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Regulatory Instruments

Regulatory Instruments in the Real World

What is the research programme about?

The research programme “Regulatory Instruments in the Real World” investigates the steering effect of different legal instruments (“regulatory instruments”). Regulatory instruments are all legal norms with which the legislator attempts to steer the behaviour of addressees in the public interest, such as prohibitions, commands, fines, incentive taxes, occupational bans, and many more. The same regulatory goal can be pursued with a variety of different regulatory instruments. The aim of the research programme is to empirically compare the regulatory instruments on the basis of the categories “effectiveness”, “side effects” and “costs”.

The results of this research not only expand our basic knowledge of how the law works, but also have important implications for the practice of law-making, the authorities and the courts.

What is new about the research programme?

Traditional legal science is concerned with the interpretation and systematisation of the law, but does not examine its steering effects.

What effects the applicable rules have, on the other hand, has so far been analysed primarily by economics, and to some extent also by the sociology of law and social psychology. There, however, the research questions are always driven by the respective subject. For example, economics asks about the “efficiency” of regulations. These effects are closely related to the regulatory goal, while the different regulatory instruments are rarely considered.

“Regulatory Instruments in the Real World”, asks about the effectiveness of the instruments, i.e. their suitability for achieving the regulatory goal, without evaluating this according to efficiency or fairness criteria. The aim is to gather basic knowledge on the steering effect of different legal regulations. This includes such central questions as:

  • Which regulatory instrument is best suited to achieve a (politically determined) regulatory goal?
  • What are the side effects of a particular regulatory instrument?
  • How can the law be applied in such a way that the regulatory goal is promoted as much as possible and side effects are avoided as much as possible?

Are there already foundations for the new research?

There are a number of important preparatory studies. In his research, Professor Hellgardt has himself been dealing with the regulatory effect of law for a long time, but so far only on a theoretical basis. In his post-doctoral thesis, he developed a comprehensive system of “regulatory instruments”, “regulatory goals”, “regulatory strategies” and “regulatory concepts” and classified different regulatory instruments with regard to the criteria of “target accuracy”, “side effects” and “costs”. Ultimately, however, these are questions that can only be answered empirically. This is why the research programme “Regulatory Instruments in the Real World” was launched.

Which methods are to be used?

The first step is to obtain statistical data (time series, cross-sectional data or panel data), in particular from statistical offices, which can be used to understand the effects of legal regulations by means of statistical methods. This is not only about the impact of legal instruments, but also about direct and indirect costs (e.g. additional judges’ posts through the introduction of collective proceedings) or desirable and undesirable side effects. The goal is to identify so-called “natural experiment” in which an independent variable has changed due to exogenous circumstances and then obtain the corresponding data to examine the effects of the change on a dependent variable. However, such natural experiments are difficult to find and often it will not be possible to obtain the relevant data.

Therefore, an essential element of the research programme is to create data sets through experiments, which can then be statistically analysed. The gold-standard in this respect is the field experiment, in which variables are manipulated in a real-life environment for scientific experimental purposes. However, the implementation of such field experiments depends on the willingness of public agencies or companies to cooperate. In order to obtain a sufficient data basis, classical experiments will also be carried out, in addition to computer experiments, especially survey experiments. These are well-known methods from the social sciences that can be used to collect data tailored precisely to the research questions.

In a later stage of the research programme, virtual reality experiments will also be conducted. These are particularly suitable for investigating the research questions at hand because people react intuitively in such environments and are not able to weigh things up.

Which reference areas will be studied?

The research programme strives to investigate the effect of legal instruments as such, i.e. independently of the concrete regulatory goal. Nevertheless, the analyses will initially concentrate on two reference areas. Reactions to legal norms can only be properly analysed if one is sufficiently familiar with the area of law in question and the area of life regulated by it. Otherwise, there is a particular danger of overlooking relevant variables in the statistical model, which would distort the results.
The first reference area is financial markets and corporations. This area is characterised by a high level of legislative activity and many decisions by authorities and courts. In addition, there is already comprehensive empirical-economic research on financial market issues.
The second reference area is the so-called “Verkehrswende”, i.e. the attempt to significantly reduce CO2 emissions from road traffic. In this area, many different regulatory instruments are used (e.g. subsidies for e-mobility, incentive taxes on fuels, driving bans for certain types of vehicles, claims for damages under civil law against manufacturers who violate statutory emission standards), a large amount of private data (e.g. vehicle movements recorded by navigation system operators) is available in addition to official data, and experiments can be designed that are linked to people’s everyday experiences and whose results therefore promise a high degree of external validity.

When can the first research results be expected?

The research programme is designed for a longer period of 10 to 15 years. For the first seven years, the programme will be funded by the Volkswagen Foundation with 1 million euros. The programme starts in autumn 2021, so the first research results can only be expected after a few years.


  1. HOMEPAGE UR

Chair of Private Law, Corporate Law and Jurisprudence