Research Goals and General Findings

This study seeks to provide the basis for a better understanding of the relative merits of public and private standards-setting in the area of safety regulation. Given limited knowledge of private-sector efforts, however, the first goal is to determine how private organizations actually work. What Wilson said about studying public regulation is equally true of private: "There is a need to go beyond an account of the newsworthy scandal to an exposition of how [agencies] ordinarily operate."^[53] This inquiry is well suited to the case-study method. Two lines of analysis are suggested in the literature. The first concerns administrative law and procedures. Little is known about how private organizations actually achieve "consensus," respond to negative comments, or handle appeals. Proponents of private standards claim these procedures work well; critics charge they paper over fundamental flaws in private decisionmaking. An analysis of specific cases should shed some light on this dispute. The other obvious avenue for inquiry is political. Critics argue that the interests represented in private standards-setting are heavily biased in favor of business. This hypothesis is plausible, but, as indicated above, there are also reasons to doubt it. The case-study approach allows a detailed examination of the nature and balance of participating interests in a specific context.

The ultimate aim of this study is to evaluate the relative performance of public and private standards-setting. How well does each sector regulate safety? This study consists of four pairs of case studies. In each instance, both the public and private sectors have adopted safety standards in the same general area, and the study concentrates on organizational differences between the two sectors. The form of inquiry is decidedly institutional. Its main contribution is in identifying the comparative institutional advantages of the two systems.

Looking ahead to the analysis and conclusions, these case studies suggest that the difference between public and private standards-setting is not just a matter of degree, but one of kind. The analysis reveals important differences in how public and private standards-setters (1) estimate costs and benefits, (2) resolve philosophical questions about the appropriate scope of safety regulation, and (3) act over time and in the context of a larger regulatory program. Is the public or the private approach generally better? No simple answer to the question is possible, because the two sectors do not only favor different outcomes; they have different ways of looking at problems as well.

The analysis of outcomes partially confirms the conventional view that public standards are stricter than private ones and more prone to overzealousness. But there are contrary indications as well, suggesting that the private sector is more diverse than often presumed. Although the range of the interests represented on most private committees is limited by the absence of bona fide consumer representatives—an interest not necessarily better represented in public proceedings—the cases identify several important, but unappreciated, advocates of safety in the private sector. On occasion these forces combine to exhibit a surprising tendency toward strictness. Private standards should not, therefore, be rejected on the argument that they are intrinsically underprotective.

The differences between public and private approaches are not just in what should be done about a problem, but in whether anything should be done. Some "solutions" that are never seriously considered by one sector are routinely favored by the other. For example, public agencies are more willing than private ones to select early compliance deadlines, require use of unproven technologies, and regulate in a manner that interferes with traditional notions of managerial discretion. But these differences do not all cut along ideological lines. In surprising ways the private philosophy also encompasses public safety goals. Two institutional features appear to shape these regulatory philosophies: professional norms and the regulatory environment.

The significance of the former was suggested by Wilson, whose study of public regulation notes that professionals in different fields "often have distinctive ways of thinking about problems." This is particularly significant in comparing public and private standards-setters, because engineers dominate most private organizations, while lawyers play a leading role in the public sector.

The law is also a powerful external influence that constrains decisionmaking in the two sectors. Only private standards-setters are subject to the antitrust laws, and they frequently cite these laws as a reason for taking various actions. Liability law is seldom cited as an official reason for doing anything in the private sector, but the case studies suggest it is a more significant factor than antitrust law in explaining regulatory behavior. Liability concerns help explain why certain provisions are vague while others are relegated to an appendix. More generally, liability law seems to explain the reluctance of the private sector to address issues of consumer misuse or embrace certain new technologies. Public agencies, on the other hand, are subject to more frequent and intrusive judicial review of their regulatory decisions. These differences in regulatory environment help explain other differences in regulatory philosophy.

At least as important as these static differences is how the organizations change over time. Aaron Wildavsky has stressed the importance of "resilient" approaches to safety regulation.^[54] Others have emphasized the advantages of "flexibility" and "responsiveness."^[55] These concepts place standards-setting in an evolutionary context. What matters is not so much how individual cases are resolved, but how results change over time. Again, the case studies suggest important difference between the public and private sectors. Private standards-setting is prospective and ongoing, while public efforts tend to be corrective and singular. Private standards-setters tend to intervene relatively early in the life cycle of an issue, adjusting the subsequent standard over time. Public standards-setters, by contrast, are likely to get involved later in time, often after a major disaster, and to adopt a "one-shot" standard that is not subsequently revised.

Chapter 12 offers several suggestions on how to take advantage of these differences. One approach is for the public sector to stress "public" values. In other words, it should emphasize strategies shunned by the private sector. Second, government should identify niches where public standards are likely to complement private ones. A particularly promising strategy is filling "holes" in private standards. Finally, the importance of alternative policy instruments must not be overlooked. Standards-setting in both sectors is affected by a variety of "external" factors that are subject to influence by government action. Several of these alternative policy instruments hold the promise of improving standards-setting in ways that could never be mandated directly. For ex-

ample, altering product liability law and improving the education of engineers could both lead to significant improvements in standards-setting. Recognizing these subtle influences and pursuing strategies that build on the complex interaction of public and private safety standards is the key to an intelligent and productive standards policy.