Legitimacy and private-sector representation of interests.

The fact that regulation takes place is a fact of life in a "politically controlled market economy" (Udo Di Fabio). The question is how.

In the internal market of the European Union, regulation has long since become a critical factor of strategic relevance for companies. However, public pressure for transparency and increasing complexity of content have completely changed the relationship between politics and business.

For citizens, politics is more than just rules and laws. But not for companies. For example, citizens may think that consumer and environmental protection are nonsense, but not companies. The private sector simply has no legitimacy to become involved in the sense and nonsense of societal goals. The conflicts of interest are simply too great. How should a car manufacturer credibly assess whether cars as such should play a role in future mobility? What could a spirits manufacturer object to the health policy will to drink less? No one can express a differentiated opinion on questions concerning his own existence.

WHAT so-called politics does in the interest of the public, i.e. its intentions and, so to speak, intrinsic goals, concerns only voters and citizens. Companies have no say here, but they do have a say in HOW. After all, no one is better placed than the people affected, i.e. the private sector players, to judge the impact of policies designed in the name of public interests. Every regulation that affects a company can be described in terms of its systematic effects on supply and demand, i.e. on business models and markets. Companies know this better than anyone else. This is also the good reason why they are consulted and actively involved in legislative processes.

Whoever wants to talk about whether regulation actually achieves the political goals associated with it must be able to place his or her particular interest in a context that is relevant to regulatory policy. Criticism of the women's quota, for example, cannot call into question the goal of emancipation, but can only address the question of whether such a quota actually leads to an increasing supply of highly qualified female workers. Anyone who even wants to speak out against such a quota must prove that it does not achieve this goal, or at least that another, perhaps milder measure is more appropriate. Anyone arguing in this way must be able to model the effectiveness of regulation quantitatively.

Modeling the effects of regulation is not a new idea. The so-called „Regulatory Impact Assessments“ which originated in the USA, have long been standard in the European Union. However, the strategic potential of this instrument for positioning companies is far from being fully exploited. Often the analysis is limited to direct and indirect effects regarding productivity, value creation and employment and thus to exclusively company-specific aspects. But the impact on companies has lost socio-political relevance, especially in the prospering economic area of the Federal Republic of Germany. The message that regulation in a particular industry threatens jobs now only penetrates the public eye in particularly serious cases.

This means for the strategists in the corporate headquarters: Figures alone are not enough, they have to be the right ones, i.e. the publicly and therefore also politically relevant figures.


Modeling the effects of regulation is not a new idea.