Fuzzy Legality and National Styles of Regulation: Government Intervention in the Israel Downstream Oil Market

Abstract

This article examines the role of statute law in regulation and government intervention through a detailed historical case study of a crucial retail market. The history of state intervention in the Israeli oil supply market is dominated by “fuzzy legality,” a concept expounded in a former article. Legal fuzziness allowed the industry, acting in concert with the government regulator, to retain a lucrative, practically non–accountable arrangement in changing politico–economic climates. Three central forces encouraged continuing fuzziness: a “cloud” of state security, institutional stickiness that preserved colonial mandatory legal structures, and a prevalent national culture of nonlegalism. The article ends with a careful suggestion regarding the Israeli national style of regulation. Compared to American “adversarial legalism,” and its opposite, “consensual nonlegalism” the Israeli style may be termed “adversarial nonlegalism,” and holds less promise for balancing market and public interests.

Fuzzy Legality in Regulation: The Legislative Mandate Revisited

“…In the absence of explicit authorization to regulate, legitimacy may first and foremost be promoted on the constitutional level. The executive branch may base regulatory action on implied powers flowing from its inherent role as executive (Cohn forthcoming 2002a). Other lateral sources are generally available.…”