to enjoy Fiona Simon’s highly engaging, insightful and perceptive account of retail energy regulation in Australia. Meta-Regulation in Practice explores alternative views of what regulation should achieve, and shows how policy evolved in response to the various different pressures. It calls out for an equally stimulating and informed account of UK and other experience, and for the (re)opening of diplomatic relationships between economic and sociological concepts of regulation. This is a superb book and a welcome addition to the literature.

    Stephen Littlechild, Emeritus Professor, University of Birmingham, and Fellow, Judge Business School, University of Cambridge UK; former UK electricity regulator (1989-98)

    This is a very perceptive book, offering an original perspective on regulation, illustrated with an information-packed analysis of a major regulated market – the retail energy market in Australia.

    Martin Cave, Visiting Professor, Imperial College Business School, UK

    Meta-Regulation in Practice is an excellent case study on the attempt to morally and politically steer the Australian retail energy sector. F.C. Simon shows how such regulation efforts may only result in a growing hiatus between the public self-description of an industry and its actual functioning. Its intricate systems-theoretical reflections connect this book with cutting-edge contemporary social theory far beyond its immediate area.

    Hans-Georg Moeller, Professor and Subject Convenor, Philosophy and Religious Studies Program, University of Macau, China

    F.C. Simon provides a unique and original perspective on the practice of regulatory organizations and in doing so rejects the enthusiastic claims and uncritical accounts of many academic commentators. She takes as her starting point the contradictions and self-deceptions under which these organizations operate. In the footsteps of Niklas Luhmann, whose systems theory inspired her analysis, she skilfully exposes their taken-for-granted world as an illusion. At the same time she recognizes fully the complexity of the task facing regulation in its attempt to reconcile the demands of politics, law and economics and produce a coherent account of its activities. This is a ground-breaking book which deserves to be widely read.

    Michael King, Professor Emeritus, University of Reading, UK

    Your reviewer can do no better than advise the readers of this journal interested in energy regulation or regulation generally to read Simon’s case study. It is amongst the most incisive, sobering and salutary accounts of the actual results of intervention known to your reviewer, who has been reading these things for more than thirty years. Simon’s contribution to the problematisation of the public interest in regulation is important.

    David Campbell, Journal of Law and Society

    Meta-Regulation in Practice is a very good book which unusually coherently combines theoretical reflection with a real-world story. It will be of interest to students of regulatory theory and those who are specifically interested in energy regulation. 

    Cosmo Graham, LSE Review of Books

    [This book] is essential reading for those of us who have in the past emphasized the need for regulation of any kind to be open and responsive; the author does us a great service in encouraging us to see the limits of communication and discourse.

    Tony Prosser, Governance

    This book is a meticulously researched analysis of the issues that flow from reliance on co-regulation or self-regulation. It particularly identifies the problems created when the expectations of policy makers do not align with the capacity or strategy of the regulated. In doing so, it also highlights the potentially uncomfortable alignment (or otherwise) between policy makers and regulators.

    Rob Nicholls, Australian Business Law Review

    It’s unlikely that anyone other than Simon could have written this book...The combination of Simon’s theoretical grounding and deep professional expertise makes this book a rigorous and incisive critique of meta-regulation, while her crisp style and personal insights make it highly readable, including to a non-academic readership.

    Kieran Donoghue, Energy Research and Social Science

    This is a fascinating book on a topic of increasing debate and relevance. 

    Patricia Leighton, Journal of Management and Organization

    This work is timely and fills an important gap in the scholarly literature.

    Brooke Lahneman, Journal of Management and Governance

    Simon’s important work has much to tell us about the variety of ways that regulatory instruments can be integrated into a welfare regime under conditions of marketization and how this reshapes the nature and processes of legal and political accountability.

    Sangeetha Chandrashekeran, Law and Society Review

    We might expect a text on the regulation of energy retail to be a bit dry, but there is high drama, with characters of varied disposition and clashing ideology; there is good and evil and a confusion of these befitting a good story — even one that tells the truth.

    Jesse Cunningham, Sydney Law Review

    Meta-Regulation in Practice can be read as using a theory of how the world is – i.e., systems theory – to critique a theory of how the world should be, i.e., meta-regulatory theory. In that, it is successful. Readers will find lots to engage with beyond these particular theories, though, as the book taps into broader conceptual challenges across the study of politics, policy, and related fields. How can we measure policy effectiveness? How can we account for contingency in policy-making decisions? What does it mean for actors to act ‘rationally’? How can we conceptualize the public interest? Simon addresses such questions directly, and challenges the assumptions through which they are sometimes resolved.  

    Gabriel Menard, Canadian Journal of Sociology

    Simon is to be commended for the methodological approach used in this research. Delineating unstated and untested assumptions in normative meta- regulatory theory and using a detailed case study to test these assumptions is exemplary practice.

    Stephen M. Mitchell, Administrative Science Quarterly

    Meta-Regulation in Practice serves as a cautionary tale about the difficulties involved in successfully implementing meta-regulatory reforms in contested and complex policy environments. It deserves to be widely read by students of regulatory policy and politics.

    Neal D. Woods, Journal of Public Administration Research and Theory