Final Report (all chapters)

population of firms, clinics, laboratories, and universities is scattered over a very large territory,
making it difficult for any administrative agency to implement a credible and effective system of
compliance assurance.
Regulatory agencies facing a challenge of this magnitude routinely delegate some
monitoring and enforcement authority to third parties, such as trade and professional
organizations. Obvious candidates for surveying ART programs are the American Society for
Reproductive Medicine and the Society for Assisted Reproductive Technologies. The
Biotechnology Industry Organization could monitor the biotech sector, and leading scientific
societies such as the American Association for the Advancement of Science and the Federation
of American Societies for Experimental Biology could audit academic laboratories.
Delegating monitoring and enforcement authority to third parties – referred to as
intermediary organizations in the remainder of this section – has a crucial limitation: Trade and
professional associations would have a very limited authority to ensure compliance; members
could easily avoid compliance by simply leaving the association, while non-members would be
exempt from oversight in the first place. This is not, however, an insurmountable problem. While
limited, an intermediary organization’s authority is not negligible; it varies depending on the
nature of the benefits it provides to its members. 31
Intermediary organizations providing
valuable, exclusive benefits to their members make it more difficult for a member to leave. The
more valuable the exclusive benefits, the more difficult it is for a member to leave, and the more
powerful an intermediary organization becomes. 32
Regulators could bolster these embryonic systems of private governance either by making
membership in intermediary organizations more attractive or by increasing the cost of leaving an
intermediary group. For example, regulators could decide that the members of an intermediary
organization would be inspected less frequently, and that the inspection process should be
collaborative and should emphasize the correction of violations and the adoption of best
practices over punishment, fines, and prosecution. The agency could also determine that serious
violations by a member of an intermediary organization should be treated more leniently. By
contrast, non-members would be inspected more frequently, their inspection process would be
antagonistic, and violations would trigger severe penalties. Importantly, members of an
intermediary organization would be inspected by their peers or by representatives of their
intermediary organization, while non-members would be inspected by the regulators.
In this architecture of compliance, the regulator’s main role shifts from compliance
assurance to ensuring the integrity of a decentralized system of monitoring and inspection, i.e., to
monitoring the monitors. Assuring the credibility and integrity of this system entails addressing
several concerns. Chief among them are ensuring consistency of inspection and preventing
31
32
Typically, national trade associations advocate vigorously for their members, to avoid or mitigate regulations or
to obtain specific benefits. They also offer a wide range of training and educational opportunities.
Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, MA:
Harvard University Press, 1965); Posner, "The Regulation of Groups: The Influence of Legal and Nonlegal
Sanctions on Collective Action."
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