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BOX 4-1

Examples of the Use of Alternative Governance Approaches

Nuclear Power Safety

Before the Nuclear Regulatory Commission (NRC) focused attention on issues essential to protecting public health, the Atomic Energy Commission was often criticized for its dual role in protecting public health while also avoiding imposing requirements that would inhibit the growth of the industry. With respect to nuclear reactors, the NRC took the traditional approach of creating standards and requirements to protect public health, eventually giving operators the sense that accidents would be prevented as long as compliance with these standards and requirements was verified by an inspector. This traditional prescriptive approach, however, was criticized as being unable to promote uniform levels of safety. The NRC then moved toward a risk-based system, whereby accountability is placed on the operator’s side. However, the Government Accountability Office has noted major challenges to the success of this system, including the need to encourage a shift to a culture of safety, significant human capital needs and costs, and methodological challenges (GAO, 2006).

British Railway System

Potential limitations of implementing novel governance approaches in the health and safety arena may be evident in the experience of the British railway system. Hutter (2001) suggests that such a move may have led to breaches in public safety. Often, a self-regulatory regime is seen as a superior governance model in that it relies not only on government accountability, but also on the capacity of corporations to regulate themselves and develop systems tailored to their specific operations. Innovation is encouraged, and companies are more likely to follow their own rules than rules imposed on them. Hutter argues that in the case of the railway industry in Britain, enforced self-regulation was not appropriately monitored and ended up being itself the source of risk. In fact, the self-regulation was more procedural than substantive; although rules were in place, they were not well understood. Lack of communication was a major explanation for the failure of the system in a company that was fragmented functionally and geographically.

both failure and success. Examples are presented in Box 4-1. These examples illustrate that developing criteria for selecting a governance approach, making the selection, and evaluating performance outcomes are essential activities for regulatory agencies. These two examples are but a small sampling of the many models of regulation and oversight that exist, and the

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