The Global Retreat of the Regulatory State? The Populist Challenge and the Future of Regulatory Governance

The Global Retreat of the Regulatory State? The Populist Challenge and the Future of Regulatory Governance

Abstract

The regulatory state is under severe stress. The rise of populism, at times with authoritarian tendencies, is challenging the very fundamentals of the regulatory state and regulatory governance. Populist leaders do not simply politicize and undermine regulatory governance, but they tend to transform the regulatory state. Despite the rich and ever-expanding debate about the impact of the populist ascent and democratic backsliding on public administration, bureaucracy, and public policy, research on the effect of populist rule on regulatory governance and the regulatory state is still scant. In this paper, we show how to address this gap and present two major contributions to guide future research agenda. First, we revisit the populist ascent and map out the current state of our limited knowledge. Second, we discuss five avenues scholars could follow in order to develop empirical and/or conceptual insights in order to better understand the transforming regulatory state: populist strategies for controlling regulatory agencies, the politics of regulatory design, market responses to regulatory instability, the role of transgovernmental networks and international constraints, and regulatory agency responses and adaptation to the populist ascent.

Introduction

Regulatory state has long been regarded as the dominant paradigm in the governance of modern economies. Contrary to expectations that neoliberal globalization would lead to large-scale deregulation and a retreating state, the rise of independent regulatory agencies instead refined state intervention. Rather than exercising direct control over markets, the state assumed a regulatory role, characterized by the delegation of authority to independent agencies, the proliferation of new regulatory mechanisms, and the institutionalization of technocratic policymaking. This model was reinforced by international economic and political integration, the emergence of transnational policy networks, and the need for credible commitments in market regulation. Regulation became a key pillar of economic governance, with independent regulatory agencies playing a crucial role in ensuring market transparency, competition, and economic stability. Over time, regulatory governance expanded beyond economic oversight into areas such as environmental protection, consumer safety, and digital policy, further solidifying its role in modern statecraft. In this process, regulatory state was increasingly framed as a global norm, essential for maintaining economic order in a rapidly evolving world.

At the core of this transformation was the belief that regulatory independence was necessary to insulate policymaking from short-term political pressures and signal credibility to markets. Governments worldwide embraced this model, adopting institutional designs that prioritized expert-driven decision-making over electoral responsiveness. Yet, while the regulatory state was once perceived as a self-reinforcing and irreversible institution, its raison d'être and resilience is now under question. The central challenge comes from the ascendancy of populist movements, which have increasingly sought to re-politicize regulatory governance, depicting independent agencies as unaccountable bureaucratic elites that obstruct the "will of the people":

"Out of conviction or as a strategy to win over public opinion, it is nowadays common to see populist political leaders framing experts as undemocratic actors driven by pernicious particular interests. At the same time, the rise of populism has enhanced the image of technical bureaucratic bodies as limits to populist will."

A stark recent example is the Trump administration's efforts to expand presidential authority over independent regulatory agencies through executive orders mandating White House review of agencies' decisions and asserting greater control over agency leadership. Similar patterns have emerged elsewhere: in Hungary, Viktor Orbán has subordinated regulatory bodies to direct government oversight; in Poland, the Law and Justice party has weakened institutional checks on executive power, including regulatory agencies; in Brazil, Jair Bolsonaro's administration undermined environmental and financial regulators to consolidate executive authority; in Turkey Tayyip Erdogan's executive aggrandizement has subordinated or sidelined independent regulatory agencies. Such assault on independent regulatory agencies, and more broadly the regulatory state, once thought to be a stable and self-reinforcing institution, can survive the rise of populism.

At the same time, the study of the effects of populism and democratic backsliding on the regulatory state is still an under-researched area. Despite growing attention to populism and democratic backsliding, research on regulatory agencies remains significantly underdeveloped. Existing studies largely focus on populism's impact on the policy process, civil service, core executive, and bureaucratic autonomy. In these studies, attention is given to how populist leaders pressure central government departments, politicize ministries, and erode civil service neutrality, from top appointees down to the level of frontline workers. However, the fate of independent regulatory agencies under populist rule remains largely unexplored, despite their critical role in economic governance, market stability, and transnational regulatory coordination. Unlike ministerial bureaucracies, which rely on hierarchical relationships with elected officials, independent regulatory agencies function at arm's length from government and depend heavily on credible commitments and reputational legitimacy to maintain autonomy.

Therefore, this paper addresses specifically the impact of globally rising populist movements on the design, functioning and theoretical underpinnings of the regulatory state. Its purpose is to unfold a research agenda for the field of regulatory governance that is now in a time of democratic erosion under increasing pressures to review its core attributes. We argue that the regulatory state was never fully embedded beyond elite policymaking circles, leaving it susceptible to shifts in political ideology. While regulatory agencies were established to provide for credible commitment, that is stability and predictability in policymaking, their authority often rested on a technocratic rationale that lacked deep societal anchoring. Populists' policy and leadership style relies by contrast on "the promotion of the interests of ordinary people against the oligarchy and the valorization of popular common sense." Two among the core features of the populist worldview are particularly relevant to understand populists' malaise with independent authorities: anti-elitism and immediacy. In such a view, institutional checks and balances, non-majoritarian, and technocratic bodies operating at arm's length from government are all impediments to popular sovereignty, embodied in an unmediated relationship between the people and the leader. All this stands in direct opposition to regulatory governance, whose legitimacy is grounded on the capacity to make impartial decisions based on accurate knowledge. Consequently, independent regulatory agencies are increasingly framed as obstacles to "unconstrained majoritarianism," where leaders claim to represent the people without institutional constraints. In this view, regulatory governance is vulnerable not simply because of shifts in political ideology but because it represents a structural contradiction with populist demands for direct political control over policy.

Indeed, despite its institutional expansion, the regulatory state has not developed the broad societal legitimacy necessary to shield it from political contestation. While the regulatory state was framed as an efficient and credible governance model, it remained largely technocratic in nature, relying on expertise, economic rationality, and insulated decision-making processes rather than broad democratic participation. This created a legitimacy gap, making IRAs susceptible to populist contestation that they serve elite interests rather than the broader public good. Unlike courts or central banks, which have cultivated strong reputational legitimacy over time, many IRAs lack a visible constituency that actively defends their autonomy. Without a large social and political base to reinforce their role, IRAs are more vulnerable to populist attacks that depict them as unaccountable and disconnected from the democratic process. With the absence of a broad coalition to isolate the regulatory state from the ever-expanding populist clout, populists find it easier to politicize regulatory governance and dismantle, repurpose, or undermine IRAs. In this sense, the crisis of regulatory governance is not merely one of institutional fragility but also one of democratic legitimacy, leaving IRAs increasingly exposed to political capture and executive interference.

The next section provides a brief historical overview of the factors that led to the diffusion of the model of the regulatory state. We then show the distinctiveness of the challenges that populism poses to independent regulatory authorities, by examining to what extent the regulatory state can survive the ascendancy of populism, and how populist attacks adjust to the particularities of the regulatory governance model. We then outline a research agenda to study the question of the populist challenge to regulatory governance from five key angles. These angles are: One. Populist strategies for controlling regulatory agencies: Populist governments seek to weaken regulatory autonomy through de-delegation, legal restructuring, and politicized appointments, yet the extent and variation of these strategies remain underexplored; Two. the politics of regulatory design: Institutional features such as appointment rules, funding structures, and legal mandates shape agency resilience, yet populists frequently alter these safeguards to consolidate control; Three. market responses to regulatory instability: Business actors may either defend regulatory autonomy to ensure stable market conditions or exploit populist-led deregulation for agency capture to ensure political or economic gain; Four. transgovernmental networks and international constraints: IRAs embedded in global or regional regulatory frameworks may leverage international support to maintain independence, although populist governments often attempt to sever these ties; and Five. regulatory agency responses and adaptation: Unlike ministerial bureaucracies, IRAs rely on de facto autonomy-using reputational legitimacy, coalition-building, and transnational ties-to resist political interference, but the effectiveness of these strategies requires further investigation. These angles provide a framework to assess whether regulatory governance can endure the populist challenge. In this contribution