Beyond Fragmented Government: Governance in the Public Sector

Corporatism, once used to mediate conflict in labour relations and primary production, has emerged in the policy and regulatory networks around the Toronto Stock Exchange. It is a lop-sided corporatism which excludes representative participation by consumers. Corporatism as an explanatory theory once competed with models of pluralism. It is now obscured by new theories in regulatory studies. Corporatism repositions the financial service industries into the context of other competitive and adversarial economic activities regulated by the state. The broad commercially orientated and relationship-decision making of private order stock exchange regulation has been lifted into state and public order regulation through a combination of industry associations and state agencies. Corporatism emphasises in this arrangement the blurring of private and public policy and decision-making and conventional separations of power. It is marked by (1) participants who are willing and able to negotiate agreements and to pressure and persuade others to observe the terms; (2) rewards, advantages or incentives for participants; (3) recurring contexts and situations which brings the participants together, and, (4) distinctive political and legal cultures of the regulatory institutions needed to accommodate it. It draws attention to the broad standards and discretionary decision making which advantage individual major actors and disadvantages minor ones. It emphasises the decision-making by participants who take into account the economic importance of particular transactions and individual actors. The interests of minor actors including retail investors will not be protected, particularly in the absence of a strong and autonomous state regulator. There will be ongoing concern because of the poor fit with public order regulatory principles relating to impartial decision-making. Reactions to further scandal may require industry-based groups to implement policies against their interests. Centre for International Corporate Governance Research. http://www.businessandlaw.vu.edu.au/cicgr/default.asp 4 Casey, John. & Dalton, Bronwen. The Best Of Times, The Worst Of Times: Community Sector Advocacy In The Age Of ‘Compacts’