Exploring how interest groups affect regulation and innovation based on the two-level games: The case of regulatory sandboxes in Korea

Abstract

The rapid development of science and technology creates sharp conflicts between interest groups and govern-ment delays in regulation. This study explores how interest groups affect government delays in regulation, considering the influence of interest groups as a fundamental cause of conflicts related to new technology development. As an analytical frame, we adopted Robert Putnam (1988)'s two-level game model, which analyzes negotiations between countries in international politics. Using the Korean regulatory sandbox as a case study, we explored how interest groups affect government delays in regulation. The regulatory sandbox is designed to preemptively test new technology that existing laws and systems did not expect in the real market and improve regulatory measures based on the results. This research placed emphasis on shedding light on the mechanism of how interest groups influence inter-ministerial regulatory policy negotiations within governments, an area previously unexplored. Through this, the characteristics of inter-ministerial new technology in negotiations have been conceptualized into ten new propositions. Using these propositions, it was confirmed that negotiation outcomes were dictated by four typologies: 'mutual cooperation', 'active acceptance for new technology', 'passive acceptance for new technology', and 'adversarial opposition type'.