Legitimacy and the Competition for Regulatory Share

Legitimacy is not just a normative challenge for regulators; it is also a functional one. Without legitimacy, regulators will not be able to motivate others to accept and support their regulatory strategies. Regulators, therefore, have to attempt to create and manage their own legitimacy. Legitimacy management is a key issue in particular for non-state regulators that lack a legally given monopoly or mandate to regulate, for they have to persuade others to comply with their norms. Moreover, they may have to compete for ‘regulatory share’; in other words, they may have to compete against other regulators in an attempt to ensure that others ‘buy’ their regulations rather than those of their competitor. This paper argues that legitimacy is a key element in this competition for regulatory share. The paper distinguishes between exportbased and import-based strategies of regulatory competition, and identifies different strategies for managing legitimacy in an attempt to gain regulatory share. It goes on to suggest that in order to understand the role of legitimacy in this dynamic, we need a particular conception of legitimacy. Legitimacy should be conceptualized not as an attribute or a resource, but as an endowment. Regulators can try to gain legitimacy and can do so in the context of a competition for regulatory share, but whether they get it and from whom depend on the assessments of their various legitimacy communities. Despite the organisation’s best efforts, legitimacy may not be forthcoming at all from those legitimacy communities from whom it is sought, thus limiting the regulator’s ability to expand its regulatory share.