Regulation through stakeholder cooperation – a viable alternative to political overregulation?

As societies grow more complex, the natural response often seems to be more laws and tighter regulation. But is political regulation always the best solution or can stakeholder-driven self-regulation sometimes offer a more effective and sustainable path forward? This was the central question at a recent seminar hosted by the Karl-Adam Bonnier Foundation, where decision-makers, researchers, and experts came together to discuss the issue. The evening underscored that Sweden has several strong track records of successful stakeholder-driven regulation.

Laws and regulations are essential for a functioning society, yet when they become too numerous, the cost of maintaining and enforcing them can outweigh the benefits. An excess of regulations can also lead to contradictions and ambiguity, hindering renewal, innovation, and growth. Against this backdrop, the seminar highlighted a number of compelling examples where self-regulation has proven both efficient and legitimate. Moderating the discussion was Rikard Westerberg, economic historian at the Stockholm School of Economics.

Lessons from the stock market, labor market, and media sector

Keynote speakers included Erik Lidman, Professor of Corporate Law at Stockholm and Gothenburg Universities and Co-Director of the Swedish Corporate Governance Institute; Fredrik Söderqvist, economist at LO; and Ola Sigvardsson, journalist and former Press Ombudsman.

Together, they demonstrated how self-regulation has fostered both efficiency and trust across sectors. Sweden’s stock market was highlighted as an internationally recognized success story, where robust self-regulation has driven strong capital growth, dynamic rule-making, and high-quality standards, all without burdening the state with excessive administrative costs.

The labor market’s collective bargaining model offered another strong case. Built on trust, compromise, and shared goals, it has provided stability and kept conflicts at a low level for nearly a century. In the media sector, self-regulation has played a key role in raising ethical standards. While the Swedish press of the 19th century was often ruthless, today it is widely respected internationally. The system of press ethics and the Media Ombudsman has helped uphold high standards, even as digitalization presents new challenges. Across all three sectors, adaptability and relatively few court disputes stand out as common features.

What Makes Self-Regulation Work?

Roundtable discussions during the seminar identified several key conditions for successful stakeholder-driven regulation:

• A shared interest or external pressure: Cooperation often arises when stakeholders want to avoid state intervention or face a common threat.
• Strong and legitimate actors: Leadership and trust are essential for building consensus.
• Trust and culture: A history of cooperation and broad participation improve the chances of acceptance.
• Addressing free riders: Systems risk collapse if powerful actors opt out but still benefit from the rules.
• Time and continuity: Effective self-regulation often develops over decades, making it harder to establish in fast-moving areas such as AI or the gig economy.

The seminar concluded that stakeholder-driven regulation is both relevant and complex. It works best in emerging fields and in areas where actors share strong incentives to cooperate, but is harder to establish in highly politicized debates or where rigid regulations already dominate.

Taken together, the examples from the stock market, labor market, and media sector highlight a shared insight: under the right conditions, self-regulation can become a powerful and cost-efficient tool, fostering not only efficiency and legitimacy, but also societal progress.