CECAN Fellow: Henry Leveson-Gower

CECAN Fellow Henry Leveson Gower

CECAN Fellowship: Regulatory Frameworks to Manage Complex Systems across the Nexus: Evaluating benefits of behavioural and institutional regulatory interventions

Fellow: Henry Leveson-Gower, DEFRA
Mentors: Corinna Elsenbroich                  

There is increasing understanding that regulation has to go beyond approaches based only on ‘getting the incentives right’ to drawing more systematically on insights from behavioural and institutional economics. Hence for instance Ofwat’s 5 year strategy is called ‘Trust in Water’ and depends on water companies being responsible for achieving broad outcomes such as levels of service and energy efficiency as well as collaborating with other key sectors such as agriculture.

However there has been no work to systematically evaluate the benefits of regulatory strategies underpinned by these methods as compared to ones developed based on a market failure paradigm. Hence regulators are less able to design and defend evidence based regulatory strategies (e.g. stakeholder ‘challenge groups’, company governance reform etc) which are often not understood by observers based in a neo-classical market failure paradigm.

This project will evaluate the cost effectiveness of strategies such, as institutional innovations like customer challenge groups, using case studies, behavioral and institutional economic methods and agent based models. It will look at the benefits in terms of integrating issues relating to water, energy and food particularly in the context of climate change.

CECAN - funded and supported by the following organisations